Sometimes it’s the oldest stories that have the most to say. Pondering the smoldering wreckage of the crypto crash puts me in mind of the Greek myth of Daedalus and Icarus. Daedalus was a brilliant inventor, who for many complex reasons (this is a Greek myth, after all!) winds up trapped with his headstrong son Icarus in the depths of a labyrinth, on an isle in the stormy sea.
Only flight could save them. Daedalus, the genius that he was, built two massive sets of wings of feathers, twine, and wax. He and his son would be the first humans ever to fly. Icarus set out to make the first departure. Daedalus warned him not to climb too close to the sun – for if he did, the wax on his wings would melt and he would crash to a watery demise. Icarus took off, and was so infatuated with this new technology that he could not control his excitement, maneuvered too close to the sun’s fiery rays, and fell into the sea.
Like Icarus, many investors and entrepreneurs have been flying high around cryptocurrency. This new technology would revolutionize the international financial system, they claimed, and further, that they would be the ones to do it. Others, like the more prudent Daedalus, while they may have appreciated the transformative nature of the blockchain, chose to hold back, wary of a collapse where their investments would crater in value. Now that collapse has happened. Bitcoin’s value has fallen from a high of $20,000 to its present value below $4,000 and the total market value of crypto assets has dropped from a high of $800 billion to around $130 billion at present. It is safe to say that this particular category of asset flew too close to the sun and investors have gotten burned.
That said, humans did eventually get around to successfully flying. Likewise, the blockchain retains enormous transformative potential. A crash has terrible consequences for those it impacts but doesn’t denote the death of opportunity. I can think of at least six areas where a productivity improvement regarding clarity and transparency could create true value from the blockchain.
1. Supply chain and logistics
Nearly every product could be delivered faster and cheaper than it currently is. By adding physical and nonphysical goods to the blockchain, it will be possible to monitor and streamline delivery processes for every kind of goods without relying on human agents to verify their status – from diamonds to food, to electronics, all will be instantly trackable and traceable without reliance on any middleman. Say goodbye to fake purses.
Without having to rely on a third party to accredit someone’s knowledge, any form of learning will be stored on the blockchain. If one starts learning to draw on an iPad or submits thoughtful blog posts somewhere, those skills could be stored onto the blockchain and provide instant accreditation, with an indication of a person’s skill and work ethic, that is thousands of times more precise than any university could hope to prove.
Medical data is notoriously diffuse and decentralized. With medical information stored on a blockchain accessible to all medical professionals, a degree of transparency and analytics will exist that has never before been possible in the healthcare system. Watch for a plethora of treatments and drugs to arise out of this great bounty of newly-accessible data and insights.
The modern IT infrastructure has generated a massive influx of information and data, much of it useful and true, but much of it fake and destructive. The blockchain will allow for all data, communications, and information to be tracked, logged, and registered, with the false sorted out from the true. This will set the stage for commonly-held truths to return into vogue.
Given that banks serve the purpose of clearing transactions, it is cheaper to cut out the third party banker-verifier and have the blockchain verify the transaction. This will cut down on a lot of waste in our economic system, and put a lot of bankers out of jobs as individuals and institutions increasingly turn to methods of exchange that are cheaper and more economically efficient to store and exchange wealth.
6. Deep science
Blockchain will provide a level of clarity and precision to complex scientific processes in microbiology and physics that will allow for better analysis and clarity of studies and results, bringing the human race closer and closer to the truth on our farthest frontiers.
Crashes notwithstanding, blockchain, I feel, will remake many of our institutions. However, while these potentialities are quite exciting, any entrepreneur looking to enter the blockchain space must retain a healthy sense of Daedalus’ skepticism, asking themselves if it is actually the case that their project is delivering a real, legitimate, tangible, productivity improvement. One of the Wright Brothers once noted of flight that the trick wasn’t getting an airplane into the air, it was keeping it there, and most importantly, controlling its flight. That is the case with blockchain, too. Icarus flew; he just didn’t endure. Successful blockchain companies will need a bit less high flying and a good bit soberer flight plan.