Today, Blockchain Has A Problem
The main characteristic that defines today’s professional blockchain consulting services is that they are nowhere to be found. This is a problem.
Disruptive innovation doesn’t just happen at random. Industry incumbents perpetually face the risk of displacement by new entrants using new technologies and new approaches. These disruptive approaches follow patterns. Enter blockchain.
Phase 1: Denial (2009–2017)
“That virtual keyboard will be about as useful for tapping out emails and text messages as a rotary phone”
TechCrunch’s Seth Porges wrote in a piece titled “We Predict the iPhone Will Bomb.”
Incumbent’s reactions to potential technology disruptions are practically cliche. New technologies are inferior, even unsafe. There was never a need for it and the world will keep turning without this new technology. Not broken? Don’t fix it. History has not been kind to such advocates.
Newsweek wrote in 1995 on the internet:
“Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems. And the freedom of digital networks will make government more democratic. Baloney.”
Blockchain’s potential has shimmered for the better part of a decade, brushed off by executives reading catchy headlines. Blockchain technology could be described as the technical counterpart for the English language. Through dialogue (governance) an intention (block) is communicated, which is understood and acknowledged by all relevant parties (mining). Also described as an immutable decentralised ledger, blockchain technology can track the full chronology of events (for example, transactions) that take place, allowing anyone to trace or audit prior transactions.
The primary incumbent reaction during this phase is essentially denial. Corporate strategy is not a democratic process and advocates of new technology are often overshadowed by shareholder demands and 5-year strategy restrictions. From the internet to the iPhone, this cycle has been repeated numerous times. Recently blockchain was added to this list.
Phase 2: Validation (2017–2019)
At the end of 2017 the cryptocurrency market was valued at $600 billion. Over $1 billion has been invested in blockchain-based startups. As usual, once market traction becomes too hard to ignore the incumbent begins to mount a response. That response tends to sit somewhere between dismissive and negative, and focuses on comparing the products by using the existing criteria established by the incumbent. In other words, incumbents use historic criteria to validate if a disruption will be mainstream 5 to 10 years in the future.
Is blockchain relevant for me? How will trends affect my sector, and what is my place in this new ecosystem? How to navigate decentralised technologies? This approach is understandable because blockchain is an extremely fast-moving space setting the course in such an environment is challenging. Both executives and policymakers alike receive the mandate to do something with blockchain. But what is it exactly? It is complicated. It is scary.
Phase 3: Competition (2019–2020)
The next battleground is to go after the incumbent customers who have not yet made the move to blockchain. The sector is young, and battling its early user experience challenges. However, once the low-hanging fruit is picked, the attention will shift to the broad base of customers which make up the mainstream market.
As a startup founder, you look critically at your own product trying to identify the missing pieces. Maybe your competitor had features that may not be such bad ideas after all. Maybe those companies you disrupted knew something and had insights that you could benefit from.
Currently, there is too little knowledge sharing being done between governments (on policy level), corporates (on service design level), and startups (on technology level). The fact that this is way it has always been done, doesn’t mean this is the way it should be done. Deeper collaboration could be a win-win for all stakeholders. The best-known initiative in this space is the Ethereum Alliance, featuring various Fortune 500 companies such as Microsoft, Accenture, and MasterCard.
Phase 4: Complete Reimagination (2020–2022)
Reimagining a technology or product is about looking at the underlying assumptions and essentially rethinking all of them at once. What is money? How to create and transfer value? Can you take ownership of your identity? What is trust in a digital world? Combining old and new into a completely different solution often creates whole new categories of products and services.
Blockchain is part of a larger puzzle. Future decentralised data infrastructure will come from the convergence of the Internet of Things (data production), blockchains (data distribution), and artificial intelligence (data consumption). The integration of these technologies will see markets become increasingly open-source, distributed, decentralised, automated, and tokenised.
Why Blockchain Consultancy is Needed, Now
You cannot govern what you don’t understand. For any innovation to thrive, predictable, informed policies are needed. The blockchain space is currently surrounded by uncertainty. This does not only discourage blockchain startups launching new projects, but also unnerves multinationals who are keen to try their hand at a pilot. Policy makers need support to develop a robust understanding of both technology and market. In developing that market understanding, constructive dialogue is needed between those developing the technology (startups, corporates) and those setting the context for success (policy makers).
Companies face a similar dilemma: You cannot lead market-wide blockchain initiatives if management believes blockchain equates to Bitcoin. Disruption can threaten market leadership but also spark new growth opportunities for companies that anticipate the patterns that may affect their markets. The business team needs to develop a keen understanding of the dynamics of competitive offerings, and know when a new model can offer more to customers and partners in a different way. More importantly, it must avoid excessive attachment to today’s measures of success.
The time that one person understood everything that was going on in the blockchain world across all technologies and all sectors, is long gone. Blockchain is hard. Blockchain moves fast. Consultancy services are needed. To support policy makers and C-level executives navigating this exciting technology, so startups and the extended ecosystem can co-create the next wave of innovation. To further blockchain understanding for it to benefit the largest possible group of stakeholders. To future-proof new economic and political models.
Similar to the internet before, blockchain developments will have major implications on most sectors, building on innovations in trust, payments and digital identity. Unless we change the conversation, the technology won’t live up to its potential. So let’s change it today.
MintBit provides blockchain advisory services to help companies and policy makers navigate decentralised technologies.
Blockchain is an extremely fast-moving space, and setting the course in such an environment is a non-trivial task. MintBit helps you understand, prioritise, and execute on the strategic potential of blockchain. Develop a robust understanding of both technology and market to identify opportunities that work for you. Your blockchain strategy starts here.
Learn more at www.mintbit.io