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This is a story about how a “frozen” (or stolen) $135 million can force you to rethink how your business will need to operate sooner than you think—and why you need to harness the power of disruption for good.
I believe in miracles. I was raised that way. From my earliest days, I was regaled with stories of saints and angels and water-to-wine happenings. Small wonder I now look for possibilities where others see problems.
But miracles always come with a dark polarity. While priests, nuns and great grandmas were whispering hopeful outcomes in my ear, those promises came with the threat of not believing. Heaven is for the faithful; hell is for the nonbelievers.
When I first read that by the end of this decade, “death will be optional,” I immediately wondered what happens to religion when the threat or promise of an afterlife no longer exists. Short answer: Motivations and behaviors are going to change.
Which brings us to the latest headlines about a cryptocurrency entrepreneur’s passing—taking with him the passcode to unlock C$180 million (about $135 million U.S.) in investor currency—which is now reportedly gone forever. Why? Because apparently, the promise of blockchain is true: It cannot be hacked. It is absolutely trustworthy.
Gerald Cotton, the CEO of a crypto company, reportedly passed away recently while building an orphanage in India. Unfortunately, he was the only person who knew the passcode to access the millions his investors had entrusted in him.
Now, it is possible that this is a scam. There are many who think Gerald Cotton is still alive and simply absconded with the money. While that would be awful, of course, it doesn’t change what we are talking about, which is this: What happens when you can trust a technology absolutely, and people like Mr. Cotton need not be involved?
Or, said differently: What happens when you can no longer leverage your key differentiator and your unique selling proposition—trust in this case?
Just like optional death diminishes the leverage that comes with the promise of heaven or threat of hell, the implications of trust no longer being used for leverage are mind-boggling. (Just as it would be for you if someone eliminated the keystone of your business overnight.)
Trust In Context
Entire industries, employing millions of people, are built on the promise of trust. You can trust your lawyer to keep you from being sued or screwed. You can trust your accountant to keep you from getting fined. You can trust your bank to keep your money safe. You can trust your insurance company to keep its promises.
And poof. Suddenly, you don’t need to trust them anymore to do any of it. Why? Because technology can do it for you.
At least that is the implication of the $135-million gone headline. The promise of blockchain technology, in its simplest form, is it keeps your transactions and data safe. Nobody can screw things up unless you allow them to. (See the reference to Mr. Cotton above.)
Recently, I was speaking to an entrepreneur who is an expert at tracking trends through patent applications. Her theory being that patent apps are like chips on a futures board, and they let you see what companies are planning on doing two to three years out. Guess who she said had the most patent applications around blockchain? I’ll give you a hint: It’s a bank.
In Technology We Trust
So what new powers are now available to entrepreneurs and consumers that trust doesn’t matter? I am not a technology expert, but luckily, I work with some. So I asked our lead technology strategist Joshua Philips what he thought about when he saw the $135-million loss headline. Naturally, he quoted Spider-Man: “With great power comes great responsibility.”
Joshua explained that with blockchain technology, each user gets to:
- be their own bank
- own all their health care records
- get paid for their data
However, each user also has to take care of his or her own private keys.
The issue with the missing money is that the investors treated Cotton like a bank, which robbed them (perhaps literally) of the power that blockchain affords them.
Another lesson here is that there is (at least) a $135-million opportunity for someone to create a simple user experience for custody of blockchain-enabled assets. Since users can now be their own banks, we need a technology that is both tamper-proof and makes it simple for people to manage their assets.
It is easy to see how an entire industry is about to emerge around custody. I just wrote a book about Disruptors called Plan D (Advantage, Feb. 2019). It’s about people who blow stuff up for the good of the whole. For years, our clients at large companies have both feared and coveted the superhero powers that make Disruptors unique. They understand that technology accelerates these abilities. You could say that it makes their business miracles happen faster.
My use of the word “miracle” is neither random nor hyperbolic. Think about how the word phone has changed. First, we just used them to call people. Then we used them to send text messages. Then they became something we used to take pictures and record videos. Now we use phones to pay for goods and services, navigate new cities, hail a ride, and we also use them as a personal encyclopedia.
If you did most of that stuff 20 years ago, it would have been called a miracle.
It’s Time For The Next Miracle
Financial service leaders aren’t the only ones who should be praying right now. Joshua and my team are convinced that some of the next miraculous events will center on the word “wallet.”
We predict this will happen in five phases in which we will:
- Create a “wallet” smart enough to store cryptocurrency easily and safely.
- Keep all of our photos and videos to ourselves instead of leaving them with third parties like Facebook, Instagram, etc.
- Store all of our logins and passwords.
- Own all of our health data and electronic medical records.
- Securely store our identity—driver’s license, passport, social security cards, birth certificates and, much later, possibly even a unique global ID.
This is how we get the transition to Web 3.0.
Some questions to consider:
- Who will build an easy-to-use “wallet” of the future?
- Are we responsible enough to handle that much power?
Perhaps the most important question of all is: What role do our “trusted” experts play in this future? For the Disruptors who figure that out, miracles abound.
February 9, 2019 at 07:12AM
Forbes – Entrepreneurs