I had an insight about the future recently. It’s simple. Some may think it’s obvious. But nonetheless, it finally just really hit me.
The insight is in the title — we are headed towards a future where each individual will be sovereign and empowered. What does this mean? The power dynamics are shifting from the hands of a select few individuals or organizations to the masses. A metaphorical unwinding of a very tightly wound spring. This is already in motion and the spring will continue to unwind. As hard as anyone may try, they will not be able to stop it. Blockchain and the voices for decentralization are just the latest (and possibly final) twist that will bring this to fruition.
As I said, this is already in motion and has been for decades. Some industries have already been upended as a result. Companies that positioned and aligned with this have reaped enormous wealth and are among the most valuable companies on the planet today. But there is still more to unwind, which is not great news for today’s giants, at it will mean ceding their power and respective monopolies. This will however spell enormous opportunity for a new generation of entrepreneurs, investors, creators and producers.
As an example, most newspapers and magazines have been demolished or are shells of their former selves as both content production and distribution became more decentralized (not completely though). Before the advent of blogs, podcasts and social media, the only source of news, opinions, articles were big publishers and news media.
We’ve seen the same thing happen with music and video content. YouTube and social media also democratized content production and distribution. Streaming services like Netflix basically accelerated cord cutting and destroyed Blockbuster by providing a step shift in convenience. Most Gen Z kids probably have no concept of linear programming.
Retail is currently going through a painful transformation. There are two monumental shifts that have occurred. First, Amazon’s maniacal focus on low prices and consumer convenience pulled the rug out under most retailers with physical stores. Second, with sites like Amazon, Alibaba, Shopify, Ebay, anyone can easily setup an online business and transact with millions of potential customers. These sites and services have brought empowerment to individuals in the form of convenience and choice, but more importantly in allowing them to easily participate in the global marketplaces.
Google, Facebook, Amazon, Alibaba, Shopify, Twitter are behemoths today because they executed and aligned themselves perfectly with these changes. However, their very success is our clue to where we are headed.
In the table below, I’ve outlined these shifts across some industries (definitely not an exhaustive list), taking note of where we were, where we are today, and where I see us going (no surprise I see a fully decentralized future).
Decentral 1.0 is not really decentralized in any of the cases above, but I named it such as I see it as the first step towards where we’re going. It’s no accident that the traditional centralized control is starting to loosen up. We are moving from a world of tightly controlled and manipulated marketplaces to open marketplaces without any middlemen. Decentral 1.0 was absolutely necessary and has been hugely liberating, creating a new generation of content producers and service providers. But it was just a step. There’s still a lot of friction, inefficiency (and a host of other issues like trust, privacy, security, etc.) with a few big companies centrally controlling these massive marketplaces, especially given that they don’t actually produce most of the content or services in their respective marketplaces.
There may still be big producers of goods and services (although this notion is also being challenged — discussion for another day). As it gets easier and easier, we will continue to see growth in the enormous tail of individuals and smaller companies producing niche products and services. The key disruption will be in the distribution of said products and services. It isn’t sustainable for these marketplaces to be centrally controlled. The platforms that will support all these markets will be fully decentralized . This is inevitable, just as it was inevitable for Amazon et al to wring power away from the traditional players.
This obviously won’t happen overnight, as we are far from mass adoption at the moment. There’s a lot of work yet to be done and lots of steps within Decentral 2.0. I believe the evolution of use cases is Money (e.g. Bitcoin, Bitcoin Cash)→ Platforms (e.g. Ethereum, Cosmos)→ Decentralized finance (budding area, not sure if any one stands out just yet) → Service Marketplaces → Goods Marketplaces. You can’t build the services and goods marketplaces use cases until you solve money, platform and finance issues. Sure enough, the first use case for blockchain has been money, but we’ve now expanded into all the above use cases and more (although still very early days).
So as I said, it’s a pretty simple premise. I don’t have a crystal ball, but this vision of the future just feels like a natural progression and extension of what’s happened to date. The genie’s out of the bottle and there’s no going back!