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  According to Deloitte, the only true mistake organizations can make regarding blockchains is to do nothing.

  The early pioneers are working to take the movement to the next step—and they are actively recruiting an array of gifted minds from a variety of disciplines to join their ranks. While to date the movement has been driven by and focused primarily on technologists, Chris Dixon, a partner at venture capital firm Andreessen Horowitz, has said that we need “to grow the army. We need 10 million people—programmers and researchers and entrepreneurs and product designers and creative people.”9 With this next wave of diverse skill sets, the movement will gain even more power.

  This growing army of brilliant minds is rapidly working through the many hurdles the still-raw technology presents. But even here in its early adolescence, and even if blockchain technology as we know it today is still a work in progress, the decentralization revolution has already begun. Our world has already forever changed.

  European Parliament member and chair of the Science and Technology Options Assessment (STOA) panel Eva Kaili said, “Once I understood it, I saw the possibilities of the technology in basically everything. It removes friction and intermediation anywhere this is a problem. You cannot stop it. You have to understand it, and find a way to work with it.”10 Twenty-eight-year-old Steven McKie, a writer, developer, and founding partner at investment fund Amentum, says, “Some say blockchains are like a religion, others just an impassioned pursuit. But the younger crowd sees a platform for expanded freedoms they never imagined possible. Many projects will fail, but this won’t be failure. The learnings will be reinvested in our ever-evolving education. We are learning how to build distributed, interoperable systems that change human incentives, and can increase global prosperity. Everything can be decentralized, and many of us believe the future of humanity depends on it. This is a battle for our future. And if you change the rules, change the tools, change the culture, you can change society.”11

  A decentralized future may just draw from technology that is yet to be developed. Interest in blockchains has unleashed a flood of exploration in other kinds of technology that also supports decentralization.And the movement will broaden to bring in other disruptive technologies to assist; artificial intelligence (AI), machine learning, and Internet of Things (IoT) are three key technologies that already play a big role. Blockchains have and will continue to stoke renewed interest and advancements in cryptography, which in turn could catalyze new innovation. But whatever the ultimate technical answer, we know already that blockchains are a social movement as much as they are a technology. They offer hope in a way our world is craving.

  Vitalik Buterin, who proposed Ethereum—one of the top projects in blockchain history—before he was even 21 years old, speaks to how this movement goes far beyond technology. “What we are talking about here,” Vitalik writes, “has more to do with reforming underlying patterns of behavior, and especially the incentives, monetary, social, and otherwise, that drive how we interact.”12

  This movement has stoked the passion of a growing contingent of blockchain enthusiasts—developers, policymakers, activists, investors—that, finally, can taste a better future, and can see a path in which they can contribute to building that future. They are motivated by the financial or societal returns of doing so, and often both. And they have gathered fuel in the form of staggering amounts of capital. “Now, whether right or wrong,” says Diana Biggs, Head of Digital Innovation for HSBC Retail Banking and Wealth Management in the UK and Europe, “the financial incentives with blockchains have generated massive interest in the space, and that has brought more momentum to the movement and its focus on digital identity, financial inclusion, transparency, open source, and collaborative systems.”13

  Blockchain pioneers are aided by a technology that is inherently resistant to being constrained. Key ingredients are being baked into blockchains that serve to accelerate social change—decentralization and built-in incentive structures that, at the right moment, are poised to activate and engage communities en masse. Ready or not, like it or not, we are on the brink of a global conflagration that, once it catches fire, has the potential to proliferate at hyper-speed.

  We can’t put out the fire—nor, as you’ll see, do we want to—but we do need to learn about it now, and actively feed and tend it in such a way that it lives up to its promise to make our world better.

  “Nobody knows how this technology will be used,” Maja Vujinovic observes. “We need to keep testing and learning, we need to keep rolling up our sleeves and pushing for pilots—and we need to be very conscious about what we want this technology to do when it reaches maturity.” When people come together to use it for good, she points out, blockchain technology has the potential to propel us leagues forward. “We can’t implement blockchains or any other technology and expect it to solve mass societal ills like poverty or expect it to save the world,” she says. “It doesn’t work that way. But we can do that. We can. If consciousness is present in the design, we can use the technology to advance our world.”14

  Chapter 2. CATCHING FIRE

  You probably don’t smell the smoke, and most certainly aren’t feeling the heat—but it’s coming.

  While the exact path it will take is unclear, blockchains and their related family of technologies hold the potential for significant change, with far-reaching implications, for every industry and every sector. They will not only alter our digital lives—there are early indications that they could influence the very shape of how we work, live, and play. They can change what business and government are capable of. They can change what a single individual is capable of. They will kill old business models and birth altogether new ones.

  Make no mistake: we are at the dawn of a next great wave of disruption.

