Selling your house as easy as sending an email?

Paul Bessems, blockchain consultant, 01-08-2018

Imagine that selling your house would be as easy as sending an email, big chance you would not believe that this will become reality in the near future. But blockchain makes is possible, at least technically. For a blockchain it doesn’t matter what it brings form sender to receiver: an email, a house ownership certificate or a crypto currency.

But a disruptive technology doesn’t work without awareness of a new context (from physical to digital), an aligned organization model and problem to solve. The steam engine was not invented at the beginning of the Industrial Age, but during the Roman period, but that moment there we no real problems to solve with the technology. Technology alone will not but sufficient to solve social problems such as low productivity growth, privacy, power of big tech companies, fakework and fakenews. So not the hype around crypto’s and ICO’s will help us but context and a deep understanding of new technologies and organization models can help people and organizations benefit from it.

What is blockchain?
Internet makes it possible to send a message in a secure way from sender to receiver. But basically every time you send a message, you make a copy. The email you send is in your ‘out-box’ and in the ‘in-box’ of the receiver. We find it okay to copy information when we send hundred carbon copies of an email. But when I, as a sender, have to pay you and your neighbor each twenty euro and a make a photo of a twenty-euro bill and email it to you and your neighbor with the remark: ‘it is payed for’, you probably will say: ‘that is not okay’. We find it not okay to copy money, or more general: values. And the receiver probably also wants to know, whether or not, the sender is the rightful owner of the twenty euro bill. So basically, blockchain adds two import functions to internet that already has secure transport from sender to receiver in its protocol. These two extra functions are: are you the owner of the value you want to send and do you send it only once? A blockchain secures these three important value transaction characteristics.

Blockchain can be regarded as the next phase or an additional layer on the internet: a layer of value and trust. With the internet we can share information without any significant friction. Sending e-mails (bits & bytes) costs almost nothing. With blockchain technology you can transfer values (also bits & bytes) from supply to demand without irrelevant third parties, without any significant transaction costs. This does not just apply to selling and buying a house, but also for other products and services. To bring supply and demand together against the lowest possible costs is not just the essence of organizing work, but also the essence of organizing our economy.

Changing you worldview
Blockchain technology is not that new, but it can be an important step to rethink leadership and the way we organize data, trust, work and economics. If we do it right this time you could say: ‘A small step for technology, one giant leap for mankind’.

The most important but also the most difficult part of digital transformation will be changing your worldview and paradigm on how to organize data, trust, work and economics in a changing environment. Imagine you lived around 1400 and looked at the sky at night, see the moon and stars: you must have been thinking that you were the center of the universe and that everything else was revolving around you. That was our perspective until somebody called Nicolaus Copernicus, thought different, developed a different worldview and said: ‘Those things which I am saying now may be obscure, yet they will be made clearer in their proper place.’ He presented a theory that we are not the center of everything and some decades later Galileo Galilei proved that he was right. So changing your worldview that your company is not the center of doing business or automate processes is essential for data economics and blockchain. Your organization is only a part of a whole.

Also change organization models and behavior
Most people just look at the technical part of digital transformation and not at the organizational. The pace of the digital transformation will continue to accelerate and so do the problems that originate when applying new technologies in old organization models without attempting to change behavior. Most digital strategies don’t reflect how digital is changing management, organization models, and our social economic order.

According to the European Data Market study, the data economy will grow from € 300 billion in 2016 to € 739 billion in 2020 and the working population from 6.16 to 10.43 million. Our world is undergoing a global digital transformation where digital and the physical reality are blurring into a single integrated modern way of living. This new world not only needs new economics thinking and technologies such as blockchain, but especially needs new organizational thinking and models to organize supply and demand of data.

A new organization model that not only makes company processes more efficient but also improves the purpose of work and the productivity of information workers, a model that enhances data sovereignty, individual privacy and security and makes us less depending on Silicon Valley. A model that addresses problems like fake news and propaganda for instances. We migrate from an industrial society to a data society. But the systems with which we organize data supply and demand have changed barely.

Successful organizations that are fit for the digital future will be organizations with low digital transaction costs. Firms will become more and more part of shared information and transaction networks for supply and demand of data.  If we don’t want digital dictatorship we should be wise, think differently and transform our way of doing business fundamentally. Not the tools, we as humans invented should be in charge or the center, but we as humans ourselves.

Internet only replaced the letter with email?
When internet started nobody could imagine, that it once would be possible to operate Spotify on internet.  As Halfdan Mahler, former director World Health Organisation once said: “What sounds idealistic today becomes realistic tomorrow”. But from ‘today’ to ‘tomorrow’ is a long and difficult road where leadership and management can play an important role. It is important that they take time to understand data (economics and logistics) and blockchain: what is it, why is it important and what can you do with it (and what not)?

So leadership is a key stakeholder in blockchain and the bigger picture that is digital transformation. Will they act pro- or reactive? Will they be ambassadors or resistors of change? Will they give up some autonomy and believe in decentral decision making? One thing is clear: leadership and management must innovate more fundamentally then they did till now, especially in organization models. You could say that the real challenge is solving societal problems and the reinvention of an outdated organization model combined with traditional leadership. Technology is not the problem.

In the short course: How Blockchain Can Help us Take Control of our own Data’, you do not only learn about this new blockchain technology but also and especially how to use it to solve real problems. This course gives you the opportunity to share ideas, knowledge and projects on how digital transformation, in the first place, could be usefull for us the people.

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