My buddy, Yancey, is a Bitcoin broker. He’s been arranging deals part-time for several years now. About a year ago, he went full time. He seems to be doing fine.
It’s ironic that the Bitcoin needs a broker. In my opinion, the best thing about Bitcoin, and the underlying blockchain, is the potential to disintermediate transactions. By eliminating middlemen, blockchain systems may deliver two major benefits:
Conceivably, the blockchain can produce a world of frictionless commerce where we no longer need trusted intermediaries. It’s ironic that Yancey serves as an intermediary for a technology that aims to eliminate intermediaries.
This suggests the blockchain has not yet reached its full potential. My question for Yancey: will it ever? I chatted with Yancey for about an hour last week. Here are some of the highlights.
Additionally, the structure of the blockchain itself can help prevent fraud. What’s stored in the blockchain can’t be changed. A bad actor could conceivably add to the blockchain but such additions are easy to identify and trace.
Assume, for a moment, that I’m your manager. I call you into my office one day and say, “You’re doing pretty good work … but you’re going to have to get better at shooting free throws on the basketball court. If you want a promotion this year, you’ll need to make at least 75% of your free throws.”
What would you do? Assuming that you don’t resign on the spot, you would probably get a basketball, go to the free throw line, and start practicing free throws (also known as foul shots). Like most skills, you would probably find that your accuracy improves with practice. You might also hire a coach or watch some training videos, but the bottom line is practice, practice, practice.
Now, let’s change the scenario. I call you into my office and say, “You’re doing pretty good work … but you’re going to have to get better at creating ideas. If you want a promotion this year, you’ll need to increased the number of good ideas you generate by at least 75%.”
Now what? Well … I’d suggest that you start practicing the art of creating good ideas. In fact, I’d suggest that it’s not very different from practicing the art of shooting free throws.
But shooting free throws and creating ideas seem to be very different processes. Here’s how they feel:
The two activities seem very different but, actually, they’re not. In both cases, you’re doing the work. With free throws, you readily recognize what you’re doing. With ideas, you don’t. Free throws happen in your conscious mind, also known as System 2. New ideas, on the other hand, happen below the level of consciousness, in System 1. When System 1 works up an idea, it pops it into System 2 and you become aware of it.
We understand how to practice something in System 2 – we’re aware of our activity. But how do we practice in System 1? How can we practice something that we’re not aware of?
We think of our mind as controlling our body. But, as Amy Cuddy has pointed out, our bodily activities also influence our mental states. If we make ourselves big, we grow more confident. If we smile, our mood brightens.
So how do we use our bodies to teach our brains to have good ideas? First, we need to observe ourselves. What were you doing the last time you had a good idea? I’ve noticed that most of my good ideas pop into my head when I’m out for a walk. When I’m stuck on a difficult problem, I recognize that I need a good idea. I quit what I’m doing and go for a walk. Oftentimes, it works – my System 1 generates an idea and pops it into System 2.
In my critical thinking classes, I ask my students to raise their hands if they have ever in their lives had a good idea. All hands go up. Everybody has the ability to create good ideas. The question is practice.
Then I ask my students what they were doing the last time they had a good idea. The list includes: out for a walk, driving, riding in a car, bus, or train (but not an airplane), taking a shower, drifting off to sleep, and bicycling.
I also ask them what activities don’t generate good ideas. The list includes: when they’re stressed, highly focused, multitasking, overly tired, overly busy, or sitting in meetings.
So how do we practice the art of having good ideas? By doing more of those activities that generate good ideas (and fewer of those that don’t). The most productive activities – like walking – seem to occupy part of our attention while leaving much of our brainpower free to wander somewhat aimlessly. Our bodily activity influences and stimulates our System 1. The result is often a good idea.
Is that perfectly clear? Good. I’m going for a walk.
This fall, in addition to my regular academic courses, I’ll teach three one-day seminars designed for managers and executives.
These seminars draw on my academic courses and are repackaged for professionals who want to think more clearly and persuade more effectively. They also provide continuing education credits under the auspices of the University of Denver’s Center for Professional Development.
If you’re guiding your organization into an uncertain future, you’ll find them helpful. Here are the dates and titles along with links to the registration pages.
I hope to see you in one or more of these seminars. If you’re not in the Denver area, I can also take these on the road. Just let me know of your interest.
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:
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?
I was one of the taller kids in my high school class. I thought – and hoped – that I might use this size advantage to become a star basketball player.
Alas, it was not to be. I had a bad case of what’s often called “white guy’s disease”. Simply put, I couldn’t jump. Though I was over six feet tall, I could barely touch the rim even with my mightiest leap.
Van Jones would call this my fate. In a memorable commencement speech at Loyola New Orleans, Jones distinguished between fate and destiny. He defines fate as “those things that we have no control over” and suggests that the “people who are most miserable in life are the ones who spend their time cursing their fate.” (Click here for the video).
As it happens, the field of design thinking has a similar concept. Dave Evans, a design engineer, calls it the gravity problem. No matter how hard we try, we can’t change gravity. Indeed, we can’t even suspend it temporarily. Wouldn’t it be great to suspend gravity while we’re building a new house and then reinstate it when we move in? Unfortunately, we can’t. Time to move on. (For a podcast featuring Evans, click here).
Gravity is a fact of life. My inability to jump is a fact of my life. Instead of asking, “How can I change my fate?” it’s better to accept it and ask more useful questions. A useful question is one that we can actually do something about. A designer would say that we need to design around the constraints.
As Evans describes it, we’re looking for room to maneuver around the facts that define our products or our lives. I couldn’t jump very high. That’s a design constraint. So I might ask a different question: “How can I make basketball an important part of my life, even though I can’t play very well?” Once I ask the how can I question, I can dream up alternatives. I might become a coach. Or a sportscaster. Or I might decide to take up a sport that doesn’t require jumping.
Van Jones calls this destiny as opposed to fate. We have no control over fate. But we can respond to destiny. As Jones points out, “The world is not going to tell you every day about …” your destiny. We have to live our lives, and respond to our challenges, to discover our destiny.
Whether we call it destiny or design thinking, when we bump up against gravity, we need to change the question. By doing so, we can find an array of alternatives. Once armed with a list of alternatives, we can design a life or a product. Which alternatives fit the constraints? Which ones don’t?
We don’t design a product and then launch it. Rather we design it, then re-design it, then re-design it as we discover new constraints. Similarly, it’s difficult to design a life before we launch it. To overcome fate and discover our destiny, we need to design our lives as we live them.