There is a lot of hype going on considering the blockchain. Bitcoin is probably the most famous one and showed the world that cryptocurrencies can become valuable assets.
Traders and miners all over the world are in a gold rush trying to make money. But there is more. Another well-known blockchain is ethereum as you all may know very well.
While the mission of all blockchains is decentralization, ethereum and its currency Ether is not only a value storage, but a platform for new business models built around decentralization.
From an economical point of view, the distribution of wealth today is not quite fair. There are hundreds of thousands of startups in this world competing to become a monopolist in their respective branches. This is a necessity in today's internet economy. Once becoming the monopolist, platforms are often monetized by ads. As this is a common practice for content and knowledge creators, it is a flawed system. The creation of intangible assets like knowledge or digital content is not directly linked anymore to any kind of compensation. In fact there is a content overflow and users have to dig through tons of cat pics, status updates and personalized ads to pick the content that is interesting for them.
So the creators have to find channels to bring attention to their creations. These are big platforms and social communities, that take money from these creators to rank the content higher and present them to their audience. Visibility is key! So online marketing on monopolist platforms becomes the major driving force of the public internet and leads to centralization of distribution channels. To name a few branches:
- social media for personal communication
- platforms to rent appartments worldwide
- platforms to book hotels
- music streaming services
- internet search
It's probably not hard to find a monopolist for other branches that are customerfacing. In general the term "walled gardens" became popular to describe this trend.
So let's talk about the distribution of the revenue
These companies are monopolists, so they control large parts of the public communication facing the customers and thus getting a huge share of the generated products or services from content creators or other companies bound to customers. With this control comes power. The power to dictate prices and take a large slice of the revenue, while being a just a small part of the value chain.
So the equation becomes money equals visibility and not (only) having a good product or service. There are other side effects, like the visibility pointing in the other direction. The voice of a single customer can have a huge impact, so companies need to be much more service-centric nowadays, but this is a general trend, when communication as a whole improves, i.e. with customer reviews. This is why these companies have disrupted their respective branch in the first place.
The disruptors of the old unequal ways are now the new centralized monopolists. One could say history repeats itself, but I think from an economic point of view, this is a bigger challenge for the society as whole. Centralization of communication, leads to centralization of wealth, but this time in a global scale, making it hard for locally operating companies to survive on the long run.
Of course this will not be the end of our economy. Disruption happened in the past and will happen in the future, but one should be aware of how power and wealth is distributed in the world and what factors influence it.
The disruptor becomes the disrupted
Right now hundreds of startups are trying to change the world again. They are trying to turn it into something better. But how?
Decentralization. The revenue will go directly to the ones providing a service, creating content or knowledge, manufacturing products.
There are some challenges that need to be tackled in order to become a serious competitor for the monopolists. The big advantage of our today's monopolists is not only their visiblity, but also their level of trust.
When renting an appartment we are trusting the person on the other side, because we rely on profound checks of the monopolist companies bringing together suppliers and demanders on their platform. The same goes for social media accounts and most other platforms. Establishing trust in anonymous networks like the internet is a big problem that was recognized and tackled by the monopolists in the first place and thus created huge revenues for them.
While we can rely on the data that is stored in the databases of the big companies, cause they restrict access, we also can rely on the public database of the blockchain, too. A huge worldwide community takes care that the level of data manipulation is as low as those in centralized company databases. So in the near future I will be able to book appartments anywhere in the world without any intermediary from people I have never met in my life relying on blockchain technology and smart startup founders that create new more transparent business models right now.
What will it lead to?
Steem and the steem community shed light on the foggy way ahead of us. Everyone gets rewarded for contributing - or let's call it creating value from an economic point of view. The direct link of getting rewarded for creating value is a basic economic principle known since hundreds of years.
Taking away the power of visibility and trust from central entities and big companies empowers anyone everywhere in the world to participate in the everlasting exploration of knowledge and building communities around it. This is what fuels society to move forward.
Incentivizing people to contribute to the good and not only contribute to get attention will be a game changer. I can only blurrily imagine how the world will be in 5 or 10 years. But I am convinced blockchain will be the foundation of the new shiny world.
We will not be employed in big companies anymore. At all huge multinational organizations will have less power. They will make place for networks of individuals with open governance, where everyone can contribute and get rewarded for every contribution to society.
We will make our living with microtransactions and it will become a world, where people are empowered to take action to improve our society, our environment, our products - actually everything that surrounds us.
Technology and Open Source Software draw a good picture how distributed creative work can look like. Even big companies can no longer build the world on their own with developing properietary software. Instead they have to collaborate and standardize. This has a lot of cost advantages in the first place, but finally leads to more transparency. History has shown, that transparency always has led the world to better results, to become more efficient and distribute wealth better.
What is your blockchain moment? How will blockchain influence society? I am curious to hear your stories and thoughts.