Some inventions are so profound that their second order effects reshape the very structures of societies.
The term general purpose technologies (GPTs) is used to describe innovations like electricity, the steam engine and the computer. The paradigm shifts made possible by these inventions are often not initially understood, and can take decades to reach mass adoption. But once the genie is out of the bottle, there is no going back to a world without them. Electricity was invented in the 1870s, but electric motors were not adopted in factories until 30 years later. GPTs can also become the bases for new innovations, and their spillover effects can redesign entire economic and social systems.
|General Purpose Technology||Spillover Effects|
|Printing Press||Knowledge economy; Distributing power structures away from state and church|
|Electricity||Power generation; New forms of transportation and trade|
|Computers||Global communications, internet and ecommerce|
Bitcoin is one such general purpose technology. Now in its second decade, it has evolved from cypherpunk roots to become an emergent monetary asset. As a digital free market money with a predetermined supply, the invention of bitcoin will have lasting impacts beyond our time.
The first users of the printing press could not immediately envision how a free press would rearchitect the nature of society. Yet the freedom of information reshaped the power structures of Europe, and distributed power away from the hands of religious leaders and royalty. Just like the printing press denationalized the states monopoly on information, Bitcoin denationalizes the state’s monopoly on money. While the future is difficult to predict in micro events, we can study Bitcoin’s design to identify macro themes that are likely to emerge from its adoption.
Many of the trends mentioned here were seeded by prior events. Bitcoin provides an opt-out at the right place and the right time. In practicality, the…