  As in any time of change, there is a chance for smart thinkers, no matter where they come from, to end up on top when the dust settles. And with this technology, that is the case almost no matter what industry you’re in, or the size or age of your business. Could we see internet incumbents topple? Heritage incumbents pull ahead? Still-young startups flip their business models and drive to dominance? It’s possible. We may not yet even know the names of some of the companies that will be powerful a decade from now.

  As the shift gathers momentum, it is conceivable that every business will need to adjust, whether they use blockchain technology or not. It’s possible that tens or even hundreds of millions of people will be interfacing with a blockchain, whether they are aware of it or not, in a matter of years. Over time, decentralization will most certainly create massive shifts in what customers expect—and demand—from businesses of all types. Businesses that want to survive—and thrive—in this next era will need to be more transparent, more authentic, and more aligned with customers’ needs and desires. This is the very early start of a culture shift, and indications are that it could bring sea change.

  Even if your business never uses blockchain technology, your consumers will expect a relationship with you based on what they have been exposed to elsewhere.

  As with the internet before it, the new things blockchain technology makes possible will, over time, and with broader adoption, influence new consumer behaviors and a new kind of standard expectation. Even if your business never uses blockchain technology, your customers will expect a relationship with you based on what they have been exposed to elsewhere. Businesses will need to re-envision the way they communicate and interact—and for some, even shift an entire business model.

  Luminary John Henry Clippinger has held senior positions in government and large enterprises, founded four software companies, and started new programs and institutes at Harvard and MIT. But most recently he founded a non-profit foundation in Zug, Switzerland, in the blockchain space. “Blockchains unleash a whole new paradigm,” John told me. “Ultimately, the question will become: are you about value extraction, or are you about value generation? This technology will accelerate the opportunity in value gener
ation.

  “For executives,” John continued, “the reflex is to be defensive: ‘How do we inoculate ourselves from this thing? How do we kill it?’ But leaders will see this as the transformative shift it is. They will realign themselves to create value with customers, developing a whole new kind of customer relationship. This is a huge business opportunity, and there is a great business model for this—a model that looks like a virtuous cycle. It’s no longer about a zero-sum game, about what you have I take from you. It’s about jointly creating value together. And it makes economic sense—this is nonrival value. Eventually, everyone will need to compete against that standard. We could see banks go the way of newspapers. And across industries, we will see whole new categories of next generation companies emerge.”15

  Blockchains unleash a new paradigm—it’s now about jointly creating value together.

  John Henry Clippinger

  This transformation will take time. It may be early, but it is not too soon to prepare. In fact, because it fits closely with many prevailing needs, desires, and social shifts of our time, this next wave of disruption may hit us faster than any technology has before.

  Bite While the Apple Is Raw

  Much about “the blockchain space” is still raw. The underlying infrastructure is still being developed. Huge, fundamental challenges have not been addressed, such as scalability and user experience. The utility and adoption of blockchain-driven applications remains painfully low. Corporate pilots are fighting headwinds. There is a dearth of true experts. There are more questions than answers. More theory than use cases in market. Leaders are spending their time on projects that can look like an experiment.

  As with any new technology, there will be sputters and missteps on the way to adoption. Expect many headlines over the next few years pointing out the disconnect between earlier hype and today’s reality. Consultancy Gartner describes this predictable pattern as the “hype cycle,” as shown in Figure 2-1. After inflated expectations (and for blockchains this peak was especially high), there is a “trough of disillusionment” as the technical and human challenges of adoption become more apparent. But over the long arc of time, expectations reflect the maturation of the technology and a productive equilibrium is reached.

  Figure 2-1. The Gartner hype cycle (source: Gartner)

  Every time so much is in flux, it’s tempting to just wait it out, to see what happens. For some, this restraint could be a crucial skill. But it could also be a death knell. The difference is knowledge.

  Many companies missed the importance of the internet or mobile as they evolved from raw, clumsy technology to the key interface of much of our lives today, even just within the last few years. Take a look at a few memorable examples:

  Neither Redbox nor Netflix are even on the radar screen in terms of competition.16

  Blockbuster CEO Jim Keyes, 2008

  The development of mobile phones will follow a similar path to that followed by PCs. Even with the Mac, Apple attracted a lot of attention at first, but they have remained a niche manufacturer. That will be their role in mobile phones as well.17

  Nokia’s Chief Strategy Officer Anssi Vanjoki, 2009

  We do not believe our vendors selling product directly on Amazon is an imminent threat. There is no indication that any of our vendors intend to sell premium athletic product, $100-plus sneakers that we offer, directly via that sort of distribution channel.18

  Footlocker’s CEO and chairman Richard Johnson, 2017

  Those who became today’s dominant players were able to see—and effectively act on—what others missed. They did this by building knowledge early, while the technology was still bitter and raw. They invested in identifying what the tech made newly possible, understanding potential customers’ needs and desires as they evolved, and timing their investment for the moment the market was ready.

