Making sense of new technologies is critical to the success of any organization. New ideas are often challenging because it requires a mental readjustment. The cause of this is that when something genuinely new comes along, it challenges the meaning of things. The result is that the implicit meaning of commonly used words has changed, and they don’t mean what you think they mean. Analyzing commonly used words, in the context, with first principles and not analogical reasoning can give you clarity about a subject. You can always tell the difference between trends and innovation by examining how they impact ‘’commonly used words”. Let me illustrate.

In the late 1800s, a well-dressed, educated man walks into a telegraph office for the first time and asks the operator to send a message to his intended bride. He wrote his message down on a piece of paper and handed it to the telegraph operator. The operator took the piece of paper, tapped out the message to send it, and placed the paper on a hook on his desk. He then asked the well-dressed man for payment. To his surprise, the customer refused to pay. He complained that the operator had not sent the message because he could still see the paper hanging on the hook on his desk.

The implicit meaning of the word message is that a message is carried from one place to another. the telegraph, a technology that changed the course of human evolution, implicitly separated the message from the paper. The message was separate from the medium of transmission, and this innovation altered the meaning of what it meant to send a message. The secret of grasping new technology lies in identifying the change to the implicit meaning of commonly used words. The telegraph changed the meaning of the word message. It was a technology that separated the message from the means of transmission in a way that was a direct experience of that. The Internet, a network of computers, changed the word address. The result was the dot-com bubble. Email changed what it meant to send a message via the post, to post something. Today, you are in the midst of another change.

The media often hijack commonly used words, and marketing attempts to inspire adoption by creating an analogical fallacy, a false analogy. The analogical fallacy supposes that things that are similar in one respect must be identical in others. An example is that 1. Cars are mechanical horses. Horses eat oats. Therefore, cars eat oats. Analogical *reasoning* is one of the most common methods we use as human beings to attempt to understand and make decisions. However, reasoning by a false analogy as the foundation for significant choices inevitably leads to disaster. Putting oats in your gas tank will not have a good outcome. If we want to understand something new, we want to use a more precise tool than analogical reasoning.

Understanding is not an event. It, too, is the result of a process. The process begins with recognition. We must first ask of a thing what it is. You do that by identifying the “elements of” and then “examples of.” I want to take a moment to suggest another tool, a little more precise than analogical reasoning, and that is First Principles. The idea is to break down complicated concepts into essential elements, examine their first principles, and then reassemble them. In evaluating new technologies, you want to understand the context, examine how they affect commonly used words, and see if those ideas hold. In this way, you can decipher the implicit meaning. Mental toolkits and soft skills are things we don’t think of as something essential to invest in learning technology. After all, we believe that “special” people have them, and others don’t. It does take an investment to learn it and work to develop the skill. Yes, few make that investment. Consider that since the future of your business depends on the decisions you make today, the return on your investment is worth it.

I can think of nowhere clear thinking is needed more than in the face of hysteria, and nothing captures that more than The Blockchain.

We will wake up in a world where when you go to pay for something, the cashier will say “cash, credit, or something else .” The race to be the de-facto “something else” is a big deal. A technology that separates the transaction from the method of payment is a game-changer. Ultimately, since we live in a digital world, that “something else” will be, needs to be, something digital, and that is what the hubbub is all about. An answer to the question cash, credit, or “something else”.? A world, mind you, that is already here. Many of you don’t use “cash” in many instances. The question you need to be thinking about is where are you going to fit in this new world?

The next layer on the Internet has been referred to as The Internet of Value (IoV). The Internet of Value will enable the exchange of any asset that is of value to someone. Digital Ownership is the foundation of the next chapter of the story of the Internet. These are new technologies that will change the very nature of the human experience. Understanding them is critical to success.

Perhaps a more accurate term for the Internet of Value is the Internet of Assets. (Side note; pet peeve: these terms were being thrown around before 2008, and while for most people in Blockchain, the world was created in 2015 but there is lots of evidence that the world existed before 2015, and lots of people were discussing these ideas long before Ripple, but I digress). The Internet of Value/Assets will enable the exchange of any asset that is of value to someone. The Internet of Value is a layer on top of the Internet, not the Web, that will make it possible to transmit Ownership of any asset that is of value to someone. The Web is a network of documents. The Internet is a network of computers. They are different things. Web3 is an attempt to implement this layer on top of the Web, an ill-conceived idea for obvious reasons that we won’t get into. Suffice it to say that the core idea is to put forth a technology that separates Value from the medium of exchange and makes the means of transmission digital, much like what the telegraph did for the message.

First-principles means we need to break down the idea of value. Value, according to the dictionary, means relative worth or utility. What field of study can give us a detailed insight into this definition so that we may identify the elements of and examples of the concept of value? It turns out accounting is a good resource. In accounting: Value is the monetary, material, or assessed worth of an asset, good, or service. Every behavior has a target, so the target, in our example, the asset is the term asset. An asset is property owned, regarded as having value. The elements of an asset are; value, but perhaps more critical than value is that it is owned. To be owned presupposes that there is an owner. The elements of an asset are that it is “property” that is of “value” to an “owner.” To be owned said property must be endowed with the right to Ownership. Every first-year law school student knows the principle that Ownership is a bundle of rights. Ownership is established by legislation (law) and enforced by regulation. The most important right in that bundle is the concept of the right to exclude. If you cannot exclude someone from possession or the use of your property, there is no “value” in owning it. Thus for something to be an asset, there must be an owner. So you see, The framework of regulation, which is the enforcement method of legislation, all revolves around the bundle of rights called Ownership. Ownership can be private, but it cannot be anonymous because anonymity invalidates a claim, which is the core tenet of the concept of an asset. For there to be something of “value” to someone, there has to be a “someone,” and there has to be “ value” and a thing. Conceptually Value is composed of a few elements: property, for there to be property, there has to be an owner, and implicitly there has to be “control” because an element of Ownership is the right to exclude. Now we are starting to get some clarity on the properties or elements of the “something else” in the term.

You are going to have to live in a world that asks “Cash. Credit, or something else”. A clear perspective can help you identify what that “something” needs to have. You can’t find something if you don’t know what you are looking for. What the evidence tells us very clearly, and every government regulator should heed this is that, that “something else” is not Crypto. Anonymity is a core element of Crypto. Crypto is not the payment method of the future. You don’t need to be a technology guru to figure it out.

A good speech answers three questions: What? So What? Now What? So the “what” is an insight. When commonly used words are analyzed with first principles, it can give you clarity about a subject. More importantly it is a good indicator of true innovation. The “so what” is that we are the middle of another shift. This one changes how we pay; cash, credit or “something else”. Spotting change is important. Crypto is something else but it isn’t the “something else” of payment. How do we know? Because it doesn’t follow first principles. And, you didn’t have to spend billions of dollars “researching it” Blockchain like IBM and so many other companies did before abandoning it. All we did was use a higher standard than analogical reasoning. The “now what” is this. I encourage you to examine some of the other terms thrown around by a technology. Break things down into first principles. You don’t have to be a genius to figure it out. Greed and hysteria don’t last. No technology no matter how clever cannot break the laws of physics. Put the tools to work for yourself.

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