Don’t Panic About Blockchain
(But Do Pay Attention)
SEISMIC SHIFT, DISTANT COMET, OR NEITHER?
Blockchain technology. It’s a phrase we’ve been hearing with growing frequency over the last few years, with varying degrees of interest or involvement from different organizations. Though financial services, technology, and supply chain management are some of the industries for whom blockchain is most immediately relevant, it’s safe to say that the eventual adoption of this innovation will have significant ramifications for the way most modern businesses operate.
Much of the discussion around blockchain speaks of its potential to “disrupt,” leading one to wonder – not without justification – how far away this disruption might be. Is this an earthquake predicted to happen any day now, or a meteor sighted in the outer reaches of the galaxy, making its way toward Earth?
DISRUPTION PROMISED. DISRUPTION DELIVERED.
The answer might be somewhere in the middle. Mass adoption of the technology is not so imminent that businesses not using it will be left behind tomorrow; nevertheless, the implications of widespread use of blockchain are too significant to be dismissed out of hand. It holds the potential to under-gird the next generation of applications our current digital revolution has enabled. In short, blockchain is likely here to stay, and the longer it hangs around, the more relevant the topic becomes.
Thus, even if there’s still some runway before businesses need to have a fully-formed strategy for blockchain implementation, now is the time to sit up and start observing what’s happening.
Even then, it can prove difficult to separate hype from reality. Blockchain is certainly experiencing a moment of tremendous attention, even if not everyone fully understands why they’re excited about it. This is owing partially to the recent fervor around Bitcoin, the most notable current application of blockchain technology. There is potential to unintentionally conflate the two terms, an inaccuracy on par with conflating a web browser with “the Internet.” Blockchain enables Bitcoin. Bitcoin is not blockchain. Incidentally, some of the same people who have made notable and public denouncements of Bitcoin are proponents of the underlying blockchain technology, which reinforces the need to keep the two conversations separate. Still, even if an organization seeks to participate in this developing conversation, they face the simple challenge of knowing where to begin.
OF CANNABIS, CIVIL RIGHTS, AND BLOCKCHAIN
If there’s a timeline that will eventually mark the progress of blockchain from idea to full-scale adoption, how could we envision our current position on the trajectory? Substantial technical hurdles must yet be overcome to facilitate blockchain mass adoption. Progress is being made in these areas, but the varying successes of technical efforts is an unreliable predictor for the advancement of blockchain as a whole. However, we may gain a better idea for blockchain’s progress toward adoption if we examine it from the perspective of social dynamics.
Transformative social changes, particularly of the kind with far-reaching effects into the future, typically follow a progression of six steps. These are the basic markers of a movement’s advancement from fringe or grassroots concern to a component of a new reality endorsed and accepted by the markets and the state. Whether the rise of a new religion, a political movement, or simply the disbursement of an idea, transformative social changes share these things in common.
EVOLUTIONARY PHASES OF TRANSFORMATIVE CHANGES
A movement begins with the emergence of a “prophet.” Whether a sole individual or several around the same time, they are the forerunners or notable first proponents of an idea.
The work begun by the “prophet” observes growth in early adopters or “disciples.” The movement is still mostly a fringe interest at best, with skepticism still likely the disposition of a rational majority.
By the third stage, a movement has gained its “clergy.” This is a more substantial following taking shape as an organized body of thought and effort, with an increase in interest and involvement from previously unaffiliated groups or persons.
Stages 4 and 5 are effectively iterations of the same process, which is the point where political bodies begin to recognize or take notice of the growing effort. Stage 4 is the initial introduction of an idea to state-level thinking, typically characterized by some early legislation. This could go against the pattern of enablement, but other cases demonstrate a straight-line acceleration of government adoption going from early legislation designed to test the waters to outright adoption within existing infrastructure.
This is typically followed by the fifth stage, government sponsorship. This is the point where a government, perhaps at the level of a single state, fully embraces a movement.
A transformative change reaches the peak of its evolution in the sixth stage, where widespread community, government, and even global acceptance of its tenets is observed.
This model can be seen functioning in several different historical contexts. For instance, in the landscape of US historical changes, the Civil Rights Movement and the push to legalize recreational cannabis don’t have many aspects in common, but this framework would reveal a similar process for them both to go from an unacknowledged position to changing reality as we know it.
And now we can’t go back to a world where someone hasn’t made this connection.
What would this look like if overlaid onto blockchain’s current rise into public consciousness? Satoshi could be considered the “prophet” who started it all, followed by the “discipleship” of Bitcoin miners. Corporate advocates and startups are the beginnings of an organizational body that will continue to expand. We obviously have not seen full-scale adoption yet, which means stage 6 has not yet been reached for blockchain, but some early legislating activity in Delaware and other key states means we could see ourselves roughly in between stages 4 and 5.
Blockchain is not yet a) understood well enough or b) at a technical juncture where promoting or even mandating mass adoption makes sense. As incremental improvements are made in the technical realm, these will play a role in “greasing the wheels” of widespread adoption. Just as hard drives once took up entire rooms, the advancements that made them smaller encouraged more widespread use.
Additional gating factors include disruptions or problems for which blockchain is a clear or favorable remedy, and strong sponsors that will aid, either through legislation or “evangelization,” the understanding and use of the technology. But understanding this evolving technology from both a social perspective and a technological one broadens our awareness of key advancements to note as they begin to occur.
WHERE CAN WE BOARD THE MAYFLOWER?
Blockchain is still a promising and relevant conversation, even if we are still several years away from its more widespread understanding and use. Even so, we have reached a point where it seems wise to seek out opportunities to start getting involved. We don’t need to captain the Mayflower ourselves, but is there at least somewhere we can sign on to board the ship?
POLL: Piracy Still a Problem After Nearly 400 Years.
Organizations in the financial services sector looking to assume a position in this conversation can consider a few key strategic questions:
1. Do you have a designated person or group within your organization leading your knowledge and participation in the blockchain discussion?
Active participation in blockchain developments will be of most value if it’s receiving the full energy and attention of a well-positioned, well-informed individual. Installing an individual leader, likely a VP-level technologist or someone similar, to own responsibility for your organization’s blockchain initiatives, can better position you for internal projects or external engagement on blockchain-related activities.
2. Are there relevant pilot projects within your industry that you can spearhead or join?
A pilot project is a limited-scale, real-world implementation of any technology or concept to improve working knowledge and explore innovative potential, typically with intent to develop a tangible solution. Developing or joining a blockchain pilot project could either reveal a solution for an existing problem area in your organization or industry, or light the way to a new direction into which your organization can grow.
3. Have you attended conferences where prominent voices are speaking on the technology and its applications?
You can spend all the time you like reading about a movement or idea on the Internet, but if it has any momentum at all, there’s probably a conference for it somewhere, and if you’re really serious about getting involved you’ll want to attend one. Blockchain Expo Global, Blockchain Summit, and World Blockchain Forum are three prominent examples, but others either already exist or may yet form. Whether attending as a general participant or as a speaker, conference attendance can offer both internal awareness of developing trends and possibilities with the technology, and the external benefit of public visibility for your involvement, communicating your interest in being a future-oriented organization.
There is a level of uncertainty with all these considerations that shouldn’t be ignored. The likelihood of developments not-yet-public could cast a different light on this entire article. Conversely, any degree of investment in a developing but promising technology carries a degree of risk. Waiting to act until everything is fully known is a safer path, to be sure, but by then the realm of speculation will have long become reality. The leaders of that reality will be the ones who took the little information available and plowed headlong into the future.
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