Hello, Blockchain!

Parisa Ahmadi is a young Afghan girl. Being in a patriarchal society, she has no bank account. Yet, she bought her laptop over the internet. How? Through cryptocurrencies.

Unfortunately, such stories rarely make the headlines. Instead, all we read about are the rallies and downward spirals of bitcoin’s price movements. There is so much more to bitcoin and its underlying technology than just price movements.

To dismiss it without digging deeper and going beyond such headlines would be a great disservice to what could be a key element of the next industrial revolution. Blockchain is a ground-breaking technology that can disrupt many traditional sectors such as banking and commerce but also have the potential of integrating millions of people from the emerging markets, like Parisa, into the digital world.

However, being something so totally new and abstract, it is only natural for people to resist or doubt the concept of bitcoin and the blockchain. The concept of a virtual currency is, in fact, alien to many people and shakes their core and fundamental beliefs of what money is. Therefore, people and organisations need to go through a change management process before accepting the concepts and fully internalising the big potential blockchain confers.

One can talk about five stages of change management that everyone needs to go through:

  1. The first stage is shock or disdain and is mainly because of the concepts being so alien.
  2. The second stage is awareness. Everyone currently has most probably an information overload of bitcoin and blockchain, but not necessarily the correct information.
  3. The third stage is understanding. Here people will try to understand the fundamentals of what bitcoin and the blockchain truly are.
  4. The fourth stage is acceptance. When one fully understands the revolutionary concepts of bitcoin and the blockchain, then one accepts the potential they both have of unleashing the next industrial revolution. If you fully accept the ideal, you will get to the final stage of the change curve.
  5. The fifth stage is commitment. This is possibly the hardest part, but once fully internalised, people usually become committed to the idea and concepts.

Given this process, it is the collective responsibility of professionals in the field and government authorities to educate the public at large.

Over the coming weeks, I will be doing just that. Through a set of articles, I will be presenting readers with a few insights and perspectives into the world of bitcoin and the blockchain from an economist’s perspective because ultimately, it’s the economy, stupid.

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JP Fabri is an economist and Managing Director of ARQ Economic & Business Intelligence, a specialised unit that handles blockchain and cryptocurrencies forming part of ARQ Group. He is also a visiting assistant lecturer at the University of Malta.