Every time a new major technology is introduced to the society, at first it is bound to use the outdated infrastructure which was intended for something else. This creates conflict, a pressure that can lead to an infrastructure inversion.
Infrastructure for the horses
When automobiles were first introduced, it didn’t immediately catch on. People were used to horses as it was a reliable mode of transport for hundreds of years. Long story short, this new technology was met with resistance. However, the major problem for the new technology was the lack of sufficient infrastructure.
Paved roads are actually a very recent development. In the beginning of XX century, the roads were designed for horses. The early cars were often stuck in mud or broke down easily because of unpaved, bumpy roads. And people laughed at cars, as they saw that it was unreliable and expensive. Lack of gas stations was also a major factor at first.
All these changed in time. Roads became paved and cars became the main mode of transport. It’s also worth mentioning that this new infrastructure – paved roads, were much easier to use for horses as well. Automobiles became popular because people wouldn’t give up on it.
This is an example of infrastructure inversion – new technology used an outdated infrastructure until the disruption and pressure were sufficient for the development of a new one. The new infrastructure not only made the new technology truly usable but also improved the performance of the old one.
Infrastructure for human voices
Does anyone remember the noise of a dial-up modem? Young people might not remember them, but many still do. This is another example of a new technology – the internet – using an old infrastructure – the phone lines.
The telephone lines were designed to carry human voices. The human voice is very specific – around 1 kilohertz. Because of difficulties of transmitting voices over great distances, the engineers narrowed the acceptable range. If you allow the full range, you get static and electrical noises.
This compressed road is a very difficult road for the internet because a lot of data is being transmitted on a very narrow pass. The noises dial-up modems made were actually two modems testing available frequency range. This is a crazy way to transmit data.
The phone companies actually hated the internet at first. They were saying that their lines were not equipped for it. They also saw it as a competition for their main operation – phone calls.
However, in a very short period of time, the internet became insanely popular. Everyone wanted it more than they wanted phones. So the phone companies became internet providers and the backbone of their operations became data-oriented. Then, their network became digital. Now, every phone call is carried over the internet, not the other way around. This is one of the biggest infrastructure inversion in the history of the world.
Banking to Bitcoin
Today we have Bitcoin, a decentralized platform we can use for money transactions without intermediaries. However, much like the internet, it is forced to use an outdated infrastructure – the present-day financial system. We’re riding the automobile along the muddy roads of banking. It’s a bumpy road. We have to use exchanged tied to old banking systems.
Just like muddy roads for automobiles, and phone lines for the internet, the banking system slows down Bitcoin.
It is very likely that in 15-20 years, we’ll see another great infrastructure inversion in finance. The routine will be the same. The banks will resist. The banks will adapt. And finally, the banks will be running all the traditional operations on top of a decentralized trusted ledger. This will make the traditional banking more comfortable and effective. At the same time, it will open up a door for many other applications.
What we’re part of now is the first stages of the greatest infrastructure inversion the world has ever seen.
Source : https://blog.bitforx.com
Topic: [2018-04-17] Infrastructure Inversion (Read 99 times)
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