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The next stage of the digital revolution

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Radical change tends to be met with a strange mixture of excitement, uncertainty, and fear. It destroys structures, leaving only the most durable intact, and is followed by a long process of learning how to repopulate a landscape that has become unfamiliar to a bygone era.

Including Cartwright’s loom, Edison’s electric lightning bolt, Benz’s horseless carriage, and a host of other inventions, two industrial revolutions have already taken the world by storm, upended economic systems, and left new worlds in their wake.

Now we are in the middle of a the digital revolution. With ubiquitous networking, artificial intelligence (AI) and advanced robotics moving forward, we are entering another unknown world with self-driving cars, drones, machines that can translate multiple languages ​​instantly, and mobile technology that dissolves distance.

Evolution of revolution

The digital revolution unfolds through a series of overlapping phases.

Phase 1: The Birth of the Internet

The first phase, from 1985 to 2000, saw the birth of the commercialized Internet: from a niche concept, it quickly evolved into the ubiquitous technology we know today.

During this phase, vast amounts of information suddenly became within reach in terms of cost and speed. This has pushed companies to new frontiers of competition and forced them to make difficult choices about which parts of their business to abandon and which to protect.

Think back to the days when Microsoft started giving out Encarta CDs to drive PC sales, unwittingly destroying the Britannica Encyclopaedia business model.

Phase 2: Rapid Expansion

The second phase, which began in the 1990s and continues to the present, included the creation of search engines, social networks, and mobile applications.

At this stage, large corporations began to feel the forces of destruction more intensely, as small web businesses and self-organized communities began to surpass them in their ability to grow and collaborate without geographical limitations.

In this context, think of Wikipedia’s sharing economy, IBM’s open source challenge to Microsoft’s dominance of server software, Apple and Google taking on the role of curator for disparate app developers, or Facebook disrupting the marketing industry by transforming billions of “friends” in advertisers, merchandisers and customers.

Phase 3: Mass Integration

The first two phases revolved around the Internet as an industry in its own right, changing the way we gather information, use media, and communicate.

The next phase, however, must go far beyond the Internet, touch deeply traditional industries, and blur the lines between the physical and the virtual.

With the total stock of data doubling every two years and the number of IP-enabled devices predicted to exceed 50 billion by 2020, we have already reached the point where more than half of the world’s data is technically a single document from which information can be extracted that was unseen before.

Data scientists talk about releasing more data for machine analysis and action in an encouraging way. They see it as a way to unlock innovation and material progress the likes of which we have never seen in human history.

For others the increasing centrality of data is of great concern because it makes us vulnerable to manipulation and instead of making us a species, it can make us irrelevant.

While we may not know exactly what the end result of such enhanced connectivity and analytics will look like, we can nevertheless take a look at some of them the main one characteristics:

  • Hyperscale

  • Superpersonal

  • Multi-layered architecture

Hyperscale and hyperpersonal

Our physical and digital life worlds are in the process of blending, further blurring the lines in how we communicate, communicate, pay, cook, learn, shop, travel, navigate, work or date.

On the one hand, we see the integration of the physical into the digital with the Internet of Things (IoT). It refers to a network of devices, vehicles, appliances, and other objects connected through sensors, electronics, actuators, and software that enable them to connect, collect, and share data.

Think of cars equipped with sensors to improve road safety, doctors that can monitor and diagnose patients remotely in real time, or cameras that can detect what products we put in the shopping cart and automatically charge us.

On the other hand, data storage is getting cheaper and cheaper, on purpose wastes storage enabled the creation of something entirely new that allows the digital to take on physical properties: the blockchain.

Being a distributed ledger, blockchain provides information protection by periodically storing blocks of data on multiple computers that are anonymous to each other. Thus, it is able to give data incorruptibility, uniqueness and continuity.

Take Bitcoin for example, while universal acceptance is still a long way off, nevertheless, it is important because it is mined as a unique asset, recorded in such a way that it cannot be duplicated, and that, despite its variability, it is imbued with real value.

While such integrative and interconnected processes are expanding our lifeworld to the point where it is all-encompassing, at the same time AI is expanding its ability to decipher and act on data at ever-increasing speeds.

This process effectively breaks this hyper-scale lifeworld into billions of pieces so that it is presented to each person in an individualized manner.

In its simplest form, we already see AI at work on Netflix, Google, and Facebook, where user history, location, and other behavioral features create a personalized feed.

The time has come when every single person and object of interest is connected to every other. The digital and the physical will overlap on a 1:1 scale, turning the world into a self-describing and self-interpreting entity: a hyper-scale lifeworld that is simultaneously hyper-personal.

Towards a multi-layered architecture

In the country of business, because of fame software-based organizationswe are moving from pyramidal structures of vertical competition, where businesses compete for dominance at the top, to an architecture characterized by horizontal friction.

In some ways, this layered architecture is more like a natural ecosystem, where the lower layers include the layers above them, which in turn empower the layers above them, and so on.

rootbranded-stacked-architecture-business

Basic infrastructure

On the base, we find deep infrastructure developers, providing open access. Their value lies in efficiency, scalability and capability.

In the context of blockchain technology, for example, we can see infrastructure organizations such as Ethereum, EOS and Graphene.

Hybrid platforms

Built on top of these underlying infrastructures, we find curatorial platforms that set the rules of exchange and provide limited infrastructure of their own.

These platforms form a hybrid connection point between the stacks below and the stacks above: they derive their capabilities from the infrastructure they are built on, and their legitimacy and value from the communities they host.

For example, Ethereum-based platforms such as Akasha, a decentralized social network similar to Medium, and Civic which serves the community of newsrooms, journalists and readers.

Besides Graphene, we find companies like Steemit, which is similar to Akasha, and Sparka money transfer platform that enables communities of money transfer operators, agencies and migrants to transfer money at high speed and low fees.

Communities

At the very top, thanks to the platforms that host them, we can find communities of professionals, entrepreneurs and users who focus their interaction around specific needs and constantly develop their niche to expand and maintain their numbers.

Traditional corporations

In parallel with this complex structure, we see traditional enterprises fighting for oligopolistic dominance. They draw strength from the trust and loyalty of customers they have built up over time, especially in times of public uncertainty. These businesses are betting big on new technology to make incremental improvements.

In this regard, think about it traditional banks experiment with technology to optimize financial services or even diamond companies as old as De Beers piloting blockchain technology to improve diamond certification by increasing traceability.

Beyond the latter, core infrastructure, hybrid platforms, and communities are generally not interested in competing with each other, but instead compete for market share with their counterparts in their respective stacks.

A sketch of the consequences

While we can see faint glimpses of the hyper-scaled, hyper-personalized world of near-infinite stacks before us, there’s no telling what life will be like after mass integration.

However, we’d like to imagine a scenario where full interoperability allows our smart fridge to inform us that we’re running out of almond milk. Although we’re inclined to suggest we buy a new batch, our health watch corrects us that we’re in desperate need of iron and that we’d better spend our limited resources on an order of lab-grown steak.

When our calendar reminds us of an upcoming video conference and our weather app discourages us from going to the store, our phone — subscribed to a local community lab — intelligently offers us a drone delivery of steak, which we apparently pay for on the blockchain.

What will happen to our free will in a world that outwits us at every turn is a question for another day.

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