History’s Cycle of Innovation: How the Evolution of Electricity Mirrors the Rise of Blockchain
Throughout history, technological advancements are intertwined with the evolution of human thought. Visionaries consistently push beyond conventional thinking, and their innovations provide solutions to the challenges of their time. However, these critical inventions are met with resistance and denunciation due to fear of the unknown. This pattern is present in the pioneers building the foundation of the crypto economy’s egalitarian revolution.
Although cryptocurrencies and blockchain technology empower internet consumers, significant barriers exist to widespread adoption. Many people are hesitant to embrace life-altering technologies due to a fear of the unknown, and the complexity of blockchain can make it difficult for people to understand its benefits.
As with past life-changing innovations like trains, telephones, air travel, and electricity, the mass adoption of cryptocurrencies and blockchain technology will require overcoming fears and doubts surrounding the unknown. History proves that such inventions faced initial resistance but eventually became part of everyday life due to the perseverance of the pioneers building them. By studying the individuals and events that shaped the adoption of electricity, we can draw parallels to the current movement toward the mass adoption of crypto and the transformative impact it will have on our society.
The Builders
The most significant innovations that have changed the course of history are born from the minds of those who can envision a future beyond the present limitations. The invention of electricity by scientists who looked beyond the boundaries of fire for light, heat, and energy is a testament to this fact.
Thomas Edison and Nikola Tesla are renowned figures in electrical engineering, thanks to their groundbreaking contributions towards establishing the electric grid. While both these inventors played a vital role in laying down the framework for our current-day electrical systems, their approaches differed significantly. Edison’s direct current power (DC) systems were initially popular but eventually fell out of favor due to their restricted range, leading to a shift towards more efficient alternatives. Conversely, Tesla’s revolutionary alternating current (AC) systems proved far more practical and efficient, paving the way for modern electricity generation methods that we rely on today.
In the same way, the birth of blockchain technology results from the visionary minds of innovators who strive to create a financial system and internet economy that offers transparency, security, and decentralization. These life-altering technologies are a testament to the power of imagination and the endless opportunities that await those who dare to think beyond the limitations of traditional monetary policy and the internet.
The trailblazers of blockchain, such as Ethereum’s Vitalik Buterin, PolkaDot’s Gavin Wood, and the anonymous creator(s) of Bitcoin, Satoshi Nakamoto, are creating the infrastructure for a decentralized digital economy. Their contributions have led to decentralized networks that offer numerous benefits over traditional centralized systems. These transformative advancements will improve the financial system and the internet, empowering everyday people to participate in a new, more inclusive economy. As the world becomes more digital by the day, people like Buterin, Wood, and Nakomoto are changing the course of history, much like Edison and Tesla did with electricity.
In the past and present, it’s clear that innovators significantly impact shaping the world around us. Nevertheless, the path to innovation is never smooth, and those who dare to think differently often face opposition from those who cling to the status quo.
The Resistance
Despite their benefits, new technologies always face skepticism and resistance from the public. In the late 1800s, the thought of using electricity to power cities and homes faced intense criticism and doubt. Similarly, the introduction of blockchain technology has faced similar resistance. The decentralization of power threatens to uproot the internet and financial system that many have grown comfortable with. This resistance threatens to stall the adoption and evolution of new technologies.
Electricity was a novel technology in its early days and met intense skepticism and pushback from the public. People were concerned about the safety and reliability of early electrical systems, and there were fears of electrical fires and shocks. This skepticism was further amplified by sensationalist news coverage and misinformation.
Some of the wealthiest, most influential people and corporations in the late 19th century opposed electricity, including the oil and gas lighting industry, which saw it as a direct threat to their business. Those who controlled the oil industry were heavily invested in producing and distributing kerosene, a fuel commonly used for lighting at the time. The idea of electric lighting threatened to uproot their entire industry, and they fought hard to resist the change. Critics went so far as publicly electrocuting animals with electricity to prove the new technology’s danger.
In addition to the oil industry’s opposition, there were concerns about the potential health effects of exposure to electric fields and electromagnetic radiation. Doctors and public health officials were among those who voiced concerns about the impact of these fields on the human body, which sparked debates about the safety of electric power and the need for regulations to ensure responsible usage.
In the same vein, blockchain technology faces significant resistance from various industries due to its decentralization of power. Sectors that have long relied on centralized intermediaries, such as financial institutions and internet companies, view blockchain as a potential threat to their business models. Such resistance has led to strong opposition and, in some cases, lobbying efforts to stall its progress.
