Traditional institutions are facing immense pressure from the new technology of blockchain and most institutions aren't even really aware of the threat that looms. In order to fully comprehend how blockchain could be the final nail in the coffin for these businesses, we need to start from where it all began - the introduction of the personal computer.
Personal Computer
In the early 1980's the personal computer was made affordable and usable to the middle class in America. It no longer was a tool exclusively for the military and big institutions who could afford to pay thousands for such a device. Until the 1970's, the computer was a complicated piece of technology that was difficult just to set up and users had to create their own programs in order for it to be functional.
Fast-forward to 30 years later and everyone now can own this technology for a couple of dollars. A phone that fits into our pockets today is more powerful than the first personal computers which were 100 times bigger in size. Much progress has been made in a shorter period of time in the technology sphere and that timeline keeps shrinking as time moves on. It took nearly a 100 years after the introduction of telephones to the public.
Internet
The computer brought rise to an even more powerful tool, the internet. During the very early stages of computers, a system that could allow for communication between different computers was being researched by the federal government of the US. Such a network was realized with ARPANET (Advanced Research Projects Agency Network) in the 80's and would be tested out by military and academic institutions before a mass rollout to the vast world.
The resulting global network was a result of worldwide collaboration to merge many networks into a single system of interconnected networks (internet). And just 10 years after the introduction of personal computers to the household, the internet became adopted to the public in the 90's.
Since the 90's the internet has greatly impacted the direction of the future for the majority of the world and the computer remains the backbone of that. The internet has revolutionized culture and commerce as it makes things instant. It introduced many great protocols such as online shopping, e-learning, e-mail and instant messaging etc.
All these protocols were developed within 20 years of the internet's introduction to the world. Amazon in 1994, Google in 1998, Facebook in 2004 and Uber in 2009. Many industries have been disrupted by the internet both directly and indirectly. As the internet continues to grow alongside computing power, more innovations are coming to light quicker than ever before in history. One such innovation is distributed ledger technology otherwise commonly known as blockchain technology.
Blockchain Technology
While the world's attention was focused on the US recession in 2008, a man by the name of Satoshi Nakamoto was behind the scenes busy working on a new money for the world. He was inventing a digital currency called Bitcoin which would solve the double spend problem without the need for a centralized confirmation. The double spend trouble had been an elusive task until then.
The telephone disrupted the mail service business. The computer disrupted the calculator & typewriter industry, replaced invoice managers in many businesses and continues to disrupt by hosting new innovations. One such innovation is the internet which continues to disrupt publishing companies, television, commerce businesses just to name a couple.
The blockchain (Bitcoin) is the first technology to threaten the entire power structure as we know it. Governments, Banks, Hedge Funds, Financial Services and middlemen in the majority of industries. All these institutions that were previously labeled as 'too big to fail' are threatened by Bitcoin.
Indeed Bitcoin is bigger and more powerful than these institutions and it's even harder for it to fail because of it's distributed nature across the world. Too big to fail institutions and systems are scrambling to adapt. Whilst other institutions are denying the inevitable, that their industries are about to become obsolete.
Conclusion
Watching how all this unfolds in the coming years is worth some popcorn and a slushy as this is turning out to be a battle between the 'good guys and bad guys, villains, and heroes'. Watch out for my next post where I'll go more in-depth on blockchain and its effect on traditional institutions.
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