Bitcoin provides a great example of how higher order effects can tip over an innovation that started on the creative side of creative destruction towards the destructive side. As the title and abstract of Satoshi Nakamoto's paper clearly suggests, bitcoin was envisioned to be a peer-to-peer version of electronic cash system that would allow online payments to be sent directly from one party to another without going through a financial institution. Today's bitcoin is fast becoming less of an electronic cash payment system and more of a speculative asset bubble generator. I would hazard a guess that most of the people buying bitcoin today are doing so NOT because they want to use it to pay for something. They're likely doing so because they want to hold on to it, wait for the exchange value with fiat currency to go up, with the hope that they can cash in rich one day.
There's nothing wrong with that per se. Money after all serves multiple purposes. Money can be a measure of value, store of value, and medium of exchange. However, the true potential of bitcoin or any other decentralised digital currency is the freedom of permissionless innovation it can unleash when government's political abuse of fiat currency and big bank's stranglehold on financial transactions is taken out of the innovation equation. This ain't gonna happen if everyone is focused on the virtual net worth of the Winkelvoss twins. For example, the main stream media news of the past few days was focused on Bitcoin futures. So they've already started to over-financialise something that has not yet attained the status of a well-functioning and decentralised digital currency. If it's not yet a currency then what is bitcoin right now? Is it the 21st century digital equivalent of 17th century tulips? Think of it this way, if everyone who bought bitcoin just holds on to it waiting for a future pay day, then what use would it have? They'll just be cryptographic keys chained together with no use at all. If they're not useful at all then who would buy them?
Of course, bitcoin is not the same as the blockchain which is the cryptographic and incentive innovation that prevents the double spending of digital money like bitcoin without the need to trust a centralised institution like banks. Now the thing is that every bank and their dog are getting in on the blockchain action under the crusade banner of #fintech. It's a bit like what AOL tried to do with e-mail and messaging in the early days of the internet. AOL tried to own the internet. It's in a way what Facebook is trying to do now with the web. They want to enclose people's experience inside their platform. So much so that many people's experience of the web is Facebook. It remains to be seen how this would play out in the financial sector. Would blockchain finally enable smaller, more nimble and innovative financial services companies or would blockchain cement the big banks' strangehold on finance? What I wrote in the past about creative destruction bears repeating here.
For a civilization to live long and prosper, it needs to continually re-invent itself. This is never easy. It requires deconstruction of the very same accepted truths, structures, and relationships that built and made the civilization prosper in the first place. The incumbents at the top of the existing pecking order will fight tooth and nail to maintain the status quo and their privileged position in it.
Visionaries who give birth to a new world order are outsiders, outliers. They are often demonized as dilettantes, criminals, or pirates. The struggle is often subtle and complex. Incumbents pretend to embrace the emerging world order in a subterfuge to later subvert the new system, neutralize changes detrimental to their interests, so that the new order ends up with the same power structure as before.
Not all deconstruction is creative and beneficial. Some are a step back rather than forward. Sadly, there is no way to see this in advance. What lies at the end of a revolution is a great unknown. At the end of the day, an idea whose time has come is unstoppable. It takes no hostages and brings underlying and festering conflicts to the fore.
The periods of upheaval and transition are most precarious and precious in a civilization's life. They could lead either to the next golden age or sudden death. These periods, more often than not, are ushered in by disruptions brought by leaps in the advancement of technology.
The same goes for an individual within society. Personal deconstruction is always painful and dangerous but is necessary for us to grow.
Most of the significant events in our personal and collective lives are black swans. Black swans are extremely rare, and unpredictable events that have disproportionately large impact. After they happen, most pundits fall prey to cognitive biases and construct ex post simplistic narratives and act as if these black swan events are predictable—which they were not and are not.
Our lives are largely ruled by non-linear randomness which our minds are unwilling to accept. Instead of embracing the beautiful richness of the unknown, most people would rather suffer being confined in the scarcity of the known. Life throws curve balls at us. Painful as they may be, they force us to break out of this confinement.
Science fiction fall either at the extreme end of an inevitable utopia or dystopia. There is a middle ground of technological realism. This middle ground considers technology not as inevitable but inextricably intertwined with ethics and politics in a contested cosmopolitan community of rights. Decisions on what technologies are to be initiated, funded and developed and how these technologies impact the greater community rest on the aggregated choices of everyone as individual moral agents.
The big questions of technology are ethical and moral. This becomes a challenge in an age of growing moral relativism and weakened moral compass of the people. Decisions today spring more from share prices and opinion poll ratings rather than a carefully considered weighing of competing values.