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Tuesday, April 7, 2015

Max Borders’ Last Word on Stossel

Further thoughts on disruptive technology and permissionless innovation

In a medium driven by soundbites, you don't get to go deeper. It is of course a joy to do the Stossel show, but there is a lot I would have like to have said that time and editing did not permit.

First, when Stossel asked me about bitcoin falling from $1000 to $200, I was talking specifically about the Gartner Hype Cycle. Most major innovations go through this cycle, and bitcoin is probably no exception. That says nothing about its viability, any more than the “irrational exuberance” of 2000 made the Internet unviable.

Notice how with any technology there is a peak of inflated expectations followed by a trough of disillusionment. It could be that bitcoin hitting a $200 low last year represents that trough in terms of price. But the price of bitcoin, as well as patience, is making a slow climb out. Now people are looking at the phenomenon a little more dispassionately. 

Second, the producers (fairly) said I shouldn't talk about the “blockchain,” because people would get confused between bitcoin and the blockchain, it's underlying protocols. And yet the underlying blockchain technology is where much of the good stuff with respect to empowering the poor — property titling, dispute resolution, and microfinance — can happen. And all of this really can help the world's most destitute people. (To learn more about how, see this Freeman interview with Susanne Tarkowski Templehof.)

“Disruption” has become a hackneyed term. But true disruptive innovations, a la Clayton Christensen, are often innovations that help customers of more modest means find simple uses first. Here's another chart that shows how simplicity and access allow certain innovations to break through a stratified market.

Finally, I really would like to get rid of that “big honkin' thing” in my pocket. But as far as it goes, I'm more excited about doing so using with bitcoin, or a similar alt currency. Not only am I excited to see the U.S. dollar get some competition, it can't hurt that it's simply ultra cheap to pay with bitcoin.

Not to put too fine a point on it: Creative destruction is about letting thousands of people compete to make things better, faster and cheaper for all of us. And the blockchain is a Pandora’s Box of wonders. We just have to have the patience to see beyond the hype as entrepreneurs create the future.

  • Max Borders is author of The Social Singularity. He is also the founder and Executive Director of Social Evolution—a non-profit organization dedicated to liberating humanity through innovation. Max is also co-founder of the Voice & Exit event and former editor at the Foundation for Economic Education (FEE). Max is a futurist, a theorist, a published author and an entrepreneur.