Axios, the official news source of 4IR, just declared the CEO obsession with Blockchain over. With blockchain in free-fall from Gartner’s Peak of Inflated Expectations to its’ Trough of Disillusionment, Axios’s pronouncement seems right on schedule.
The headline is clickbait, but Axios based it on hard data: the frequency of blockchain mentions in S&P 500 earning calls and analyst presentations. Presuming you can accept the idea of quantitively measuring obsession across an executive role, this seems a reasonable metric, which spiked in the first half of the year before cratering (even more precipitously than the price of a Bitcoin).
If the obsession has past, the mere fact that database technology ever popped up in earnings calls at all still shows that something big is up.
Blockchain — the public transaction ledger technology that enables Bitcoin — is a decade old. Yet until very recently, to most executives, it was new and mysterious technology — associated mostly with cryptocurrencies that transformed gamers into millionaires, and darknet hackers. Only after mainstream techies got their arms around it did they recognize it for what it is: a distributed database. A couple months ago, Vint Cerf — the father of the Internet who has a talent for cutting through the hype — presented a flowchart to decide when to use blockchain:
Current disillusionment shouldn’t obscure the fact that blockchain is a very special sort of distributed database. It has incredible disruptive potential, and it’s fiendishly clever. It needs to be, because it was developed for an audacious purpose: eliminating banks.
Thomas Jefferson wrote: “banking establishments are more dangerous than standing armies.” Henry Ford that: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” (maybe — Ford didn’t actually write his autobiography). So while fear and loathing of banks isn’t new, it was particularly poignant in the run-up to Bitcoin’s creation when Satoshi Nakamoto, the now-infamous pseudonym of Bitcoins inventor, wrote:
The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.
When releasing Bitcoin, at the start of the Bitcoin blockchain (its genesis block), Satoshi included the text “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This snippet served dual purposes: authenticating Bitcoin’s initial creation date, and highlighting the consequences of banks betraying their societally-bestowed trust.
Unlike most information technology advances, blockchain doesn’t speed up processing of data, accomodate more of it, present it better, or provide any other visibly obvious improvement. If anything, it’s often the reverse—Bitcoin intentionally consumes computing power and electricity. What blockchain does do, mainly, is remove the need for a trusted, centralized authority to lord over some collection of data. That makes it rather less well-suited to increasing the efficiency of organizations, and more well-suited to eliminating them entirely.
Using the red ocean/blue ocean model as a framework, blockchain enables a novel blue-ocean strategy: poisoning red-waters. While Satoshi’s crosshairs were on banks, centralized authority is the raison d’etre of many long entrenched institutions (including lots of S&P 500 businesses). Once S&P 500 CEOs connected the dots, its easy to see why blockchain began disappearing from earnings calls.
Blockchain is also well-suited — perhaps uniquely amongst all the things that humans have invented to date — to creating indelible, lasting records of transactions and events. The permanent record of transgressions, hung like Damocles Sword over generations of school kids, is a perfect use-case for blockchain. With the personal privacy pendulum swinging the other direction, proposing to implement this concept would, just now, be tone deaf. Implementing permanent records for things is a different story, especially things where provenance matters — cars, planes, objects d’art, and heads of romaine.
So, more for societal than technical reasons, blockchain is a water-on-stone technology: over many years, it will completely alter the landscape — with the path only clear in retrospect. While these canyons are being carved, we’ll see countless blue-ocean businesses that use the idea for proving provenance, managing custody chains, creating digital scarcity, tokenizing revenue streams, etc. But the full contour of the landscape will take many years — perhaps decades — to reveal itself.
While blockchain seems destined for an extended stay in the Trough of Disillusionment, another long-emerging technology just moved off Gartner’s 2018 chart entirely: Virtual Reality. After 3-years crawling out of said Trough, it’s removal the 2018 Emerging Technology chart signals its arrival as established tech.
The military has used bits and pieces of what we’d consider VR for decades. In fact, after the Berlin Wall fell, as part of a consulting contract, the Russian government requested that my team procure an “armchair of virtual reality.” Having been informed by their intelligence service that our President used one for decision making, the Russian executive branch feared a virtual reality gap. The details of that true story remain classified (not really, but eliciting them takes at least a beer).
When it comes to useful applications, VR is the other end of the spectrum from blockchain: rather than new technology searching for the right applications, VR use-cases have been stacking up for years waiting for the technology to mature. Gamers, happy to deepen immersion into their virtual gaming worlds, quickly embraced wired VR helmets. But VR has yet to find a wider audience. There’s not yet a killer app, and — finally freed from wires—most people have little desire to physically re-tether to computers. The recent release of the standalone, sub-$300 Oculus Go promises to change that.
With the Go, VR technology checks the basic boxes for mainstream adoption: cheap, wireless, highly visible and widely available in the usual places, and (sort of) user-friendly. Using a Go today is reminiscent of an early Windows laptop: programs mysteriously crash, navigation is clunky, processing is slow, battery life is limited, and the range of applications — relative to other devices — is quite small. Yet it’s perfectly usable for gaming and, even in its’ current primitive state, might be revolutionary for applications involving training and/or remote communications. Walmart just decided to buy 17,000 Go’s to train a millions associates on improving service, starting with handling holiday season crowds.
Going back to the red ocean/blue ocean model, like blockchain, VR is also uniquely suited to blue-ocean strategies — but in a kinder way: creating entirely new worlds full of pristine blue water. Up until VR, new technology has continually marched toward greater distraction and interruption of daily activity. VR, ironically, swings the pendulum in the other direction — it offers complete immersion, free (for those who want to be) from distractions. Meditation apps, an emerging VR category, take full of advantage of this and are one of the first useful applications that VR uniquely enables.
Many more of these are following, and VR is gaining momentum. So starting next time, we begin exploring those oceans.
