The Internet-Blockchain analogy — thoughts for the future
Much like the emergence of blockchain technologies today, up to the late 80’s, the Internet, then affectionately known as ‘cyberspace’, was pretty much entirely autonomous from the ‘real world’. It was unregulated, it had no hierarchy, and because access was based largely on one's knowledge of the technology that powered it, the Internet was a network mostly occupied by small communities of people, united by visions of collaboration and innovation.
In ‘93, the release of the Mosaic web browser made commercialisation of the Internet possible and quickly eroded the existence of these parallel universes, as they swiftly began to merge into one. At that same time, words such as ‘internet’, ‘marketplace’ and ‘e-commerce’ began to circle hungry investors looking to buy some fresh stocks.
By the mid to late 90’s, investors had abandoned all caution and logic as they streamed money into Internet startups for FOMO. Here’s a fun fact: In January 2000, there were 16 dot-com commercials during Super Bowl XXXIV, each costing $2 million for a 30-second spot!
Companies — many with highly questionable business models — that had yet to create revenue, profits, and in some cases, even a finished product, went to market with initial public offerings that saw their stock value triple and quadruple overnight! It caused a feeding frenzy among investors, ultimately leading to the Dotcom bubble.
Fast forward almost two decades later and we have venture capital investors pouring funds into blockchain startups as they look to capitalise on the ledger’s transformative potential. The identity, vision and values of a company is determined by the motives of its stakeholders. If you have a community of stakeholders whose intentions are only driven by the price of the token then you are bound to have problems. The volume of failed ICOs is evidence of this.
But the hysteria is not just fuelled by greed. At the height of the hype, blockchain technology had been making headlines as the potential solution for everything from cancer to world hunger! It seems that some devotees had entered a kind of social mania, conceptualising simulations before the technology itself even has the ability to bring value to the market.
The lesson that can be learned
No one emerging technology can be the engine for all business models. Some business models are tailor-made for a new technology or are able to easily adapt to take advantage of its most salient features. Others may have to wait for the arrival of new advancements. The key to business success is pinpointing where the ‘leverage points’ lie — areas in a market structure where a solution can be applied. The bottom line is this, in order for your product to succeed it needs to solve a problem.
Right now, Edgeless, the company which I represent, is solving problems in the gambling sector by using blockchain technology. Decentralised applications solve major trust issues that once plagued the online gambling industry. The technology stores records of all games and bets, their results, and the amounts that are won and paid out. Players have constant access to the transaction history to confirm that winnings are distributed and the odds are not rigged.
Just as Amazon rose from the ashes of the Dotcom bubble to utilize the wonders of the net, right now, Edgeless is successfully harnessing blockchain technology for a better future for the gambling industry.
The future of blockchain technologies
Crypto-overhype and speculation has caused the term ‘blockchain’ to lose its ‘cool’. Now companies are looking for a new buzzword and the media is looking for a new story. Not surprisingly, much has been written on ‘the death of the blockchain’.
A technology is an application, it is not a product, it doesn’t just go out of circulation. Technologies don’t die, they evolve, they are built upon, or their components are isolated and extracted as new developments are deployed. The evolution of telecommunications is an excellent example of this. The telegraph, discovered in the 1830’s, paved the way for early telephone networks which in turn laid the groundwork for the technologies powering the Internet today.
No technology is an island: grinding against the limitations of one is the essence of innovation and leads to the creation of others. Let’s not forget that for 20 years the Internet was entirely nothing like we know it today, that is, until Tim Berners-Lee invented the world wide web, opening the Internet up to the masses. Interestingly, now the terms ‘internet’ and ‘web’ are used by most people interchangeably when in fact they refer to completely different technological constructions!
There is no denying that there is a range of limitations delaying the adoption of blockchain technology across various industries. Work definitely needs to be done. So why waste our time indulging in media wordplay, gimmicks and hype. Let’s get on with creating solutions.