✍Aenco Academy✍#6: Is Blockchain a Disruptive Technology?
It is believed that the driving force of manufacturing new technologies is to solve mankind’s problems. Blockchain is said to be a ‘disruptive technology’ since it sparkled heated discussion in major social pillars like government, business, education, healthcare, transportation, rapport management, and many more categories of sectors concerning our societ(ies) — it shakens profoundly the very constitution of civilized frameworks, hence ‘disrupting’ traditional mode of solving all social problems.
Join us this week at Aenco Academy on “Is Blockchain a Disruptive Technology?”
✒‘DISRUPTIVE’ TECHNOLOGY？
A myriad of news, journals, online forums, and media coverages are saying that blockchain is a ‘Disruptive Technology’ — but recently, more and more blockchain researchers are saying that it is not the case. Although the concept of ‘disruptive technology’ could be contested given its youthful existence in our contemporary era, it could help our analysis of what is disruptive technology by learning the mainstream definition of the term: invented by Clayton M. Christensen, an American Professor, the term was coined just twenty years ago in his publication “Disruptive technologies: Catching the Wave”,
“The technological changes that damage established companies are usually not radically new or difficult from a technological point of view. They do, however, have two important characteristics: First, they typically present a different package of performance attributes — ones that, at least at the outset, are not valued by existing customers. Second, the performance attributes that existing customers do value improve at such a rapid rate that the new technology can later invade those established markets.” (1995, Clayton M. Christensen)
✒THEORIZING+CONCEPTUALIZING OF BLOCKCHAIN
Blockchain, more accurately, the conceptualization of blockchain was invented by someone named Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency Bitcoin. We mentioned how Bitcoin achieve decentralization in Aenco Academy #2 and the brief concept of cryptography in Aenco Academy #4, but we did not mention that back in 1991, there were already some scholars theorizing about a cryptographically secured chain of blocks, and Bitcoin is the first digital currency using blockchain technology and solving the double-spending issue without the need of a centralized authority.
✒ DOES THAT MEAN BLOCKCHAIN IS DISRUPTIVE?
Today, especially after the introduction of Bitcoin, many believed that blockchain technology will transform, or ‘disrupt’/ ‘invade’ government and social constructs — though in time, which is arguably long and uncertain. Some, like Lansisti and Lakhani in their article titled “The Truth of Blockchain Technology”(2017), thinks that blockchain is not an actual ‘disruptive’ technology since they fail to display an immediate “attack [to the] traditional business model with a lower-cost solution and overtake incumbent firms quickly.”
“Blockchain is a fundamental technology: It has the potential to create new foundations for our economic and social systems. But while the imapct will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure.”
In another article “Is DisruptiveBlockchain Technology the Future of Financial Services” by Lawrene J. Trautman, published in 2016, he noted, “To date, the blockchain applications receiving the most regulatory attention are bitcoin and other virtual currencies” but when deciding on whether blockchain is in actuality disruptive, he also made a reservative proposal, “Information technology, in any of its many forms and uses, remains both: the key to productivity gains and economic growth: and a challenge to individual privacy and politically stable society”
✒ INDUSTRY-SPECIFIC DISRUPTION?
And to some, blockchain is indeed disruptive, but the extent is more industry-specific. As acknowledged by Nofer, Gomber, Hinz, and Schiereck (2017) in “Blockchain”, blockchain technology did attract “massive attention and trigger multiple projects in different industries.”
“However, the financial industry is seen as a primary user of the blockchain concept. This is not only due to the fact that most well-known application of this technology is the cryptocrrency Bitcoin, but it is also driven by substantial process inefficiencies and a massive cost base issue specifically in this industry.”
✒ ESSENTIALLY CONTESTED ISSUE
In this article, rather than giving out a once-and-for-all answer to the proposed question, we presented a few scholarly viewpoints as to whether or not blockchain is seen as a disruptive technology. Indeed there is a growing trend that giant corporates like Walmart, Facebook, Nestle, Lamborghini are incorporating the technology in their business models. Aenco believes that blockchain could enhance the betterment of human lives and it has the potential of transgressing variegated social constructs.
Only time can tell to what extent does Blockchain ‘disrupt’ us.
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