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Blockchain and a Brief History of Industrial Revolutions for the ICO Investor

Blockchain and a Brief History of Industrial Revolutions for the ICO Investor
Written by Jon Gulson @jongulson
Posted 10 July 2017
Blockchain is often referred to as the fourth industrial revolution, or as a symbol for such. This blog provides a brief overview as to what is meant by industrialisation? What were the previous three revolutions? And why this should matter to today’s ICO (Initial Coin Offering) investor.

What is Meant by Industrialisation?

Industrialisation is a broad process and culmination of science and technology bringing forward the future through innovation, time and labour saving invention. It refers to how energy is expended in economic groups and in society.

A Chronology of Industrial Revolutions

  • The First Industrial Revolution: (c 1760 – 1820) advances in steam power and manufacturing saw a transition from rural and agrarian societies toward urban centres and the factory system. This began an era of per capita economic growth in developed countries.
  • The Second Industrial Revolution: (c 1820 – 1940) the beginning of electrification, the internal combustion engine, development of telecommunication systems, petroleum and mass production.
  • The Third Industrial Revolution: (c 1940 – 2008) developments in technology, the computer, internet, self-publishing and sophisticated communication devices.
  • The Fourth Industrial Revolution: (c 2008 – present) advent of digital cash, blockchain technology, ICO's, smart contracts, cryptocurrency, artificial intelligence.

What Makes Revolutions?

Through these periods, capital has generally become increasingly productive. From the opening moments of the first industrialisation cycle, it liberated many from feudal lives on the land.

This gradually resulted in increased living standards for each generation; materialising in increased life expectancy, increased wealth, increased social mobility, increased consumer and lifestyle choices, connectivity and self-awareness.

During these transformations, trusted fiduciary systems developed to provide liquidity, equity and a greater degree of fairness which encouraged social cohesion and gradual progress.

Of course, it has not all been plain sailing. Conflicts and war broke out between opposing factions, countries and economic depressions occurred; but by the early part of the twenty first century, peace and prosperity has become more prevalent than at any other time through history.

Why does this Matter?

The answer is the fourth industrial revolution has recently existed in a productivity paradox: for all the advances made, we are now producing less (as a function of output to hours worked) with growth suffering as a result and subsequent generations not so wealthy as those previously (for the first time ever).

And despite sophisticated forms of liquidity the legacy institutions created, the real return on money has never been lower; all a result of financialisation - to the extent money no longer represents a function of time.

This is creating wealth disparity, which also means growth investors considering proportionately greater risks to achieve returns. As a result, some economists are claiming a decline in the middle class.

This is why the growth investor should be interested in blockchain opportunity: it is challenging orthodoxy by working from a different basis to traditional money creation.

It does this firstly by distributing value across a consensus network; secondly, by incentivising innovation without the regulatory requirements of a centralised system. This is done by blockchain technology removing the middleman.

All this explains why the ICO and crowdsale sector is attracting so much attention and interest: it is delivering growth and returns that are difficult to achieve elsewhere.

Already the cryptocurrency sector has a market capitalisation of c. $100bn, compared to a total c. $90 trillion of all money (broad money) in supply globally. 

If disintermediation is the catalyst and creator of natural growth, then the blockchain paradigm is still very much in its infancy and undervalued.

Written by Jon Gulson @jongulson
Posted 10 July 2017
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