How does blockchain technology and cryptocurrency fit with received innovation theories? Is crypto even disrupting processes of innovation? And what does this technology mean for the world?
This post is Part 2 of an ongoing work on the imminent global disruption enabled and caused by blockchain technology. It is my attempt to combine my knowledge of the field of innovation (from a business, government and theoretical perspective) with my observations about the current blockchain phenomena to answer the above questions.
Here's something you probably don't know about me. I have extensive experience writing and rolling out innovation policy in a government setting. So that means I know a bit about theories of innovation and what governments and businesses think they can do to harness it for economic and technological gain.
Please refer to the introduction (linked below through the Table of Contents) for further information, and note that I am not a financial adviser, and this is not financial advice.
TABLE OF CONTENTS
Introduction
The Introduction to this work was recently published on steemit.com. See: https://steemit.com/blockchain/@drwom/immanent-global-technological-social-and-economic-disruptions-enabled-and-caused-by-blockchain-technology-introduction
Part 1. Background: The cryptocraze
Bitcoin
Altcoins
A speculative bubble?
Part 1 of this work was recently published on steemit.com. See: https://steemit.com/blockchain/@drwom/imminent-global-technological-social-and-economic-disruptions-enabled-and-caused-by-blockchain-technology-part-1-background
Part 2. What's really going on? (See below)
a. Geopolitics
b. Disrupting established business models and practices:
** Finance
** Innovation: start-ups, angel investing and venture capital
** Technology
Part 3. What does it mean? (To be posted over the coming days)
Where to from here?
How should governments respond?
How should business respond?
Please note: As this table of contents is a draft I expect it to change and expand as my ideas are developed.
PART 2 (a): WHAT'S REALLY GOING ON?
The internet is now ubiquitous in many realms of human endeavour. No one is asking what its purpose is like they were in the late 20th century. Finance. Economics. Arts. Design. Tourism. Business. Education. Within a very short time the internet has carved itself an ever-increasing part to play in society. And the internet is, for the moment, the only infrastructure blockchain technology requires.
If my conclusion to Part 1 of this series is correct, the driving force(s) behind investment in blockchain technologies (or to use the common parlance, cryptocurrency) are bigger than financial speculation, and such investment is indicative of more than a speculative bubble. Why is that? Because blockchain technology represents a quantum leap for the internet - and just as importantly, the technology is universally available and for the most part based upon open-source software.
We are in a global moment of cultural and technological transition. How long will it last? Who can say. Blockchain technology has everything it needs to itself become ubiquitous within the internet. Slowly, surely, the functionality of the internet will increase. At first we will notice, but soon, the innovations and changes facilitated by blockchain will become as accepted and expected as the basic functionality of the internet is now.
Geopolitics
It is important to stress that this technology is freely available anywhere where the internet is. It is equally important to note that open-source software has the potential to 'level the playing field' between the West and other nations and regions.
This is an enormous opportunity to improve the lives of billions of our fellow humans.
From a policy-setting perspective, any nation which disallows crypto currencies is gambling with the future in a much more comprehensive way than 'speculators' seeking profits though the trading of cryptocurrencies might be.
Such a nation would essentially be turning its back on the potential uses and innovations of blockchain. No one wants to do that. Another factor driving acceptance of blockchain technology by regulators is the simple truism of the name 'cryptocurrency'. Many blockchain technologies have the ability to go underground at a moment's notice, becoming invisible and traceless to business and regulators alike.
Taken together these are powerful reasons for regulators to regulate - not outlaw - investments in cryptocurrencies. And this in turn has important implications for their long term investment potential.
Part 2 (b): What's really going on 'Disrupting established business models and practices' will be continued in a forthcoming post.
Photo courtesy of pixabay.com and mashed by @DrWom