Just as electricity met battles with the oil industry, blockchain technology and cryptocurrencies face significant resistance from the financial sector. Jamie Dimon, CEO of JP Morgan, is one of the most prominent figures in the financial industry who has publicly criticized cryptocurrencies as being fraudulent. Dimon’s comments significantly impact public opinion and influence many in the traditional finance industry to avoid crypto-assets. Cryptocurrencies allow direct peer-to-peer transactions, threatening intermediaries like banks and disrupting the conventional banking system.
Governments have also attempted to stall blockchain innovation. In the United States, Senator Elizabeth Warren has publicly called for an “anti-crypto army” to combat decentralized networks and digital currencies. Many in Congress see blockchain threatening their ability to control the money supply. Cryptocurrencies are decentralized and borderless, which means they operate independently of central authorities. This innovation makes it difficult for governments to control and regulate the flow of money, which is a primary concern for those in power.
The financial system is the most significant component of our world’s governance structures. Crypto is redesigning the financial system and in effect, is disturbing the world’s governance structures. Therefore, it’s worth noting that government officials’ opposition to crypto stems from their desire to protect the interests of the traditional financial industry. This reluctance may suggest that these officials are not genuinely concerned about consumer welfare but fear losing control over the money supply.
The parallels between the early days of electricity and the current state of blockchain/crypto are uncanny. Although once criticized and dismissed as a passing fad, electricity is now essential to modern society. Similarly, blockchain is poised to overcome resistance because it’s revolutionizing various industries.
Funding from passionate enthusiasts who saw the potential of electricity drove innovation forward. Similar investors who support blockchain and crypto projects today provide resources to ensure they will continue evolving and overcoming challenges. The similarities between electricity and crypto illustrate the power of funding to propel innovation forward.
The Investors
Innovation and technological advancements have always attracted the attention of forward-thinking investors. These people know the road to success will be paved with obstacles and setbacks, but they remain committed to the long-term goal because they recognize the value of the technology and believe in the people building it. Those who fund these projects provide the necessary resources for innovators to push boundaries, improve outdated systems and bring their ideas to fruition.
J.P. Morgan Sr.’s investment in Thomas Edison’s vision for DC is a testament to the power of forward-thinking investors in shaping the future. Despite facing early resistance and doubts, Morgan believed in Edison’s potential. In 1882, Morgan provided $150,000 to Edison’s electric power company to build a power station in New York City. This investment was a crucial moment in the development of the electric power industry and the history of American innovation.
Nikola Tesla’s AC technology caught the attention of Westinghouse, who saw its potential to revolutionize the industry. In 1888, Westinghouse acquired the patent rights to Tesla’s AC inventions, forging a mutually beneficial financial agreement based on royalties. This agreement allowed Tesla to continue working on his AC technology while benefiting from the resources and support of Westinghouse.
Thanks to Westinghouse’s investment in Tesla’s technology, Tesla could further develop and test his AC system, creating the first-ever hydroelectric power plant at Niagara Falls in 1895. The power plant harnessed the strength of the falls to generate and distribute electricity through Tesla’s AC system. Without Westinghouse’s unwavering support, Tesla’s revolutionary AC system may have never seen the light of day.
Blockchain and cryptocurrency technology attract the attention of successful investors confident in the technology’s transformative potential. Among these investors include the investment management firm Ark Invest, led by founder and CEO Cathie Wood. Wood and her team recognize the long-term benefits of cryptocurrencies, such as their ability to revolutionize finance, healthcare, and logistics. As part of this belief, Ark Invest funds innovative blockchain-based networks like Heloum, which offers decentralized wireless infrastructure for Internet of Things (IoT) devices, and Coinbase, the first cryptocurrency exchange to go public.
Michael Saylor, the CEO of Microstrategy, is widely recognized as one of the most influential advocates of Bitcoin. Saylor’s unwavering support for the digital currency has contributed significantly to its growing popularity and mainstream adoption. His company, Microstrategy, made headlines in 2020 by investing over $1 billion in Bitcoin, demonstrating Saylor’s conviction in the cryptocurrency’s long-term potential. Despite market volatility, Saylor has remained steadfast in his investment strategy, consistently purchasing Bitcoin during dips in the market. Additionally, he dedicates time to educating other businesses on the advantages of incorporating Bitcoin as a reserve asset, advancing the widespread acceptance of blockchain.
Developing groundbreaking technologies involve brilliant minds with strong convictions about their vision. However, this can also lead to internal competition and creative tension, as each innovator believes their approach is the key to unlocking innovation. As a result, battles between these innovators arise in the pursuit of building these game-changing technologies.
The Internal Battles
In the late 1800s, the battle between Tesla and Edison was nothing short of a technological war. Edison championed DC power transmission, while Tesla advocated for AC power. Their differing views resulted in an intense rivalry known as the War of the Currents, which captured the public’s attention.
