In today's video I discuss cryptocurrency being stuck between two stools. Namely will cryptocurrency and blockchain technology be a revolution that not disrupts but transforms the way things work. Or will it be assimilated into existing industries and help them evolve in an ever changing technical landscape.
An analogue can be drawn to the situation regarding online streaming of video content. Blockbuster was the dominate player in the DVD rental market and had developed a model of mailing DVDs to customers. Blockbuster was approached by the owner of Netflix, a fledging online streaming company to buy them out for $50m. It was an opportunity for Blockbuster to evolve. Blockbuster refused. Netflix became what it is today and the rest (including Blockbuster video) was history.
I see a lot of parallels with cryptocurrencies today.
I like to break things down into simple principles.We have a lot of things happening in the cryptocurrency space. For me it comes down to the nature in which cryptocurrency will change society.
Will it revolution things or be a more gentle evolution?
Medium of exchange/ Store of value
For example if we look at the debate around Bitcoin and whether it should be a medium of exchange or a store of value.
To my mind the store of value argument falls into the evolution realm. Ultimately it is looking at bitcoin and saying 'it's similar to gold and why not have it as an alternative store a value. Let the gold bugs and the bitcoin maximalists argue on the fringes about which is the safer hedge against a financial Armageddon.' Whilst this would have utility it is not going revolutionise the way people live their day-to-day lives.
However if you look at the medium of exchange argument, that would revolutionise the we live and do our day-to-day transacting with each other.
Public blockchain/ Private blockchain
Similarly if we look at the debate around public and private blockchain. A private blockchain is an evolution of the way existing business and institutions operate. It's just a more secure (albeit and inefficient one) improvement to their database architecture.
Business operating on a public blockchain will need a fundamental rethink on how they operate.
Free fair launch vs ICOs
Even down to the funding models surrounding Cryptocurrencies. There was a time when it was anathema to have anything but a free a fair launch of a blockchain. With no premine or tokens reserved for anyone. This makes sense if you're looking to launch a chain which is going to be the bedrock of society or used as a global currency, you want it's inception and initial allocation to be as far and as open as possible.
If however you're looking to simply raise funding for a business idea, using an ICO to tokenise the idea as alternate method of raising funds may make sense. However it nothing more than an evolution fund-raising. Often beyond raising capital the value proposition of the token itself makes little or no sense.
Even in Steem the principles apply.
SMTs could be seen as an evolution, that enables existing websites to tokenise and incentives user interaction.
Whereas Communites on the Steem blockchain is a revolution that we're inviting people to join.
What we talking about
Whenever I get into conversations or debates with people about cryptocurrency, I like to understand as a starting where they're coming from. Are they trying to evolve or revolutionise. If you haven't guessed what side of the fence I sit, you'll have to watch the video to find out!