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Bitcoin vs. Motorization: Stunning Parallels

When the automobile made its way onto our streets around a hundred years ago, horses and horse-drawn carriages were still an integral part of the streetscape. Year after year, however, one could observe how more and more horses were exchanged for automobiles. If you now look at our finances, then we see many parallels to this process.

Although it was clear in the 1920s that the automobile would prevail over horses, it took a long time to break down reservations, to adapt or create new laws and to set up the necessary infrastructure.

Is Bitcoin Today Where the Automobile Was in 1922?

If we look at blockchain technology or the token economy, we are currently facing the same challenges. There are still many reservations about this structural change. Like the car at the beginning of the 20th century, blockchain technology is often dismissed as a fad. It took a long time before the first authorities and banks agreed to open themselves to the technology. Legislative changes were and are also needed in order to legally enable a purely digital depiction of value. Above all, the necessary infrastructure is still missing.

What asphalted roads were for automobiles a hundred years ago are today, among other things, the token custodians and stock exchange operators who provide the necessary token infrastructure. It is quite possible that this infrastructure will be created very quickly. Every technological achievement has an adaptation dynamic that can lead to rapid spread after a certain threshold of market penetration has been reached.

Mass adoption already in 2025?

When such a threshold is reached is difficult to predict and depends on various factors. Various studies such as the Gartner Hype Cycle or a report by PwC come to the conclusion that the turning point in the establishment of blockchain will be reached around 2025. Then established commercial use cases should have emerged from today’s pilot projects.

The fact that so far only a few people can imagine a comprehensive integration of token infrastructures in the middle of this decade is partly due to human bias – i.e. cognitive distortion. Accordingly, people tend to overestimate short-term development periods and underestimate long-term ones. In concrete terms, this would mean that less will be implemented within the next two years than we might imagine. Conversely, structural changes could occur over a five-year time horizon that we cannot yet imagine. Whether this assumption will also apply to blockchain technology cannot of course be predicted with certainty, even if there are indications of this.

Blockchain success also depends on AI and the Internet of Things

It should not be forgotten that blockchain technology is dependent on the digitization process in general and on specific technologies such as the Internet of Things or artificial intelligence in particular. If the degree of digitization in administration increases, with fewer administrative acts being processed using paper forms, the probability of using blockchain applications also increases at the same time. The bottleneck in development is rarely technological maturity. Much more is already technically possible today than is implemented in practice.

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