In the first part of this series we saw how trust is the only major missing link for large-scale collaboration, in the second part we went through the different social structures that governed mankind and how this affected the availability of trust as a resource, and in the third part we went into some specifics of how such a blockchain enabled trust mechanism would be designed. This is the forth and last part and I will try to speculate how a trust enabled economy would create new economic opportunities on a large scale. But first, let’s try to imagine how the near future will unfold and bring this possible abundance of trust into perspective.
There is a cocktail of technologies brewing that will reshape several aspects of society and the market. Robot process automation combined with artificial intelligence are on the cusp of forever changing the landscape of jobs, this will come with a lot of downfalls as well as opportunities. Although in a couple of decades there will be no more room for people to do repetitive soul-wrenching jobs, this does not mean there will be no job market at all. As we saw with mechanization and digitization, new technological paradigms create new jobs, thus we saw a shift from an agrarian society to an industrial and after that to a digital one. And what do you have left after this revolution of automation boils down the market? The answer is creative and innovative jobs at a level never before imagined.
But the technological cocktail mentioned above will not only impact the job market; governance, finance, and business will also be severely impacted and centralization will suffer a much-needed decline. Blockchain paves the way to a decentralizes society in which laws can be written on the spot between willing parties, a meaningful part of finance will no longer be managed by institutions that have a personal agenda, and the majority of jobs will no longer be clustered around big business. All these changes will also impact the market and will create a major shift from centralized businesses based on employment to collaborative efforts based on compatibility and how skills and talents can complement each other.
So the future seems to shift towards decentralized, collaborative and complementary efforts based on creativity, but one other ingredient needs to be added to this recipe of evolution, which is opportunities. And this is exactly where a blockchain based global trust solution comes into play, because if its ergonomically designed to fit real human behavior, it can play a major role in facilitating the unfolding of new economic paradigms that are in the making. Let’s see what opportunities would be created by a digital trust mechanism available at the tip of our fingers.
But before going forth I feel the need to point out the obvious. Once we have an easily accessible digital trust mechanism that organically ties skills and reputation to identity, its clear that in our endeavors we will prefer to find the people with the best reputation and matching set of aptitudes, this way maximizing the chances of reaching our desired goals. This means the higher the reputation, the more opportunities for collaboration, meaning that people will have an incentive to behave and deliver the best results in order to get that high reputation score. And the better the score, the higher the rewards, so people that have a good reputation will have a vested interest in protecting it or they will lose access to the better opportunities. Additionally, services and perks that make life a lot easier can be made accessible to those that have high reputations in order to further incentivize positive behavior.
An upgrade to the proximity economy
Although this is the first type of economy that emerged in history, its real potential is far from being realized. The current model is either based on a physical location of a storefront that explains the domain of activity through a visual representation or is based on word of mouth which propagates the skills of people from person to person, or a digital representation that offers no trust. But the reality is that in our immediate vicinity we have an untapped reservoir of individuals that have complementary skills and talents to our own. And if this becomes accessible to us, the level of collaboration in society will increase by orders of magnitude.
Just imagine you have an idea and input all the necessary elements in the app, and an algorithm which uses real-world data will instantly able to find people that are available for collaborations and have the necessary skills, good reputation and are in proximity to you. The app can progressively send notifications to people that match the criteria put forth and it will do so until it fills up all the spots on the team with individuals that are interested in the project. This means that the time from an idea to the first meeting with a potentiality complete team could be a couple of hours. And this would be a possibility available to all the people registered with this service for no cost at all.
Skill barter without the double coincidence of needs.
Collaboration does not refer only to projects, it can also mean a barter of skills. But the first problem is that skills are not equally treatable, you cannot exchange on a one on one rate gardening with scientific research, for example. So, a market of skills would need to exist in order to find an exchange rate between those skills. And the best way to do this would be by letting people figure that rate out on their own and just use the current rates as guidelines. But now we get to the second problem.
The double coincidence of needs is one of the major limitation of barter, meaning that if I know how to do plumbing and need my taxes done, I can only trade skills with people that need plumbing services and know how to do taxes, which is a very inefficient model because it takes a lot of effort to bridge this double coincidence of needs. Here is where a blockchain based trust solution can find some very interesting fixes.
Let’s say that in that market of skill bartering, after you have an exchange rate between skills, you introduce a token system that is accessible just for the users that have excellent reputations, with a system of rules that affect that reputation; this would be like money but with a twist. Firstly the value of that token would be directly derived from the skill barter market which is made up of individuals and not centralized institutions that can easily game the market, thus creating a value that reflects real human interactions. And secondly, the main reason for this token system would be to bypass the double coincidence of needs, the idea being that this system should facilitate skill barter and not the accumulation of tokes as wealth. Thus there is a need for a mechanism that would incentivize a free flow of services being provisioned. One way of going about this would be to treat the token as debt instead of value, meaning that if you get a service for which you did not give anything in return that creates a debt you have towards the market, while the person that did the work and got nothing in return will have the market owing her a debt that can be cashed in for other services. A large accumulation of both types of debts should have a negative effect on reputation, this would incentivize individuals to actively work towards market equilibrium, a healthy market would have the sum of positive debt and negative debt as close to zero as possible. This is just a very general idea and for it to work and I am sure there are a lot of nuances to take into consideration that I can’t even start to imagine, but this is still an idea worth perusing.
The sharing economy.
The over glorification of property combined with a consumerist culture has brought us to the point in which we possess a lot of things that we use just a fraction of the time and this is not a sustainable model from many points of view. Thus the need for a shift that is already happening towards the sharing economy, companies like Uber and Airbnb are great examples for this new economic paradigm.
A trust enabled economy would further open the door for such a sharing economy to flourish. The existence of a reputation score would be able to create a system of access to products, bypassing the need for ownership. This is something that can be done with minimal efforts on a blockchain based trust solution by providing access to such opportunities only to those that have a proven reputation. On the other hand those that abuse the trust involved in sharing would be penalized and their score would suffer.
Closing argument
Through this post series, we discussed trust from biological, social and technological points of view. I tried to put into context how different social structures and technological solutions can influence the level of trust present in society, which in turn influences the level of cooperation between individuals and thus the amount of innovation unfolding. The technological and market analysis provided are just some very general directions which need to be build upon and be transformed into viable mechanisms.
Regardless of the exact form that this global, blockchain trust solution will take, we need to do our best to create a context in which incentives and disincentives will make individual want to better themselves constantly in order to have a better and simpler existence; thus creating a culture in which collaboration is both encouraged and nurtured. The end goal of such a project would be to create an environment in which people can generate value for one another in a natural and economically sustainable way without any intermediaries taking a cut of the work or a central authority making the rules of the game, a world in which participatory collaboration is one of the easiest and most rewarding things.
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