Technology adoption is usually a long, messy process. Jeffrey Tucker captured that beautifully in an article yesterday titled “Five Reasons the Future Isn’t Here Yet.” It offers a profound takeaway: “The future, even if it is known, is not yet now.”
The future, of course, is never known. We love to prognosticate, but it’s impossible to do so without severely glossing over the complexities of the real world. That leads us to false dichotomies, like “Blockchain technology will change everything” versus “Blockchain is all hype.” There’s a lot of daylight between those two extremes, and many factors make it impossible to know with any precision where we’ll land. Here are five reasons why, when it comes to technology, we’ll never know exactly what the future holds.
#1 Free Markets Let Technology Evolve
Imagine two scenarios: In the first, a thousand of the world’s greatest inventors come together, share ideas, debate, and ultimately agree on a single brilliant innovation to bring to market. In the second, these inventors each market their own ideas, which over time succeed and fail, interact with each other, and inspire follow-on ideas.
Which scenario is more likely to add the greatest value to society? My money’s on the second. Markets evolve solutions we could never sit down and come up with in advance. Killer applications using blockchain technology may hinge on a few important inventions, but their benefits will truly materialize when those inventions and many smaller ideas are combined by entrepreneurs in ways yet unforeseen.
#2 The Old Order Never Fully Goes Away
We’ve all heard overreaching claims that because of blockchain technology, we won’t need governments, corporations, banks, or any number of intermediaries that define our economy today. But new technologies, no matter how revolutionary, rarely wipe the slate clean. In fact, part of how technologies become revolutionary is being adopted by the “old order” and changing it from the inside.
I’ve heard people claim that the internet failed to live up to its promise because we still have giant corporations. No matter one’s general view on large corporations, this idea is absurd. The internet gave small retailers global reach, and birthed new giants like Amazon, but that’s only part of the story. It also allowed existing big box retailers like Walmart to become vastly more efficient in their supply chain and logistics, charge lower prices, and greatly benefit consumers. The story would have been cleaner if all giant retailers were swept away, but the technology would be no more revolutionary.
Similarly, people are fond of predicting that cryptocurrency will replace fiat currency or that because it is superior to fiat, governments will prevent it from succeeding. My guess is we’ll end up with something in between, with cryptocurrencies existing alongside the money we use today. If governments see the potential in cryptocurrencies, they won’t shut them down. Rather, they’ll find a way to use them to their advantage.
#3 Regular People Must Gain Comfort With New Ideas
I recently debated a blockchain developer on a panel about how much ordinary consumers need to understand about the technology. I hold that while they don’t need a computer science degree, they do need a basic intuitive story about what it does. It takes time for consumers to get to such a point, and this intuitive understanding may not be an exact match with the use cases originally pictured by developers.
This is a particular challenge for blockchain, as understanding the usefulness of a distributed ledger requires people to think in a bottom-up way that isn’t always how we’re used to processing the world. This understanding will coevolve with the applications, and once again land somewhere that is difficult to predict.
#4 Technology Doesn’t Develop in a Vacuum
Many technologies we use today are the way they are because of seemingly unrelated events unfolding in the wider world. Think about how the Cold War influenced computing technology and nuclear power. A wave of global currency crises could usher in an age of private, decentralized cryptocurrencies, while worldwide power grabs by governments could do the opposite. Such events need not be of geopolitical importance. They can be old technologies, or even accidents of history. This is the concept of path dependence economists frequently discuss.
#5 There Is No Finish Line
Our ex ante stories about what new technologies will do implicitly assume an endpoint that doesn’t exist. Something as old as the automobile is still undergoing evolution, with innovations big and small. And if driverless cars ever become a reality, they’ll likely have path-dependent features from those quaint times when vehicles were operated by humans. Similarly, by the time blockchain technology is or isn’t doing the things we say it’s going to do, there will be new innovations, new foundational technologies, and new bold predictions to make.
Most Events Aren’t Planned
The correct response to all this uncertainty isn’t to stop thinking about what the future will hold. Rather, one should approach those predictions with great humility, and remember that cut-and-dry ideas rarely come to fruition. Decades from now, the story of blockchain technology will likely not be nearly as clean as the predictions we make now, but that won’t diminish its importance. The market always has a way of keeping us on our toes.