Tangled between Blocks: The Future of Blockchain Business
“I’m reasonably confident … that the blockchain will change to a great deal of financial practice and exchange … 40 years from now, blockchain and that will follow that will be more prominently in that story than will bitcoin”, Larry Summers, US Former Treasury Secretary.
The World will change so much and so fast with Blockchain technologies, also called DLT (Distributed Ledger Technology). If you don’t start to understand them now, you take the risk of not understanding anything of what will happens around you in the next years. Even if you are a digital native, you can become some sort of digital aborigine, isolated, tangled, in the jungle of the network of blocks.
Many say, DLT it’s a disruptive technology which will allow us to suppress the central institutions. Honestly, I don’t think so. Now, neither is it disruptive, nor will it be completely decentralized in the future. We are like the Internet in 1995. It’s a mature technology, but a little green also. There is much to evolve.
Now there are many laboratory experiments of young entrepreneurs, like Cow-boys in the Far-West, who want to change everything, but their influence is still too small in the real World. The current disruption is idealistic: the new entities like ICOs, Bitcoins, exchanges, new cryptos and tokens, want to reinvent the world making quick money. What provokes enormous enthusiasm, as happens with the great social changes, but in reality, the true revolutionary changes will come later. Shortly after.
It will take place when there will be a conflict between traditional Governance and the mathematical Governance of the DLT. The result will require new models, concepts and social consensus. Complex and diverse integrations will occur between physical and digital organizations, with a new redistribution of power and further correlations of contradictory forces. There will be winners and losers on both fronts. From that new World that comes, ours will be unrecognizable. For those who remain in the past, the present will be incomprehensible and the adaptation impossible. They will be expelled from the Digital Promised Land.
The DLT represent the Digital Transformation of the Digital, a Metadigital Transformation, which will be extremely wild. The changes that the DLT will cause, not be technological, they will be systemic. It will affect the social foundations such as Identity, Property, Trust, Governance and Value. Next to nothing. Finance, Economics, Politics and Society itself will be in a real shake up. Therefore, all this cultural transformation is also called the Internet of Value or IoV . It’s the Internet 2.0 a better model of the Internet 1.0 that had three main problems:
1) Governance: A complex interdisciplinary network of organizations, increasingly threatened by the oligopoly of large digital corporations, keeps the network neutral and functioning: IANA, ICANN, ISOC, IAB, IETF, IGR, IRTF, W3C, etc.
2) Security: The technical functioning of the network is compromised, due to the weaknesses of its TCP / IP protocol, which cause increasingly frequent global DDoS attacks.
3) Privacy: Being an open network, thought for good people, nowadays it is endangered by the global capacity of massive espionage of the secret agencies.
The DLT can be considered as the opportunity for an Internet 2.0, which is built on top of the old one, without its flaws.
1) Linux Governance: The Blockchain converts the precarious institutional consensus of the Internet into a peer-to-peer network (P2P like Bitorrent). From being a decentralized network, it become a distributed network, where consensus is assured, regardless of the evil and power of the players involved. Governance is fulfilled thanks to the majority of loyal nodes, with an open source organization and with a Linux cooperative development community.
2) Security with triple entry accounting: This network of equals does not prevent the existence of evil technicians, but neutralizes them, since the vast majority behave well to obtain their rewards. The mathematical foundations of a chronological and immutable mega-register, shared by the whole network, make it unhackeable and infallible and, therefore, nothing has been safer than that before.
3) Military privacy: The exchanges of information in Blockchain are based on cryptographic algorithms of public key and long size digital signatures, which allow to maintain the privacy from end to end in the transactions.
There are many alternatives to Bitcoin Blockchain such as Tangle from IOTA or Hyperdlger, but also complementary technologies such as Ethereum, EOS or NEO. Private and public or hybrid Chains, Altchains and Sidechains. It’s not clear who will be the technological winner and who will be able to solve the scalability problems, but the future is DLT.
It’s important start today to analyze how the DLT can affect your organization or how you can take advantage of it. All companies and institutions need to build a Strategy for product innovation and business models based on DLT looking for new opportunities and growth. We propose a progressive DLT adoption strategy, that depending on the size and maturity of the organization, the phases can be parallelized or accelerated:
1) DLT Observatory (Industry and risk monitoring)
2) ThinkingLab DLT (Strategy and ideation of business and product)
3) Company Builder DLT (Start ups oriented)
4) Spin Off DLT (Outsource some team, project or department, that has begun to work on the subject)
5) Newco DLT (Create a new company with the objective of developing the business based on DLT)
6) Venture Capital DLT (Diversify the investment in different start ups)
7) M&A DLT (To buy those companies that have effective applications for our sector)
It seems time is giving the reason to the renowned economist Hayek who postulated “the abolition of the government monopoly of the issue of money should involve also the disappearance of central banks as we know” (Denationalisation of Money — The Argument Refined — An Analysis of the Theory and Practice of Concurrent Currencies, IEA, 1990, p105).
Can you imagine the size of the changes we are going to face? Be ready!
About Rais Busom
Rais holds a degree in Philosophy with postgraduate courses in ESADE and Babson College. He is a digital business expert and has been working in technology and Internet related business ventures for more than twenty years. Rais specializes in leading product innovation. He is a skilled senior business manager with the proven ability to help new businesses to grow and succeed. Enthusiasctic of Blockchain since 2014. You can follow him at GamingBlock.io