Why Should I Care About Blockchain?
This is a really valid question that I was asked recently, and it wasn’t someone who was necessarily a skeptic that asked. It was someone that is a very smart business person and is not against technology. Here was the logic we discussed:
We see there are a couple options for Blockchain technology and business.
- Blockchain technology goes the way of the Internet, and becomes ubiquitous in our lives and in our business. In this case, I won’t really need to understand the underlying technology. It will have to be user-friendly and secure enough that it works like email or a website. I don’t understand how an email gets from me to you, but I trust that it will get there.
- Blockchain technology never completely makes it, and I haven’t wasted my time learning it.
I’m in the camp that says Blockchain is going to be ubiquitous and disruptive, so I’ll take that part second.
I know there is the chance that the technology just doesn’t catch on completely. It remains relegated to university labs, computer science and math whizzes, and Libertarians. However, I think we’re already too far past the point that we can go back. Beyond just the growth of Bitcoin, there is so much time and money being devoted to finding the applications for it.
According to IDC, there is an estimated $11.7 Billion to be invested in Blockchain technology by 2020. In addition to the investment by business, the US, and other countries are spending time struggling with the regulation of the tokens, cryptocurrencies, privacy, tax implications, etc.
In February, SEC Chairman Jay Clayton said, in a hearing:
“To be clear, I am very optimistic that developments in financial technology will help facilitate capital formation, providing promising investment opportunities for institutional and Main Street investors alike. From a financial regulatory perspective, these developments may enable us to better monitor transactions, holdings and obligations (including credit exposures) and other activities and characteristics of our markets, thereby facilitating our regulatory mission, including, importantly, investor protection.”
The group that many believed would be against Cryptocurrencies actually sees great potential for not only their own regulatory and reporting usage, but also for all investors and business, as a way to raise more capital.
Beyond the time, effort, and money that have been invested, and are planned to be invested, I also fall back on this: Look at the list of people and companies that are behind Blockchain technology:
- MIT
- Andreesen Horowitz
- Tim Draper
- Mark Cuban
- JP Morgan
- Goldman Sachs
…and the thousands of brilliant computer science and math engineers designing the next Blockchain and smart contract technology.
If Blockchain doesn’t work out, that means all those very smart people are wrong…or something even better came along. And if I have to bet on the future (which I can using Augur or Gnosis), I’m betting on those folks. They’ve done well for themselves, and for millions of others.
Now, for the first argument above…that Blockchain will be ubiquitous, and therefore user-friendly enough that using it is equivalent to asking the IT folks at the company to install it and replace our SQL Database, and I don’t care how it works.
I think that scenario will happen, but I just don’t know how long that will take.
I started college in 1993, and the Internet was just starting to grow. My sophomore year, I had a computer in my apartment that was connected to the Internet via dial-up. I had to get a computer science student to come to my apartment and install the TCP/IP software and show me how to send an email.
In my junior year, I downloaded and started using Netscape, which was the coolest thing ever. I could now see all my fantasy football stats as games were happening. This was also the year we had an assignment due in a class, and we were to turn it in by downloading a spreadsheet, completing the assignment, and emailing it back to the professor. We spent so much time calling each other and seeing if we did it correctly, that it would have been more efficient to print it, write the answers, and walk them to our professor’s office.
I also took a class in HTLM web design. It wasn’t even a class that was officially through the University, but was taught in the student center by a comp sci major. I designed an absolutely horrible Houston Rockets fan site, complete with animated GIF’s.
It was around this time that Amazon launched, selling books on the Internet. With that success, everyone was looking for things they could sell online, and, more importantly, go public and waste billions of dollars.
From there, the Internet grew and grew. At first it was just disseminating basic information, and sending email. It then became an avenue to sell to consumers. With the increase in bandwidth, came the addition of more content like music, video, and then blogs. Next came MySpace, Facebook, Twitter, Linked In, Instagram, Snapchat, etc.
Social media has been hugely instrumental in political revolution, disaster recovery, and millions of romances.
Businesses were using the Internet for back office functions, and eventually had the ability to take software, databases, email, and other functionality to the cloud, so their IT footprint could be lighter, and their people could be dispersed and more efficient.
The smartphone launched the wireless internet, where we now had mini-software as apps on our phones, that interacted with servers in the cloud. These apps brought so many new efficiencies. With the ability to be online all the time, add phones with GPS, and apps, we now found hidden value everywhere. An extra room or vacation home could easily be rented via AirBNB. The idle car could now be used to give rides by utilizing Uber and Lyft. And Upwork and Fiverr have helped creatives and professionals all over the world find each other.
These are all things you know already. However…these all happened between the time I was in college and today — that’s 25 year. Countless trillions of dollars have been made. Also countless jobs have been lost or lowered in value in this country, and millions of new job functions have been created. New industries have become common, and even replaced the old stodgy companies in the Dow 30 and S&P 500.
I know I’ve utilized the Internet, but I certainly didn’t take advantage of the HTML class I took. I didn’t look at the ability to communicate electronically as the springboard for all we have now. I wish I would have.
So, yes, Blockchain will become ubiquitous. It will replace our databases, and there will be easier-to-use front ends. We’ll all be using Blockchain and other Decentralized Ledger Technologies without even thinking about it. It will lead to revolutions — industrial, political, financial. However, will you take advantage of the opportunity to learn more now?
We’re at the equivalent of 1993. Are you going to care enough to make sure you keep your job, or your business? Are you going to help launch a new company, product, or a new industry?
I care because there are so many ways I can see Blockchain being utilized in the near and distant future, and this time I’m going to be a part of it.
