Chapter 4: A METAMORPHOSIS YOU ARE NOT PREPARED FOR
The market is quickly starting to embrace the blockchain technology. Why is that? Simply because the benefits are overwhelming. A lot of money is saved when a decentralized system is embodied, and middle men are eliminated. We see safer voting procedures, solid systems for housing purchases, immutable encyclopedias and quality assured food production. So you think the centralized money machines will just sit by and watch as they lose their power? Maybe not. The empire will strike back.
Following his new book on digital strategy How To Become A Digital Marketing Hero, Rufus Lidman is now translating all his knowledge to the most revolutionary field in the world. A field in desperate need of a digital strategy. In a series of articles, we will get an upclose view of this new mind-blowing market, seen through the eyes of a digital strategist.
A Data Integrity Revolution That Makes You Richer And The World Better
Transaction costs and transaction rates have both been viewed as primary decisive factors in the financial world. At least if you look at it from a traditional analogue establishment in the western world point of view, since old currencies were the only ones in use back in the offline world. In the current online world, that may no longer be the case.
Instead, the digital block elite is raising questions about what will play the most crucial role in the new and quickly evolving online world. One proposal came from Don Tapscott, the author of “Blockchain Revolution”. In the book, he makes a case about issues such as privacy, ownership of digital data and the dominion of your digital identity. During the Facebook debacle earlier this year these matters were brought into the spotlight — and it got more evident than ever that data is “The Oil of Today”. We as individuals provide something that other digital gorillas then confiscate for purposes which may or may not be entirely victimless. Tapscott compares this market relationship with the age-old feudal system. Feudal lords owned large areas of land, which were then farmed and cultivated by peasants to create value. The value was then confiscated by the lord.
Today, we continuously create new “oil“, the data that is being captured by our digital landlords. These landlords include social media, search engines, governments, banks and so on. Tapscott, like many others in the blockchain community, strikes back at these issues, by goading us to attempt to regain this data — our “digital identity” — and handle it responsibly in favor of our own interests, rather than the interests of the gorillas.
“If you think blockchain technology wouldn’t pose an immediate threat to their entire existence, think again.”
With the blockchain, people along with physical and digital objects, can have unique, immutable identities in a “digital black box”. This box, while protecting our privacy, will capture data that we need, so we can profit from it and plan our lives with it.
Or we can choose to not only use it to benefit ourselves, but to benefit the world at large.
A Revolution That Makes The Gorillas Poorer And Their Future Hazy
As soon as we start talking about regaining your digital data, we’ll come across an area that has sparked a lot of debate. We are talking about ”the evil Google”, whose data capturing is compared to a wickedness in parity with that of Monsanto. Leading digitalists have been raving about this for years, about how we have to protect our data from the malicious Google and, more importantly, how we should guard ourselves from actually becoming them.
This is not an altogether irrelevant question in this context either. Because clearly, digital gorillas like Alphabet, Amazon, Apple, Android, Adobe and Facebook, just like the feudal lords of the past, have built their momentous success on centralized models and data gathering. Putting it bluntly, they have been fiesting on our personal information. If you think blockchain technology wouldn’t pose an immediate threat to their entire existence, think again. And if you think I’d shy away from waking a sleeping giant by pursuing this new technological breakthrough, think again on that one too. And I’m not alone.
But don’t expect them to sit idly by in the age of the blockchain. The empire WILL strike back.
A Revolution That Eliminates All The Middle Men
It is really rather modest technology that we’re dealing with here. In essence, it’s just a distributed database of irreversible data, that happens to be arranged in blocks and made available to all parties involved. It is firmly encrypted to prevent access by anyone else.
Yet, this is the basic concept that is now changing the entire world.
Last year made history, as the cryptocurrencies grew to a point where the “traditional world” wanted to get in on the action (invest/speculate) and control (verify/regulate). It made a mark by showing incredible returns in the 1 360 cryptocurrencies on the market, where the largest ones increased in value by an insane factor of tens of thousands and generated billions of dollars through ICO’s.
Though, what is really changing the world are not the cryptocurrencies themselves, but in fact the base it’s all built on, the blockchain. Fully digitized DAO’s (Decentralized Autonomous Organizations) as well as the DAPP’s (Decentralized Applications) are removing the need for any and all intermediaries. Not just the “digital gorillas“ — but everyone else as well.
We will be able to safely and simply manage every single transaction between people and machines, tangible or intangible. This is exactly what is happening currently and expect far more in the years to come. During 2017, we have seen concrete things, like systems for housing purchases, safer voting practices, the creation of encyclopedias impossible to either troll, censor or manipulate, and an eased tracking and quality assurance process of both food production and food distribution. Shipping companies are already earning millions of dollars by simplifying their workflow and cutting administrative costs. Traditional banks have even adopted blockchain for reimbursement flows, and they are using blockchain protocols from Ripple to manage inter-group transactions between accounts across borders.
And it just goes on and on.
According to McKinsey, in 2014 the value of services and products distributed through data flows totaled 2 800 billion USD. That’s more than the total trade of physical goods. In 2017, we have 550 terabytes of data flow per second, a substantial increase from 46 TB in 2010. And the numbers are expected to quadruple over the next three years.
What technology do you think will take care of all this? And how many of the traditional intermediaries, such as banks, trading houses and retailers, do you think will be needed in this process? Not many.
So how do you think your life on the blockchain will appear? Well, wait and see. That’s what you’ll get in our next chapter. But let me give you a hint — it’ll turn your world upside down.