Blockchain thrives on efficiency, and efficiency often arrives as a disruptor. This disruption faces resistance due to a human nature phenomenon I call Value Cognition Dilution (VCD), where ego, fear, and short-term thinking undervalue transformative innovation.
VCD stems from three key needs:
- The Need to Feel Right: People button down the hatches, insisting, “We’ve run this ship for years; we don’t need new processes.” This stems from ego (“I know best”) and a fear of irrelevance. Admitting a new way is better risks feeling like an impostor.
- The Need to Feel Secure: New technology sparks insecurity, from job stability for analogue roles to mental comfort. “We’ve always done it this way, and it’s safe,” people say. “If we change, a breach might occur because we don’t understand the tech.” Praising the unknown means admitting ignorance, which those in charge resist.
- The Need to Micro-Prioritise: Performance pressure fosters an “if it ain’t broke, don’t fix it” mindset. Disrupting a working system for a better one feels risky at the micro level, leading to delays in adopting innovation. This creates stopping points and crises of faith, leaving an air of unsettledness and in-effectiveness.
These reactions are “micro-concerned”, focusing on internal mechanics rather than “macro-concerned” planning, like meeting future client expectations. Instead of asking, “How do we prepare for what’s coming?” people worry, “How do I push this through if Bill and Fred resist?” This shifts focus from clients and products to delivery mechanisms, often people exhibiting VCD.
An Example: Speed of Transactions
Transaction speed illustrates how technology shifts expectations. Decades ago, pre-SWIFT and pre-internet banking, we accepted 5-10 business days for international payments. With SWIFT in the 1980s, this dropped to 1-5 days. By the 2000s, added fraud checks pushed it back to 2-5 days. Today, blockchain and cryptocurrencies enable transfers in roughly 5 minutes on networks like Ethereum or seconds on Solana. This evolution shows that as technology advances, so do expectations. Firms that resist blockchain risk appearing outdated to clients who demand modern speed. When “Bill and Fred” cling to old ways, it’s not just one issue, it’s a VCD mindset that spreads, creating blockades to innovation and stalling strategic reforms before they begin.
VCD in Action: Smart Contracts in Escrow
Blockchain’s smart contracts transform real estate escrow by automating agreements and eliminating intermediaries like notaries, reducing transaction costs significantly. Platforms like Ethereum-based Propy demonstrate how these trustless, tamper-proof contracts ensure accuracy and efficiency in property deals without manual oversight. Yet, VCD fuels resistance: lawyers fear reduced billable hours (need to feel right), distrust decentralised systems (need to feel secure), or cling to traditional processes (micro-prioritisation). Firms that resist risk losing clients to tech-savvy competitors, while those embracing blockchain redefine legal efficiency.
VCD Conclusion
VCD is a fallacy of human nature that’s cancerous if unaddressed. It’s why blockchain’s disruption of law, from smart contracts to instant escrow, faces pushback. Firms that overcome VCD, embracing efficiency, will lead the industry and society forward. Those stuck in the past risk becoming a time warp, losing clients to tech-savvy competitors.
The Path Forward
Value Cognition Dilution (VCD) thrives on seeking the easy path, like a young adult slipping back to the family pantry for snacks, too comfortable to brave the grocery aisle. In law and society, this manifests as clinging to familiar systems like SWIFT’s 2-5 day transfers when blockchain offers 5-minute solutions or faster. Those exhibiting symptoms of VCD must be guided to embrace innovation, like learning to shop with purpose, or stepped aside if they block progress. Leading firms must show the way, boldly navigating the new aisles of blockchain efficiency.