  Those who dig into gaining knowledge in blockchains and their related family of technologies now will be the ones who know when to make a move and when to hold back. They’ll understand when to transition from study and experiment to betting the business. They’re the ones who will be able to discern a shift in customer perceptions as it happens, identify which organizations would make good partners and which to steer clear from, and foresee when the market is ready to go mainstream for a particular use case. Knowledge can help you spot when blockchains are overkill, call out competitors’ hype, or identify when an important aspect has not been properly thought through by whomever is leading a project. And perhaps most importantly, knowledge can help you identify areas in which to experiment. It is this—rolling up your sleeves and getting involved in the space—where the most learning will come from.

  And in this space in particular, it is easy to be misled. Eager to make moves and capitalize on the hype, some companies—and even governments—appear to be leaping into blockchain-enabled initiatives without a deep awareness of their long-term implications or a robust understanding of the technology’s capabilities.

  No one knows when blockchain technology will become more widely adopted. Some leading thinkers project an ambitious two to five years; others say it will be decades. Certainly, the pace of innovation will vary significantly by category. But there is no doubt that the global inflow of financial and human capital into blockchain-backed initiatives is astounding.

  Chance, Unchained

  My own entry into the world of blockchains was entirely accidental. Growing up in a Silicon Valley family of engineers, my nerdy style of teenage rebellion was deciding to become a social scientist rather than a technologist, training at Stanford in psychology, sociology, and organizational behavior. But when I finished graduate school I found myself at the dawn of the dot-com boom, and quite suddenly, all around us, hardware and software were working together to make noticeable changes in our lives. While at first these changes were small, it wasn’t hard, even in those early days, to see where it could go. A glimpse at a new social construct was emerging, and it was clear we would need to learn how to manage a new, important relationship—our relationship with technology in an increasingly digital-centric age. I was captivated, and I suddenly found myself back in the world of tech, realizing that it was actually the intersection of social science and technology that was my calling.

  Over the next two decades, I devoted my career to helping tech founders, entrepreneurs, and intrapreneurs drive behavior change and adoption in new markets, and in dynamic environments. I built a consulting business so I could spend my time embedded in a continual river of new innovations, traveling across industries and technologies, never willing to commit to just one.

  All of that changed in a single hour.

  One day, a client came to me with an idea to pivot to “the blockchain space.” I knew very little, and remember crossing my arms in skepticism a few days later as I sat down to grill his lead engineer. I came out dazed: what I heard could change everything. Not just for my client, or his industry, but for my life, and my children’s future, too.

  That afternoon I caught the “brain virus”—an insider term describing how some find blockchains so engaging, such a rabbit hole, that they can’t think about anything else. Overnight, I transformed from a mindful, eight-hours-of-sleep-a-night, family-dinner-insisting, devout meditator and devoted parent, to a woman who did nothing but research blockchains all day, and much of the night. I stopped meditating, barely slept, forgot to pick the kids up from school, and found myself telling them to eat cereal for dinner. While we attempted to find balance at a family camp in the mountains, my son even caught me placing a poster, right next to the rock-climbing signups, for an impromptu blockchain meetup. “Mom,” he told me, “you’ve gone rogue.”

  Opportunity Hidden by Complexity

  The more involved I got in the space, the more I saw how the technology, and the movement behind it, held the seeds of the next shift in our digital culture. It also became clear that there was an extreme gap between what a community of “insiders”—predominantly tech
nologists, investors, and financial services execs—understand about what’s coming and what the rest of the world knows. And the more I learned, the more dangerous I recognized this dearth of knowledge to be. So dangerous, in fact, that I went on hiatus from my work with clients to write this book and help close the gap.

  For the uninitiated, the risk of missing the telltale signs of the decentralization revolution—and both the risk and the opportunity it brings—is immense. But I also believe that what’s coming is so important to get right that we need more minds involved in shaping it. We need more minds prepared to make smart choices about which solutions to support and which to ignore. (And possibly, which to condemn.) We need more minds thinking ahead about how decentralization could reshape organizations and communities. And we need more people lending their voices to influence how this all goes down. The more demographic and skill diversity in this space, the better chance our world has for this redo of foundational systems to be remade, better.

  The first step, of course, is knowledge. At once, blockchains are stunningly elegant and staggeringly complicated. Today the space is dominated by technologists talking primarily to technologists, which is a key reason the learning curve can be arduous and steep. But it’s not just the technology that is complex—it’s the far-reaching implications of how it can change the way we operate, even down to foundational tenets we have long considered a given. This means many different disciplines are colliding to make that change happen, which also makes it hard to follow. As thought leader Jill Carlson has said, “This space is extremely multidisciplinary, cross-cutting math, economics, cryptography, game theory, computer science, financial markets, distributed systems, governance, programming language theory, law, and many other areas. There aren’t many people who can be called subject matter experts in more than one of these areas—and each of these areas has its own jargon.”19