Can a situation occur where most of new technological buildups or growing innovations are tagged harmful, useless, risky or not worth it? Can there ever be a tendency towards disruptive innovations having negative impact in the cryptocurrency universe or blockchain industry? In short, are disruptive technologies to the industry an all time positive, negative or even a mixture of both sides?
Well, Let’s Do This Statistically!
40% of the world’s population has access to the internet. 90% of the world’s data was generated within the past two years. 5 billion people in the world own a mobile device. 2.65 billion people in the world use social media. There are 1.35 million tech startups around the world. The number of smart devices collecting, analyzing, and sharing data should hit 50 billion by 2030. 56% of Earth’s population has internet access while 127 new devices are connected to the internet every second. (That’s too far, let’s come home)
In the cryptocurrency industry, blockchain startups in 2017 numbered 178 with a total funding of $7.65m. 29% of consumer products and manufacturing industry used blockchain then, but now it’s just 34% share of organizations refusing to inculcate blockchain technology. Total number of blockchain wallet users worldwide numbers 55.9m with Bitcoin having a total market share of 66%.
Above is the growth statistics of how fast technological innovations are constantly on the rise. We see its rise and massive adoption too especially in the cryptocurrency and the blockchain industry as stated in the accelerating figures.
This does indeed prove that good things will continually beget good things. The industry on its own, keeps birthing several technologies that are serving as aids or standing pillars towards it’s continuous growth.
Disruptive Technologies or Innovation
“The Innovator’s Dilemma”, Published in 1997, brought to limelight Clayton Christensen idea of disruptive technologies and ever since, it has become a word or idea in startup businesses that seek to create a product with mass appeal.
Disruptive technologies are innovations that provide a shift or paradigm from the way things are done or formerly operated by consumers, industries, or businesses. It rolls off systems in place and replaces it with newer innovations made with recognizably superior features.
A disruptive technology can be said to be an advance or improvement on an older process, product, system or mode of operation. It’s perceived improvements are always obvious and can serve as a bait for it’s adopters.
Recently, we see lots of rising Technologies like; e-commerce, online news sites, ride-sharing apps, GPS systems and yes, blockchain! Prior before now these technologies were not known neither were their use consciously demanded for.
Hence, situations and circumstances have propagated for it’s creation and automatic rise with the cryptocurrency universe totally inclusive as we continually see a steady build up of technologies.
Blockchain; As An Example of Disruptive Technology
Blockchain, the technology basically behind Bitcoin, is a decentralized distributed ledger that records transactions between two parties. It shifts transactions from a centralized or single authority server-based system to a transparent cryptographic network. The technology uses a peer-to-peer consensus to record and verify transactions, hence eliminating the need for a manual verification.
Blockchain is an application of distributed ledger technology that is taking over the world enormously. It has an aim set to disrupt most industries worldwide as we recently see in areas of finance, economy, security, e.t.c
Developed through Bitcoin as its first application to serve as a disruptive technology to the traditional banking system of centralization, the build up of blockchain technology comes with three key features. They are it’s decentralization, transparency and security features.
These features are aimed to make it more trustworthy than the former technologies already in place before it’s arrival. It has helped financial transactions as we see to be more secure while reducing fees charged by banks also facilitating faster transactions that are free from control and a centralized authority.
Moreso, Blockchain technology has exceeded it’s build up idea of just financial transactions. It doesn’t just improve the deficits of the financial services industry but also has a potential to resolve the inefficiencies of many other industries. It doesn’t just allow us to digitize money, we now have an opportunity of placing both physical and intangible assets such as copyrights, commodities, or land ownership rights on to the blockchain for secure proof of ownership and easier transferability.
Another wonderful attribute about this technology is Smart contracts. This is an application of blockchain technology, that helps to self-execute functions when certain conditions are met. It eliminates the need for an intermediary or a third party thus reducing costs of transactions between parties.
Inclusively is the blockchain’s ability to enable a shift from an ownership economy to a shared economy. This technology will continue to evolve, playing a significant role in transforming inefficient and outdated business practices while redistributing wealth and economic rights to people.
Please note that a blockchain is a disruptive technology because there were systems already built in place to handle what it handles now. Hence it’s creation is termed an improvement to the former.
Disruptive Innovation; Not Always A Case of Inferior to Superior
It has always been a case of moving from an inferior plane to a more Superior one. From common to uncommon, from good to better and better to best. However, Ulrik Lykke, Co-Founder at Crypto Hedge Fund ARK36, believes that indeed that is not usually the case.
He affirms that the case of disruption always happens at a cost. New technological advances will always make inroads. Be it when it comes to increased productivity, ease of use, or efficiency however, there are many examples where things were not replaced by other things that were technologically superior.
Take language as an example. Many researchers in the field of linguistics have worked on creating the perfect language; a language that is easy to pronounce, has an easy grammar and a fairly logical vocabulary. Yet such scientifically produced languages have never replaced any of the major spoken languages such as English or Spanish. So while it is natural that something which is technologically superior will sooner or later replace alternatives this is not always the case. In the case of cryptocurrencies, we are now at a point in time where the technological building blocks which can be used to substitute many structures in the traditional finance systems are there for anyone to use.
Negative Impact of Disruptive Technologies
Surprised? Well, it seems all good. After all, constant innovations are for good.It can’t possibly pose a risk or danger right? Let’s see about that.
Lykke believes that it can and there are many potential pitfalls of rapid technological innovation. For the sake of this conversation he highlights what he believes are the two most central ones.
“Firstly, technological advancements always carry a risk. If you replace existing working structures with something that promises a higher degree of effectiveness, you always run the risk that the replacement technology will suffer difficulties or fail at delivering its promise. When it comes to technology there is always a big gap between a theoretical innovation and a practical innovation.
For cryptocurrencies, we believe that many projects have set out to solve remarkable issues but fear that many of them have successfully solved issues theoretically but need more time in order to build practical solutions that can actually be used in the real world. This is probably the exact reason why it is always easier to be a proponent of bitcoin than any other project in the domain. Bitcoin is laser-focused when it comes to solving one issue rather than risking technological implementations (that may fail) in order to solve even more complex issues”.
Conclusively, as regards investment, investing in companies that create or adopt disruptive technologies carries significant risk. Many products considered disruptive take years to be adopted by consumers or businesses, or are not adopted at all. The Segway electric vehicle was once touted as a disruptive technology until it wasn’t.
Duru Joselyn is a content creator, writer, self development coach and news analyst. She specifically enjoys writing on anything pertaining to cryptocurrency and the blockchain industry. Joselyn is a fun loving Nigerian who not only has a flair for giving information updates; she also enjoys a variety of outdoor activities especially traveling and photography.