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Bitcoin, Blockchain, and Five Years

What’s next?

I first wrote about Bitcoin on this website five years ago today. (Click here). I decided not to buy any at the time because the price had surged to well over one hundred dollars! Clearly it was a bubble. If only I had known that the price would peak at $18,000 a few years later. (Today, the price is about $6,800).

So what’s happened over the past five years? Let’s look at Bitcoin’s benefits and then investigate some of the ways that it has changed our world.

Bitcoin is based on a blockchain stored in multiple locations. This gives it two major advantages: it can’t be erased and can’t be tampered with. Simply put, it’s like writing checks in ink rather than in pencil, using paper that can’t be destroyed. A blockchain can record transactions and ensure that they will always be available as a matter of public record. Bitcoin uses this feature to buy and sell things. Each transaction is recorded forever, meaning that you can’t spend the same Bitcoin more than once.

Bitcoins can also reduce inflation because they can’t be printed at a government’s whim. Instead, they’re “mined” through complex mathematical calculations. The process gradually grows the supply of coins. The money supply grows in predictable ways. This appeals to anyone who worries that governments will artificially inflate their national currencies.

Bitcoin is also anonymous – just like cash. Unlike cash, however, it’s not physical. It can easily be moved around the world as electronic blips. That makes transactions convenient and inexpensive and could conceivably cut out banks as middlemen. This makes Bitcoin attractive to many groups, especially criminals.

So, what’s happened? First, the idea of the blockchain has spread. There’s no reason to limit the blockchain to currency transactions. We can store anything in blockchain and ensure that it never disappears. In other words, we believe that it is more trustworthy than government or financial entities.

As Tim Wu writes, we are undergoing, “… a monumental transfer of social trust: away from human institutions backed by governments and to systems reliant on well-tested computer code.” Wu notes that we already trust computers to fly airplanes, assist in surgery, and guide us to our destination. Why not financial systems as well? A well-organized cryptocurrency could become the de facto standard global currency and eliminate the need for many banking services.

But we don’t need to limit the blockchain to financial transactions. Any record that must be inviolate can potentially benefit from blockchain technology. Some examples:

  • The Peruvian economist, Hernando de Soto, has suggested that we can combat poverty by storing land ownership records in blockchain systems. Land ownership disputes in Latin America can last for centuries. Blockchain could simplify the process and ensure that those who hold title to land can’t be cheated out of it.
  • De Soto’s proposal eliminates the government as the arbiter of land titles. This is part of a broader trend to disintermediate governments. Why should governments be information czars? Better to store our records in blockchain. This could include land titles, personal identification, health records (including our DNA), the provenance of art works, stock ownership, international fund transfers, and self-enforcing contracts.
  • Tim Wu suggests that we’re moving our trust from governments to code. But we’re only part way there. In our first step away from governments, we put our trust in giant Internet companies like Facebook and Google. We’re now discovering that these entities are no more trustworthy than governments. Indeed, they may be less trustworthy. What’s the next step? Many suggest that it’s the blockchain.
  • Meanwhile, afraid of being disintermediated, governments are starting to plan cryptocurrencies of their own. Russia has proposed a digital currency with several former soviet socialist republics. Sweden and China are both interested in there own cryptocurrencies and have established sturdy groups. But the first government out of the gate seems to be Venezuela, driven by a financial crisis. Venezuela’s printed currency, the Bolívar, suffers from inflation rates around 4,000%. So the government has just announced a new cryptocurrency called the Petro, based on the nation’s oil revenues. The government is essentially saying, “We’re incompetent to print paper money but you can trust the Petro because it’s based on code, not a bumbling bureaucracy. We humans can’t interfere with it.” Will it work? Stay tuned.

Of course, we can also use blockchains for less noble pursuits. The blockchain can store any information, including pornography. That’s a problem but it’s the same problem that was faced by myriad new technologies, including VCRs and the Internet itself. Criminals can also use cryptocurrencies for ransomware attacks, and to traffic in contraband or avoid taxes. We can ameliorate these problems but we probably can’t eliminate them. Still, the advantages of the technology seem much greater than the disadvantages.

So … what happens over the next five years? The New York Times reports that venture capitalists poured more than half a billion dollars into blockchain projects in the first three months of this year. So, I expect we’ll see a shakeout at the platform level over the next five years. Today, there are many ways to implement blockchain. It reminds me of the personal computing market in, say, 1985 – too many vendors selling too many technologies through too many channels. I expect the market will consolidate around two or perhaps three major platforms. Who will win? Perhaps IBM. Perhaps R3. Perhaps Ethereum. Perhaps Multichain. Rather than buying Bitcoin, I’d suggest that you study the platforms and place your bets accordingly.

In the meantime, we need to ask ourselves a simple question: Are we really willing to forego our trust in traditional institutions and put it all into computer code?

