A species becomes extinct when its last existing member dies. Businesses and business models become extinct when the last existing member dies. Like natural systems, where extinction can be a result of climate, natural selection, cosmic collision, disease/epidemic, invasive species, destruction of habitat, etc., other systems, such as economic and global operational systems, are subject to and have extinction trends as well. Why is this relevant and what does blockchain have to do with extinction? Blockchain will be the cause of the next major extinction event in business.

If one looks at centuries of economic and business evolution, it is easy to see the pattern of extinction that affects businesses. Business models have come and gone over the centuries. Some recent representative examples of business species extinction were caused by a cosmic collision (print film), by disease (automation), by natural selection (Internet businesses) and the list goes on.

The Next Extinction

Most are not aware, but there is an extinction looming. As it runs its cycle in the next approximate 50 years or less, all matter of business and economic species known today will become extinct. Like the sudden demise of dinosaurs through the Cretaceous-Tertiary extinction event, the blockchain extinction event will be just as rapid, just as impactful and just as jarring to world economies and businesses as the K-T event was to living species on this planet.

The Blockchain Extinction Event – Defined

This extinction event is the looming transformation of current operational and businesses model designs from traditional centralized, hierarchical economic systems to distributed, trusted systems or blockchain architecture built on the distributed neutrality of the global electronic computer network on which the Internet resides. This architecture that is currently manifested in bitcoin, Ethereum, Hyperledger, etc. It is blockchain which is a distributed, trusted ledger architecture or system that, as the basis for new economic and business system design, is NOT a technology that will make today’s business operations better but will necessarily be the fuel for their demise. It will lead to their demise because it is impossible for today’s businesses to transition from their current operations and business models, which are built on a centralized model, to a distributed model. Why is it impossible? It’s impossible because it requires businesses to eliminate the very methods and capabilities they execute today that drives revenue and profits. A transition of this magnitude is not possible in today’s markets, where the necessary swing expenditures to move from the legacy models in favor of the new model, can be tolerated. If this weren’t enough, today’s businesses leaders will “sit it out” as it is NOT likely to impact them immediately and therefore it won’t affect their bonuses and salaries or even their stock value for a few more decades.

Extinction Through Invasive Species

This complacency and lack of capability will allow an invasive species to be the cause of this extinction cycle. Who will be the invasive species? It will be the entrepreneurs of today and the coming decades who build new businesses based on a distributed ledger. As millennials and next generation entrepreneurs approach the creation of business with:

No hierarchy, middleman or centralized authority,

A distributed ledger business model,

Open source ideals and characteristics,

A trust network modeled after tribal trade characteristics of the past,

The replacement of current business models in favor of those that no longer centralize power or wealth,

All members of the global community – first, second, and third world citizens – being equal members and equally trusted as participants in the resultant economies and businesses.

What will result are new models in which the need for "middlemen" is no longer required. All of this will be supported by the blockchain architecture which is evolving and rapidly strengthening daily.

Realize, as said above, it is impossible for a pivot of this magnitude to fully transform a business when an invasive species is attacking a species from all sides. Second, understand that if you follow blockchain and how the existing economies and companies are reacting to the blockchain, no one is looking at it as a fundamental threat to his or her survival in the context of the way entrepreneurs are. They, still, are looking at it from the standpoint of a technology advancement that will help companies scale, automate, and become more efficient.

Protected Species Still Become Extinct

In modern times, the Endangered Species Act is intended to assist species in danger of extinction from becoming extinct. Its intent is to reduce non-catastrophic stress on a species that is threatening extinction to allow the species to recover and thrive.

There is no protection, there is no work that can prevent a business who remains operating in the current economic or centralized model from becoming extinct. Pay attention to the words I used. There is no company “who remains operating in the current economic or centralized model” who can survive this extinction event.

Entrepreneurs are already beginning the process of peeling back businesses from the economy that are edge and early candidates for evolution to a distributed ledger. This will start the move toward extinction of small or one business line companies operating in the centralized model. Their extinction will be unstoppable. Larger companies will start to lose smaller or ancillary lines to this same extinction pull and as stated above, it will be almost impossible for a company to make the transition to this new model.

This K-T Like Extinction Event Will Be Rapid

Yes, this will happen fast. It will happen fast because the new models will eliminate multiple service providers at a time. The result, as you can see in the "back of the napkin" sketch to the left, is a rapid decline in companies that operate in the current model with a slower increase in companies that are distributed as it compares to the companies that are being eliminated. This is not to say that the overall impact on the economy is a net loss in employers, but that is to be expected and must be monitored closely as this "extinction" trend gains speed.

In Conclusion

As blockchain takes hold, we will experience the "crawl, walk, run" effect on the birth of the businesses that will be putting centralized business models out to pasture. As you explore blockchain for your business, ask yourself the following questions:

Am I looking at building a business model that truly converts my company to a distributed model?

Am I looking at blockchain as a technology replacement only?

Do I have the latitude to reinvent my business in the manner that truly takes advantage of a distributed ledger?

Am I looking at blockchain to update a process or an entire business problem?

These questions will help guide you and may slow down or prevent your extinction. If you have the latitude to truly turn the corner absorbing the inevitable short-term impact to revenues, you have a chance to avoid this extinction cycle.

Thanks for reading my post which was cross-posted in Medium. If you liked it, please like or share it so that others will see it as well.