Ba­bies are not Born adults

Forbes - - FACT & COMMENT -

World-chang­ing in­ven­tions rarely ar­rive full-blown, hav­ing to go through any num­ber of it­er­a­tions and shake­outs be­fore their full sig­nif­i­cance be­comes glar­ingly ob­vi­ous to all. Think of the early days of au­tos, when 99.9% of U.S. man­u­fac­tur­ers failed; or the boom in per­sonal com­put­ers in the early 1980s, which was fol­lowed by a mas­sive wave of fail­ures and led some to de­clare that PCs were no more than toys; or the spec­tac­u­lar dot-com bub­ble of the late 1990s, which led to a sen­sa­tional bust that had many sup­pos­edly smart ob­servers con­clud­ing that in­for­ma­tion, re­tail and so­cial web­sites had no fu­ture.

Two things—one his­tor­i­cal, the other cur­rent—re­cently brought all this to mind.

The first was prompted by a doc­u­men­tary (part of The Great War se­ries on YouTube) about Ger­many’s be­lated at­tempt to de­velop a bat­tle­field tank, the A7V, near the end of World War I. Nearly two years be­fore, in 1916, Bri­tain had in­tro­duced the first tanks—a hand­ful—into bat­tle. Ger­man forces pan­icked, never hav­ing seen such mon­sters be­fore. It’s no sur­prise that the Ger­man high com­mand ini­tially went into a frenzy, or­der­ing all-out ef­forts to pro­duce a model of their own, as well as new weapons to neu­tral­ize the ma­chines.

But al­most as sud­denly, these ef­forts were throt­tled. Ger­man mil­i­tarists con­cluded that tanks were vastly over­rated and not worth al­lo­cat­ing a mean­ing­ful amount of scarce re­sources. The Bri­tish and sub­se­quent French tanks were all bark and lit­tle bite, as they were prone to break­ing down; their speeds were snail-like, mak­ing them easy tar­gets for ar­tillery and even in­fantry grenade at­tacks; and they were cum­ber­some, get­ting stuck in trenches. In short, tanks were of lit­tle or no ef­fec­tive bat­tle­field use.

But the learn­ing curve in tech­nol­ogy turns what looks messy and riven with short­com­ings to­day into world-chang­ing en­ti­ties to­mor­row. Al­lied tanks im­proved, as did the tech­niques for pro­duc­ing them en masse. By 1918 Ger­many re­al­ized it had made a cat­a­strophic blunder. Too late. Sadly, Ger­many didn’t make that mistake again.

The sec­ond ex­am­ple is what’s cur­rently un­fold­ing with cryp­tocur­ren­cies. This sec­tor smells of fraud and scams. Bit­coin it­self is way down from its highs. A mas­sive shake­out, with lots of scan­dals, seems im­mi­nent. Gov­ern­ments, barely con­ceal­ing their glee, are crack­ing down and con­jur­ing up reg­u­la­tions to “pro­tect the con­sumer.”

The skep­tics will have a field day. But their crit­i­cism and scoff­ing will miss what’s hap­pen­ing: An en­tirely new world­wide ecosystem is emerg­ing. Ad­vances in blockchain tech­nol­ogy will soon do to the global fi­nan­cial pay­ments sys­tem what the in­ter­net did to tra­di­tional print me­dia. And ad­vances will be made in cre­at­ing easy-touse cryp­tocur­ren­cies that will be gen­uine— and bet­ter—al­ter­na­tives to the govern­ment fiat currencies we have to­day.

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