Going beyond the headlines of bitcoin

Allow me to introduce you to Parisa Ahmadi, an Afghan girl who managed to buy a laptop thanks to bitcoin. Without bitcoin, this would have been impossible. In a patriarchal society like Afghanistan, women do not have access to bank accounts. Parisa, who was working as a blogger for an American arts group by was paid in bitcoins in her electronic wallet giving her access to her own finances. The company then opened an e-commerce site that would allow Parisa and more than three hundred thousand other bloggers in emerging markets, to buy goods using the bitcoins earned. To Parisa, bitcoin gave her monetary freedom and independence which was a mere dream before the advent of bitcoin.

Unfortunately, such stories rarely make the headlines. Instead, all we read about are the rallies and downward spirals of bitcoin’s price movements with the bubble word often coming to play. There is so much more to bitcoin and its underlying technology than just price movements. To dismiss it without digging deeper and going beyond such headlines would be a great disservice to what could be a key element of the fifth industrial revolution. Bitcoin and blockchain are ground-breaking technologies that can disrupt many traditional sectors such as banking and commerce but also have the potential of integrating millions of people from the emerging markets, like Parisa, into the digital world.

However, being something so totally new and abstract it is only natural for people to resist or doubt the concept of bitcoin and the blockchain. The concept of a virtual currency is in fact alien to many people and shakes their core and fundamental beliefs of what money is. Therefore, people and organisations need to go through a change management process before accepting the concepts. One can talk of five stages of change management that everyone needs to go through. The first stage is shock or disdain and is mainly because of the concepts being so alien. The second stage is awareness. Everyone currently has most probably an information overload of bitcoin and blockchain, but not necessarily the correct information. This awareness triggers curiosity and people move to the third stage, understanding. Here people will try to understand the fundamentals of what bitcoin and the blockchain truly are. Once this information is processed and internalised, people usually move to the fourth stage: acceptance. When one fully understands the revolutionary concepts of bitcoin and the blockchain, then one accepts the potential they both have of unleashing the fifth industrial revolution. If you fully accept the ideal, you will get to the final stage of the change curve which is commitment. This is possibly the hardest part but once fully internalised, people usually become committed to the idea and concepts.

Given this process it is the collective responsibility of professionals in the field and government authorities to educate the public at large. It is our responsibility to present the key definitions of the main terms; context in which the blockchain and bitcoin were launched; the evolution of money itself and the financial system; what is blockchain and what makes it trustworthy and a number of other important issues which will make this black-box more understandable for everyone.

Over the coming weeks, I will be doing just that. Through a set of articles, I will be presenting readers with a few insights into the world of bitcoin and the blockchain with the hope of making it more understandable and of making more people embrace the positive effects of the technology breakthrough.

JP Fabri is the Managing Director of ARQ Economic & Business Intelligence, a specialised unit forming part of ARQ Group (www.arqgroup.com)