Don’t Argue In The Past Tense

Why would I want her to be annoyed?

Let’s say that Suellen and I have an argument and I notice that all the verbs are in the past tense. According to Aristotle, the verbs tell us that the argument is about blame. I may think it’s about who left the door unlocked or forgot to pay the mortgage. But it’s really about blame.

Let’s also say that I win that argument. (This is very hypothetical). I’ve successfully pushed the blame away from myself and on to her. It’s not easy to win an argument, so I do a little victory dance. Meanwhile, how does Suellen feel? Probably a mixture of emotions – irritation, annoyance, anger, … perhaps even a desire to get even. Suellen is the woman I love. Why on earth would I want her to feel like that? That’s the problem with arguing in the past tense. Even if you win, you lose.

Arguing in the past tense is generally known as forensic rhetoric. In many legal situations, we do want to lay blame. We want to establish guilt and make sure that the appropriate person is appropriately punished. Most of the testimony in a trial is in the past tense. Similarly, characters in crime dramas speak almost exclusively in the past tense. The goal is to lay blame and Aristotle and others give us rules for how to argue the point.

Outside of the courtroom, however, arguing in the past tense is essentially useless. We can’t do anything about the past. We can’t change it. We can’t enhance it. We can lay blame but, even then, we will argue endlessly about whether we got it right or not. Did we blame the right person? If so, did we blame them for the right reasons? Did we learn the right lessons? Did history teach us anything? Or did it teach us nothing?

The next time you’re in an argument, notice the verbs. If they’re in the past tense, you’re simply trying to blame the other person. Does it do any good to “win” such an argument? Nope. By “winning”, you just give the other side motivation to come back stronger next time. This is how feuds get started. The Stoic philosopher, Epictetus, had it right: “Small-minded people blame others. Average people blame themselves. The wise see all blame as foolishness.”

Segmenting The Body Politic

Where do you stand?

As a marketing executive, I’m accustomed to the process of segmenting markets. My software companies divided markets by company size, SIC code, geography, and installed software. By doing so, we could identify and communicate with companies that were most likely to buy our products and services.

The Pew Research Center has done something similar with America’s body politic. Rather than two major political parties, Pew identifies eight different clusters of political thought and action: four for the Left and four for the Right. Let’s take a look at each. (Click here for the complete report and here for a Q&A on the methodology).

Among Conservatives

Core Conservatives support traditional Republican positions including smaller government and lower taxes. They also believe that the nation’s economic system is fundamentally fair. Core Conservatives generally support globalization, believing that the global economy creates opportunities for American businesses. This segment accounts for approximately 31% of all Republicans and roughly 13% of the American body politic.

Country First Conservatives are deeply concerned about immigration and generally believe that America should withdraw from the world. They strongly believe that the global economy is deeply threatening to American interests. More than any other segment, Country First Conservatives agree with the statement “If America is too open to people from all over the world, we risk losing our identity as a nation.” This segment accounts for 14% of Republicans and 6% of the American public.

Market Skeptic Republicans share many conservative values but are losing faith in the American economic system. They believe the economy unfairly favors powerful interests and are skeptical of banks and other financial institutions. More than any other group, the disagree with the statement “The U.S. economic system is generally fair to most Americans.” This segment accounts for 22% of Republicans and roughly 12% percent of the American public.

New Era Enterprisers form the most optimistic segment of either the Right or the Left. More than any other group they believe that the next generation of Americans will be better off than the current generation. New Era Enterprisers strongly support business and generally believe that immigrants strengthen the country. This segment makes up 17% of Republicans and 11% of the general public.

Adding it up (with some rounding errors), the four Conservative segments account for approximately 42% of the American body politic.

Among Liberals

Solid Liberals have liberal attitudes across the board. They overwhelmingly support government involvement in health insurance and government activism to ensure that blacks have equal rights with whites. They support government regulation of business and don’t believe one needs to be religious to be moral. Solid Liberals account for 16% of the general public 33% of Democrats.

Opportunity Democrats agree on many policy issues with Solid Liberals. They’re more likely, however, to be pro-business and to believe that most people can get ahead if they work hard. They comprise 12% of the general public and roughly 20% of Democrats.

Disaffected Democrats are positive about the Democratic Party but cynical about government in general. This is one of two minority-majority segments. They support activist government programs and believe that we should focus less on problems abroad and more on domestic issues. Disaffected Democrats account for 14% of the general public and 23% of Democrats.

Devout and Diverse is the second minority-majority segment. Like Disaffected Democrats, they face financial hardships. Among all the groups, this segment is the least politically engaged. They resist government regulation and strongly believe that one needs to believe in God to be moral. The Devout and Diverse account for 9% of the public and 11% of Democrats.

Adding it up, the four Liberal segments account for roughly 51% of the American body politic.

