The Future of Exchanging Value Cryptocurrencies and the trust economy 19
‘Disruption’ seemed to become part of the business
It’s best to think of each rapid shift in a punctuated lexicon midway through the 1980s. It was then that
equilibrium in terms of three factors: enablers, drivers digital technology finally reached the point that
and barriers. Enablers are the technologies that spark business best practice could be reconsidered en
rapid change. Drivers are what motivates us to push
masse. In the eighties, Rolls-Royce formalised
through the rapid change. Barriers are the regulations, TotalCare® (the first ‘power by the hour’ service that laws and social mores that prevent the change.
enabled airlines to buy aircraft engine operating
Incremental development of the enabling technologies
hours rather than the engines themselves) which is
happens in the long periods of stability, but the larger credited with being a key enabler of the low-cost
shift is held back by the barriers. Rapid change is
airline industry. The eighties was also when Walmart
triggered when all the enabling technologies are in place invented the data warehouse and used it to provide
and the drivers overcome the resistance from the
consumers with the ‘everyday low prices’ that
barriers, with regulators and laws changed to enable
enabled it to become the largest retailer in the world.
society to capture the value latent in the drivers.
The pace of change now seems to be so rapid
Our financial system runs with very little tolerance for that disruption is somewhere near the top of
change. It sits at the centre of the economy and
every firm’s agenda. Disrupt or be disrupted.
therefore is highly regulated. Experience has shown
that a failing or untrustworthy financial core has knock-Short-term vs. long-term change, and the
on effects that hold the rest of the economy back.
bullwhip effect
We can thank Bill Gates for the aphorism:
Regulators take a justifiably cautious approach to
change, as any negative consequences have the
“We always overestimate the change that will
potential to destroy the savings and retirement plans
occur in the next two years and underestimate the
of many individuals, or broad swathes of government
change that will occur in the next.”10
services used by our more vulnerable citizens. If
FinTech start-ups take market share on either the
As individuals dealing with the current moment,
supply or demand side, the system runs the risk of a
typically we focus on incremental change – the
whiplash effect that could take a year or so to work its slow burn of technological development where
way through, as regulators and consumers react to
each new idea is stacked on top of the previous
market changes and societal preferences.
one. For example, both Apple and Nintendo
experimented with various ideas and technologies
Over-exuberant investment in new technologies can
before arriving at the iPhone and Wii respectively.
also result in a technology-driven over-shoot before
society pulls the technology back into line (or before Progress is rarely so linear. Often there are long
large financial institutions and governments manage to periods of relative calm interrupted by sudden bursts
pull it into existing regulatory frameworks). This can of change. This is cal ed a ‘punctuated equilibrium’ in leave some firms and individuals with nasty hangovers
evolutionary biology theory. While the unpublicised
when they find they have invested in a possible future development of the iPhone involved a long period of
that society has ruled out. We can see this in action with relative calm, its introduction induced a sudden burst the emergence of high-speed algorithmic trading
of change as Apple updated the device in response to
resulting in the flash crash of 2010, a trillion-dollar stock consumer reactions and added significant features
market crash in the United States, which started at
such as the App Store in short order.
2:32pm and lasted for approximately 36 minutes.
