How will blockchains affect the world of work?
When Trust and Values are Digitized with Blockchain & Cryptocurrencies, New Work Emerges from it. Blockchain and Bitcoin were the topic of our 3rd OWLmeetup at Denkwerk Herford and the first question that came up after the two excellent presentations by Dieter Rehfeld (regioIT) and Oliver Flaskämper (Bitcoin AG) was:
We heard two key words on the evening of the Meetup in connection with blockchain technology and the digital currency Bitcoin:
- Internet of Values
- Internet of Trust
Both terms are difficult to grasp – after all, we haven’t even been able to get a true picture of the Internet of Things. Things, after all, means tangible, real things. With blockchain, we are moving to a meta-level that conveys values and trust.
In the Meetup introduction, I tried to illustrate this with some metaphors:
Imagine a fly preserved in amber. The fly is information stored in a block. The amber around the fly is the security created by the computational work – called mining. This ensures that the information cannot be subsequently changed and is distributed across all computers involved in the blockchain. The information is securely stored and can only be viewed by the parties involved.
What kind of information can it be?
Money is tangible trust in a value. Trust in the fact that I, as a baker, don’t have to pay for my car with loaves of bread and that I can easily transport values. This is what makes global trade possible in the first place. Imagine you want to do business from Greece with someone in Zimbabwe. Then you have to have either lawyers, bankers and negotiators. At best, you can transfer money via Paypal and have bypassed some middlemen But what if the money spigot is turned off in Greece and neither ATM is giving out money and your Paypal balance is frozen? That can’t happen with a cryptocurrency like Bitcoin because the currency is not tied to any government institutions. (Which, by the way, was one of the main points of discussion between our Meetup speakers: can a cryptocurrency with a central bank work or not?)
Contracts are trust that tomorrow I can still live in my apartment and my landlord will get the same amount X of money for it. I addressed it a moment ago: Contracts, transactions, personal data, medical records, and more.
Contracts are a form of software. Apps or programs that lawyers have developed to map some form of algorithm: If contract partner X does thing a, contract partner Y agrees to pay sum b. Of course, this can be made much more complex. That’s why there are contracts of hundreds of pages, created quite individually for an agreement, and standard contracts that I can simply download to buy a used car.
Just like contracts, laws ensure that we don’t have to think twice every day about whether it might be a good idea to steal the bread or pay for it. Laws and contracts create trust and smooth(er) processes so that we don’t have to renegotiate over and over again.
This is where blockchain and cryptocurrencies come in as systems to digitize trust and value and make sense of it over the internet. Further down you will find 19 sources to delve deeper into the background. At this point, I’d rather discuss the overall concept and the opportunities it presents.
Blockchain makes professions (partially) redundant
If transactions, agreements, contracts and similar information can be securely recorded and managed in the blockchain, then mainly jobs in the administrative area will fall away. From typical clerical tasks to notary publics. If digital trust is also added, tasks whose sole task is to embody or convey trust will also increasingly disappear, bankers and lawyers, for example.
But the understanding of a job is also changing: instead of taking on many different tasks for one employer, it is becoming easier to specialize in one task and perform it for many employers or clients. Conceivable here is the blockchain as an extended and universal HR department, where work agreements and contracts are stored and digital cryptocurrencies are used to process micropayments to contractors.
After all, an essential task of large companies is also: to manage work and its correct processing. Tasks that medium-sized companies in particular could outsource in the future, just as marketing, advertising or IT services are outsourced as a matter of course to agencies or, in the case of AdWords, to Google.
For employees, this could open up the possibility of multiple sources of income, being less dependent on a single employer and having to put minimal effort into administration.
We open up a whole different can of worms when we look at official procedures, municipal processes and even elections. Dieter Rehfeld indicated that regioIT has already built a blockchain-based solution on the basis of which wahelen could be carried out.
And what optimization potential can only be found in official offices if databases can be securely stored in blockchains and used in a networked manner. Acceleration, savings and more convenient use for citizens could be the result.
New work will be created
And by this I mean work in a form we haven’t seen before. William Mougayar gives some examples in his article in the form of: People earning cryptocurrency by driving their cars and giving the data generated from them to a company that upgrades the data, creating new value. Patient data that is given away in exchange for cryptocurrency to be used en masse to create new insights to cure rare diseases.
Important to this new work are 3 points:
- The work done in a system varies
- The work done must be valued and valuable
- Users can use the consideration within the market system to increase the value but also spend it externally. Through the mechanism of internal payment transactions with cryptocurrency, the value of the overall system increases.
However, work that does not belong in the system can also be contributed to increase the system value. Think of a marketing expert doing marketing work for a company, thus increasing the value of the company, and getting paid for it with Bitcoin, Ehtereum, or cryptocurrencies of their own. Especially in the case of Bitcoin, the work can see a significant increase in value simply because the currency rises immeasurably.
Example from Oliver Flaskämper’s Meetup: In 2010, someone bought 2 pizzas for 10,000 Bitcoins. These 2 pizzas would be worth about 18 million dollars today. In addition to the cryptocurrency, all that is needed on the other side is someone who has confidence in the value of the currency.
One example that came to mind in this context is computer games. Especially games where players can buy something. Even though conventional currencies are still used to pay here, a separate currency is created in the computer game system. Gold talers, for example, with which the player can purchase things that bring him status, individualization of the game character or simply time as an equivalent value. Especially for time, players are amazingly willing to pay. Saving time to get further in the game bsw. The more money flows into the system through micro amounts by the players, the more valuable the overall system becomes. The principle works from mini-games like Candy Crush on smartphones to complex game worlds that have existed for over 10 years like World of Warcraft. In the latter, by the way, new work was also created in the form of people who searched for game gold 16 hours a day, then sold it as a bundle offer via ebay to players who had little time but enough normal money.
Whether new, old or physical work they all have one thing in common:
- In a closed system a (work) force acts over a certain way or time on a thing. This very free interpretation of W = F * s is of course not suitable to sufficiently describe all forms of future work. But it still provides a good starting point.
- The blockchain could be a technology comparable to the steam engine that takes work away from us humans that we are either not good at or don’t like to do.