Bitcoin the Next Disruptive Technology
A disruptive technology is an innovation that replaces a current technology that have existed for a long time the definition according to Businessdictionary.com it is
‘New ways of doing things that disrupt or overturn the traditional business methods and practices’ A good example of disruptive technology is the device that is installed on buses that read cards that has a stored value. In Singapore it is called ezlink. Before that was introduced people pay money manually though depositing it into a machine then a ticket was issued after the disruptive technology is introduced people today top up a card that can store value and tap it on the new machine. It is more efficient as it now faster to board the bus, time is saved and more convenient as well because you don’t need to calculate your bus fare it is automatically calculated for you. Another good example is letter and e-mails. In the past people use letters to send messages or purchase goods. With the existence of e-mails people find it easier to send messages to other people. An email is instant it remove time taken to send a letter. In both examples the disruptive technology is a superior version of the old copy and thus the old become obsolete.
Bitcoin is a disruptive technology. A peer to peer commerce like Uber and Airbnb. It will replace a current technology that has existed for a long time. What is the current technology that has existed for a long time that is going to be replaced by Bitcoin? The answer is the traditional banking payment system. The current banking system is not perfect and it has some disadvantages although it is good. In our world today where efficiency is most important for a business, the current banking system is not efficient enough. The current banking system has high expense when transacting between different banks. In Indonesia when I transfer to using a different bank I incur a Rp 5000 fee if transferring to a different bank of the same country at more than Rp 50000 when transacting with a overseas bank . One of Michael Porter three generic strategies to gain competitive advantage is through a firm being a Cost Leader. Bitcoin can assist firm to be a cost leader. A Bitcoin transaction cost is far less than transferring between different banks. A Bitcoin transaction cost as low as 0.0000002 BTC or lower when transferring between different wallets which is less than Rp 5000 rupiah. With lower transaction costs business can make more profits. Bitcoin benefit business that participates in international trade. It helps to support economists that are in favor of international trade. Bitcoin remove barriers to entry into international trade between foreign countries. It is also a payment method that rivals the over dependent US dollars. If it is difficult to find US Dollars why bother using other traditional currency when you can use Bitcoin.
In terms of security, Bitcoin also have its merits. The test is which is easier to hack an traditional banking system or Bitcoin, Both systems are nearly identical in complexity to hack. It is hard to hack the traditional banking system technology it is hard to validate the authenticator and correct pin altogether for a traditional banking system transaction to work. It is also difficult to hack Bitcoin wallets the only known way may be brute force programs.
If a business organization that want to pursue strategies such as go green and green procurement, Bitcoin is one step ahead of the traditional banking system. Traditional banking system requires lots of paper for a transaction. For example when withdraw money or depositing money banks require the person to write it for documentation purposes. Bitcoin is different everything is online with the peer to peer technology. Less paper is used during transactions as Quick Reference Code (QR Code) is used. The data stored in QR codes can be read by smartphones. The only paper is during transaction through a Bitcoin ATM which must be read by a smartphone by scanning the QR Code.
Why Bitcoin will be a disruptive technology? As mentioned with two examples, the disruptive technology is a superior version of the old technology. Bitcoin is superior to the traditional banking system. It helps business to pursue a Cost leadership strategy, green procurement or early supplier involvement strategy, creative accounting and hedging. The traditional banking system is good but it will be obsolete because a superior version of it has existed. The question is should be when it will replace the traditional banking system not why it will replace the traditional banking system. When the internet first started lots of people laugh and complain about it not being successful but the internet become used as is a need nowadays not a want. Do you want to be shocked when change happens? It is better to be prepared than not.
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