Transformation: From Horses to Cars. From the internet to bitcoin.
Every single time you have a new, disruptive technology or infrastructure model, in the first years of adoption we experience chaos. Why? Simply because the new entity is using old, pre-existing infrastructure.
Confusing? Let’s go back in time and give a few examples.
Remember the first car back in 1885? What an amazing invention! Everyone instantly dumped their horses and got into their new BMWs, Lambos, Mercs, didn’t they?
In fact, that’s not true. Everyone questioned this crazy, noisy, disruptive, noise polluting machine. They also predicted failure as they were so accustomed to horses.
Introduce any disruptive technology… Reaction 1: you’ll get resistance.
Everyone will look at you and call you foolish.
“You’re in pursuit of this crazy idea.”
Society will reject you. What’s wrong with you? Automobiles, electricity, the internet, bitcoin… absolutely insane!
However, with a little bit of persistence, you’ll soon be noticed. You were correct in the first place.
Ex. 1: The building blocks of horse town.
What strikes me is that a new disruptive entity must adapt to what’s already existing around it… what it’s about to replace. Think about that first car. It had to live in horse-ville. It had to ride in a city designed for horse infrastructure. No roads. No rules. Plenty and plenty of mud.
Society: you’re riding this noise polluting thing in a horse society – get out!
A few key points as to why horses were better in 1885: They had four legs. Four-‘wheel’-drive. Cars had forward-wheel drive, thus ran on two wheels. Horses could walk in mud. Horses could stay in balance. Horses didn’t die down when their gasoline ran out.
Could a noisy car prove itself in this town? The answer is no. In fact, they got stuck, they failed, they couldn’t balance on two wheels in a muddy city!
What did society say?
“Failed, fraud, bad. No way this will work.”
What happened when we started paving roads though?
Something very interesting.
Humans could use horses which could run on the wonderful, paved roads, nicely and comfortably. But, suddenly we experienced new inventions that could not exist before: bicycles, motorbikes, skateboards, scooters.
By changing the infrastructure, we opened doors to the car, the horse and new entities. Now we have crazy people doing 360s on roller blades and mothers pushing babies in these super prams and many other sorts of technologies roaming around the streets!
Now that’s a transformation! Start with what you’ve got, invert it, adapt to it, then the old technology can comfortably live in the new and adapted world using that infrastructure.
Fast forward through the inventions of natural gas, to electricity, and let’s get to another example.
Ex. 2: The human voice.
Remember the dial up connection to the internet?
If you’re a millennial, you’ll probably think I’m absolutely nuts. If you’re not, you’ll know the struggle.
Remember the dial up modem? That alien machine that connected us to the internet?
Let’s step back a minute.
A modem was used to deliver data over a telephone line. It was that muddy road that the cars were trying to ride on.
Back in the day, if I tried to show my friends a song over the home phone, it was all shuffled and nasty. This is due to narrow frequency. That telephone was designed to do one thing: deliver the human voice. If it can’t deliver a musical frequency… How the hell are you meant to connect to the internet with an even narrower frequency?
Imagine what the telephone companies were doing…? Pulling their hair out! “We designed this thing for telephone usage. What’s the internet?! What’s data?”
In Cyprus, where I’m from, if you tried to make a call, you’d get the squeakiest sound in the world firstly, and secondly, the phone line would cut off. The telephone companies thought it was unacceptable. They didn’t need this new thing. Just like the banks shut down bitcoin companies.
Fast forward, every single phone call you make anywhere in the world today is carried via the internet. We now live in a digital world. That’s a transformation; an infrastructural adaption.
Ex. 3: From banks, to bitcoin.
Today, we have bitcoin. A decentralised (not owned by one entity) platform, based on, trust that can settle transaction without a third party. Yet, it lives in horse-town. Horse town equals traditional slow bank accounts, credit cards, IBAN transfers, swift, and third party.
So, we’ve got our Finance Super Ferrari, ready to take off… in a pile of mud and horse shit. It’s going to be a bumpy ride.
Society: “Fraud. It’s not working. You need to regulate this. It’s a scam. Please slow everything down and adapt to our traditional methods of banking.” Ring any bells?
Did they realise though that what we have here is, like electricity and the internet, a promise of millions of applications that they have yet to imagine?
Now they’re resisting. In the next 5–10 years they’ll adapt. Then they’ll be running their systems on the blockchain. Then suddenly, the whole banking industry will run on one, trustworthy, irreversible, decentralised ledger, on top of bitcoin.
By slowing the process down to the traditional model, we will allow people to adapt. To learn. To feel comfortable. We will open the doors to thousands of applications. Like the car, roller blades and the push pram, which were revolutionary to horse carriages.
We will enable a future of a legacy system. Though, it will be very difficult. People will reject. People will neglect. Once the infrastructure is adapted, the old will ride the new and it will become easy.
We are part of the early stages of the future of money.
“We are going to witness one of, if not the greatest infrastructural transformation the world has ever seen. “ – A. Antonopoulos (2016).
Adapted from: A collection of talks by A. Antonopoulos (Vol. 1) ‘ The Internet of Money.