So if Conservatives account for 42% and Liberals for 51% of the general public, where are the rest of our voters? According to Pew, roughly 8% of the general public are Bystanders, described as a “relatively young, largely minority group” that is “missing in action politically”.

So where do you stand? Thanks to the Pew Research Center, you can now find out. Pew has published the Political Typology Quiz. Click here, answer a series of questions, and you can figure out which group most closely represents your worldview. I’ll be writing more about this in the future. You may want to know which group you’re in to follow along.


Finding A Balance In A Partisan World

Burst Your Bubble

In my Persuasion class, I teach that the best way to disagree is to begin by agreeing. By acknowledging common ground – or common objectives – we show that we respect the other side, even if we disagree. This helps us build trust, which ultimately is the basis of all persuasion.

In today’s world of hyper-partisanship and angry denunciations, how do we begin by agreeing? How do we find points of common interest? The simple answer is that we begin by understanding the other side’s perspective. We read articles and authors that we disagree with. (This may be good for our mental health a well as our political wellbeing).

But trolls are everywhere – on both the left and the right. How do we find conscientious authors and sources that can help us understand a worldview and not just an angry index of insults? Here are some resources: – this website has two CEO’s – a West Virginia Republican and a California Democrat. They aim to “understand each other’s point of view without compromising their own values.” The organization seems small but promising and has already recruited ambassadors in 22 countries. You might want to apply. – where relies on ambassadors, focuses more on artificial intelligence and media analytics. They aim to “analyze the public sphere” and “give voice to the common ground”. Though small, they partner with MIT’s Media Lab and are backed by Reid Hoffman, the founder of LinkedIn, so they may have some staying power.

Renewing The Center – a service of the Tony Blair Institute for Global Change, this service publishes a newsletter that seeks to explain why traditional left/right distinctions matter less than they used to.

The Guardian/Burst Your Bubble – this English newspaper tilts to the left but publishes a “Burst Your Bubble” feature every week. The editors select interesting conservative articles and videos – usually about a given topic – succinctly summarize the key ideas and explain why you should read them. For recent examples, click here and here.

New York Times/Right and Left – similar to Burst Your Bubble (but not as pithy), The New York Times regularly surveys how authors on the left and right treat a given topic. For recent examples, click here and here.

These five sources provide a pretty good starting point for finding a balance in a partisan world. But I hope that there are more. If you know of others, please let me know and I’ll update the list.

Keenagers — The New Demographic

We’re not old. We’re keenagers.

When Elliot was 12 years old, he and some buddies were racing around our house. I said, “Hey kids, lighten up a little bit.” Elliot looked at me sternly and said, “Dad, we’re not kids. We’re pre-teens!”

Elliot wanted a demographic of his own. He didn’t want to be a “kid” anymore. At the opposite end of the age spectrum, I now feel a similar need.

I now belong to a well established demographic defined as “over 65 and retired”. In other words, I’m old.

The odd thing is I don’t feel old, at least not in the traditional sense. I remember my grandfather. He had false teeth, an uncertain gait, and complained of myriad aches and pains. When he died, people said he died of old age. I’m not old like that – at least not yet.

So I want my own demographic. Yes, I’m over 65 and yes, I’m semi-retired. But I still teach part-time, run a website, and tend to my clients. I raise money for good causes. I study issues and have opinions. I serve on boards. I write letters to the editor. I’m not (yet) an old guy sitting on a park bench watching the world go by.

I also spend money. My wife and I have a nest egg and some purchasing power. We should be of interest to marketers who have interesting things or services to sell. But it would be easy for a marketer to overlook us. We could easily be mistaken for regular old “old” people.

So, let’s segment the market and create a new demographic. But what should we call it? The question came to a head for me when I read a recent editorial in The Economist called “Over 65 Shades Of Grey”. The article notes that “Branding an age category might sound like a frivolous exercise. But life stages are primarily social constructs, and history shows that their emergence can trigger deep changes in attitudes. … Declaring a new stage of life could help change perceptions.”

To remind marketers and analysts that we exist – and that we’re not doddering, dependent drains on society – we need a name. The Economist suggests a few non-starters like “geriactives” and “pre-tirees.” Sorry, but those just don’t work for me.

So, I hereby propose that we name our demographic the keenagers. Like teenagers, we’re a well-defined group with many common interests. We’re keen to learn, travel, advise, engage, and spend. We’re even keen to work every now and then. We’re keen to do, not just observe.

What are the advantages of establishing keenagers as a separate demographic? First, we can change perceptions. We’re not old in the traditional sense and don’t need to be treated as such. Second, marketers can develop and refine products and services that meet our needs more effectively. Third, forecasters can fine-tune their data make better predictions about us and about society as a whole.

Perhaps the ultimate advantage is that the label gives us keenagers a convenient and non-derogatory way to refer to ourselves. We belong to an attractive and interesting cohort. We’re not old. We’re keenagers.

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