instead of the Theory of Creative Destruction its more the innovator's dilema:
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, first published in 1997
Innovation Dilemma (ID) vs. Creative Destruction (CD)
ID explains why large corporations can collapse. CD explains how the entire global financial structure can be replaced.
ID views change as a threat to corporations. CD views change as inevitable for civilization.
ID is about innovation for survival, CD speaks of innovation to disrupt the old order.
ID speaks of managerial failure, CD speaks of systemic evolution.
ID focuses on organizational adaptation to new technologies, while Bitcoin actually eliminates the need for organizations themselves.
Exploring the emergence of Bitcoin using ID is only relevant in its disruptive spirit but weak in its structural and ideological roots. ID focuses on the microeconomics of corporations operating under market mechanisms and competition. ID attempts to unravel the hypothesis that failure is not the result of a lack of innovation, but rather the inability of large organizations to adapt to new technologies that initially appear inferior.
If countries and central banks are analogous to incumbents, then they are experiencing a geopolitical version of ID. Adopting blockchain and crypto technology risks eroding their existing monetary power, but refusing to do so risks losing economic legitimacy amidst global digital transformation.
The difference in orientation and purpose makes ID incapable of explaining the essence of Bitcoin. Bitcoin is more appropriately described by the concept of a CD.
Bitcoin is not a product of market competition, but rather a reaction to the failures of the monetary capitalist system itself. Nor is it a product of the evolution of the old system, nor is it disruptive innovation within the same market, but rather systemic destruction that demands a new economic paradigm.
What to remember:
In ID, innovation is accommodated by incumbents once they become aware of it, then becomes part of the evolving legacy system. Bitcoin, on the other hand, cannot be accommodated; no entity can take over or control Bitcoin. Banks cannot purchase or fully integrate it without losing its meaning. Regulation cannot stop it; it can only adapt to it. This means there is no dialogue between Bitcoin and the legacy system; it "negates" it (the true essence of creative destruction). The essence of what is being eliminated is the elimination of the role of the central bank as the sole creator of money. The elimination of the need for financial intermediaries. The replacement of the concept of institution-based trust with algorithm-based trust. These are not incremental innovations, but structural revolutions.
What is FOHO?
Faith of Holding On ... So this is the confidence of investors in making long-term investments and not just because of FOMO.
None of the coins will disrupt the system. Stablecoins being issued by a company could end their existence tomorrow. 15 leading states prohibit the stablecoins,plus the country issuing their company shell closes the office.
Litecoin and other DEX coins (mostly forks of Bitcoin) cannot be shut down.
Their danger lies in a total collapse of the system, ww3 event and no more internet, a back into caves event.
Should you wish to read the book the innovator's dilema?
I think I get your point about stablecoins, but I think for the reasons you mention (they are centralized and can easily be if not shut down but weakened significantly) they aren't really a technology leading to significant creative destruction. They currently are mostly used either as a trading tool on exchanges (including "temporary hodl") or a niche fiat replacement in countries with exchange restrictions.
The "innovator's dilemma" (I read a small summary) could however applied to them to some extent, as they created a new market. However, this market isn't making big companies in the financial sector fail.
Bitcoin is also creating a new market with new customers, the "Bitcoiners", who will not be reachable that easily for the fiat world. But as of now it isn't attacking old business models either. I guess if I understand the Innovator's dilemma right, it could do so in the future.
In reality I think the innovator's dilemma can be one specific sub-category of creative destruction, or not?
Discussing stablecoins through the lens of creative destruction is highly confusing. Stablecoins emerged from blockchain innovation (the result of destruction), yet they actually support the existence of the old structure of fiat currencies. Therefore, stablecoin initiators are actually trying to prolong the lifespan of old capitalism while shifting the locus of control from central banks to digital ecosystems. CD also explains that in capitalism, only entities capable of adaptive innovation can survive the cycle of destruction. Stablecoins are a form of defensive evolution, not completely destroying the old system, but absorbing its destructive functions into transitional instruments. Therefore, stablecoins are a compromise product between destruction and adaptation, between radical innovation and the need for legitimacy of the old economy. Will a more scalable, transparent, and algorithmically based digital trust programmable money emerge in this era?
In dramatic terms, Bitcoin possesses pure rebel/destructive power, true stablecoins possess conditional/adaption power, and perhaps CDBCs possess reactive power.
It's been a while since I heard someone speak about creative destruction almost forgot the term.
Personally feel it's radical, especially with individuals growing knowledge and trying to adapt rather than become obsolete by growth in technology
So I believe what we see more now is Creative Adaptation .
While with Bitcoin relationship with Fiat, I'd go with Disruptive Innovation by Clayton
New entrant
Targeting a niche, growing and forcing the other to grow.
But I don't expect full displacement maybe partial. Bitcoin can not replace the Fiat system
Despite its flaws Fiat is needed to control the economy. There's a reason the Gold standard was stopped.
Personally I believe Bitcoin Would continue to exist as an alternative and force fiat to grow
As can be seen with their plan on CBDC.
I think creative adoption is appropriate for CBDCs. In the context of monetary evolution, CBDCs are the result of a survival strategy, not an evolution. States use CBDCs to maintain monetary control while adapting to new digital architectures, enabling payment efficiency and tracking, while simultaneously preparing the monetary system for a possible future relinking to real assets (such as gold). Bitcoin introduced decentralization and algorithmic trust; however, due to its volatility and lack of underlying assets, it paved the way for change, even though it lacks the structural stability required by state monetary systems. In an extreme scenario where trust in fiat collapses, gold and silver would be a credible option to re-establish a real-asset-based exchange rate.
