The real battle for the Internet and the tremendous changes it brings hasn’t even started yet. What we are seeing right now are some precursor skirmishes where the cronies (the copyright industry) of those in power are complaining and getting some breadcrumb favors.
One general rule of technical advancement is that it’s not necessarily the most feature rich variant of a new technology that reaches the tipping point and critical mass, or even the cheapest or most available: rather, it tends to be the easiest to use.
I frequently cite YouTube as an example here. It was not the first site to offer video over the net. Heck, porn had done that for five years when YouTube came around, and techies for ten years. There were at least a dozen common ways to share digitized audio and video online with one another.
History so far tells us that it takes about ten years from conception of a technology, or an application of technology, until somebody hits the magic recipe in how to make that technology easy enough to use that it catches on. And when it does, boy, does it catch on.
It would be rude to not mention Napster in this context. I started swapping files over FidoNet using a 2400-bps modem in 1989. Text, music, images. It was crude, but we were doing it. A new protocol called TCP/IP hit the shelves, and 1995-ish we all switched to that. Big deal, it was still packet switching. In 1999, Napster hit… and suddenly everybody was exchanging music files. DC++ and other follow-suits made sure that we would share anything we wanted.
It took ten years for music sharing to become easy enough to wildfire, courtesy of Napster. It took video sharing ten years to become easy enough to wildfire.
So if you want a crystal ball of the next battle, look at what many techies are doing right now, but that is obscure and hasn’t caught on; something that has a very clear and attractive use case once it becomes easy enough.
Here’s what’s on my radar: banking. There’s at least a dozen different variants of decentralized cryptographic currencies and transaction systems out there, very sophisticated and totally incomprehensible. There’s Ripple, BitCoin, ecash and others.
Just as BitTorrent made the copyright industry obsolete in the blink of an eye, these stand to make banks obsolete. These, or their successor, will hit a tipping point as soon as somebody makes it easy enough to use. The technology is there, the use case is there — there’s certainly no shortage of annoyance with big banking. It’s just a matter of usability now.
When this tipping point happens, there won’t be any central point of control over economies. It will be like everybody traded in cash, traditional anonymous cash, once again. Why, then, will this make governments dump a ton of bricks on the Internet?
Up until now, from the perspective of governments, it’s only been some friends complaining about a sales slump of CDs, so governments have given them some legislative breadcrumbs to shut up. How do you think governments across the world are going to react when they realize they’ve lost the ability to tax the public?
Imagine the ramifications of that for a moment. The governments of the world are on the brink of losing the ability to look into the economy of their citizens. They stand to lose the ability to seize assets, they stand to lose the ability to collect debts. No application of force in the world is going to help: everything is encrypted, and destroying a computer with any amount of police firepower will accomplish zilch.
All the world’s weapons in all the world’s police hands are useless against the public’s ability to keep their cryptographic economy to themselves. Won’t make a scratch.
If you thought the wars over knowledge and culture were intense, I believe we’ll see much more interesting events unfold in the coming decade. The decentralized, uncontrollable economy where one lifetime employment is no longer central to every human being is something I’ve called the swarm economy, and I predict it will redefine society to an immensely larger extent than the ability to get rap music for free.
This is my first article on bitcoin. You may also want to read about why I am putting all of my savings into bitcoin, and my analysis of how it impacts welfare and taxing.