At the core of this conflict were technical differences and economic interests. Edison’s backer, JP Morgan, held a virtual monopoly on DC power transmission and stood to lose significant profits if AC power became more widely adopted. On the other hand, George Westinghouse, who funded Tesla, believed AC was the superior technology. However, he faced the challenge of breaking Edison and Morgan’s hold on the market. Westinghouse aggressively undercut Edison and Morgan’s prices, winning contracts for large-scale projects like the Niagara Falls power plant, which helped to establish the superiority of AC power.
Similar to the disagreements over the best method for transmitting electrical power, internal conflicts in blockchain are not uncommon. For example, the battle between Ethereum and Ethereum Classic in 2016 centered around a security breach that exposed a flaw in the Ethereum network. The breach in the Ethereum code sparked a heated debate between two camps with differing opinions on responding to the crisis.
One group led by Vitalik Buterin wanted to reverse the Ethereum blockchain to a previous point before the hack occurred to recover the lost funds. The other group argued that reversing the blockchain would go against the principles of blockchain technology, which is designed to be immutable and tamper-proof. The dispute resulted in a hard fork, with Ethereum Classic remaining true to the original blockchain and Ethereum moving forward with the reverse.
When creating new technologies, the process can quickly become a battleground of emotional conflicts. In the War of the Currents, Edison and Tesla’s rivalry was not merely a technical dispute but a personal, bitter struggle for dominance. Each man took great lengths to discredit the other and prove their superiority through any means necessary, resulting in slander campaigns and public demonstrations showcasing the supposed dangers of each other’s technology.
The Ethereum vs. Ethereum Classic battle stems from two major technical and ideological disagreements on handling the network hack. To this day, supporters of Ethereum Classic accuse Ethereum supporters of being complicit in a centralizing force. In contrast, Ethereum supporters claim Ethereum Classic supporters are ideologically rigid and unable to adapt to new challenges.
While such conflicts can be disruptive and even harmful, constructive debates provide benefits to creating new technologies, allowing for multiple perspectives and ideas to consider. Through this creative tension, the best solutions emerge and often have pivotal adoption moments.
The Pivotal Moments
Innovation often hinges on pivotal moments that shift the course of history. For example, the unveiling of the iPhone at the MacWorld Conference by Steve Jobs in 2007 marked a revolutionary shift in how we use phones and the internet. Electricity had a similar moment In 1893 at Chicago World Fair.
Local officials in Chicago sought to make it the most impressive display of technology ever seen, and they chose electricity to be the event’s centerpiece. Westinghouse won the government contract for electricity, allowing Tesla to showcase his revolutionary AC system. For the first time in human history, an entire city would be powered by electricity.
Once it was time for the centerpiece event, Tesla flipped a switch, and suddenly, 200,000 light bulbs illuminated the city. This moment that captivated millions of attendees became known as the City of Light. The event dispelled the public’s fear of electricity and demonstrated its value and convenience. The City of Light also began a new era with electricity moving from a novelty to a necessity, powering our modern homes and businesses through the standard system of our power grid.
While blockchain and cryptocurrencies have seen remarkable growth and innovation, there has yet to be a “City of Light” moment. Despite the societal benefits that empower those using cryptocurrencies, many sociological fears still delay its mass adoption. It is crucial to continue building blockchains in a way that alleviates these fears, as Tesla did for electricity at the Chicago World Fair.
Similar to how developers of the 90s and early 2000s built the foundation for online applications like credit card transactions, blockchain developers are laying the groundwork for secure and convenient decentralized applications (dApps) today. As these developers continue to develop and refine their creations, dApps will soon be able to provide the same high-quality user experience that centralized applications offer.
The trend toward mainstream adoption and normalization of new technologies is common throughout history. As more people start using decentralized applications, they will eventually be known simply as “applications,” similar to how smartphones are no longer referred to as “smart” phones. The distinction between centralized and decentralized applications will disappear, and “decentralized” will become superfluous. This normalization of dApps will signify their mass adoption and success in revolutionizing our digital world.
As we reflect on the similarities between the innovation of electricity and the blockchain revolution, we can envision a future where blockchain technology has the power to change the world as we know it. The visionary pioneers in the blockchain space are working towards creating a decentralized digital economy that will empower people, offering transparency, security, and inclusivity. However, as with any life-changing innovation, the road to mass adoption is bumpy and requires perseverance to overcome societal fears and concerns.
The journey towards a decentralized digital economy powered by blockchains may seem like a long and winding road, but it’s one that’s worth traveling. We may not see a “City of Light” moment, but decentralized applications and the blockchains powering them are steadily growing in adoption. The creators in this space offer a new world of transparency, security, and inclusivity that has never been possible. With each passing day, we are one step closer to realizing this vision, and it’s up to all of us to play our part in making it happen by embracing the changes ahead.
