Travis Patron is a digital money researcher and curator of the 2015 Bitcoin Investor’s Report. Here he argues that, due to the introduction of blockchain technology, corporations will see computers not only take over as employees, but as customers too.
Corporations are devoting a larger share of capital to automation technologies within businesses across almost every type of industry and sector. Technological innovation, both by way of employee input and customers’ expected output, is undergoing a transformation.
It’s an organizational change that reassigns the role of the employee and customer to the domain of computer technology outside the grasp of human intervention with the introduction of blockchain technology and smart contracting systems. Blockchain technology stands to radically transform our concept of the corporation where machines, not humans, are both the customers and employees.
Decentralized autonomous organizations
The World Economic Forum estimates that by 2027, 10% of global GDP will be stored on a blockchain network. In such a world, it will be clear that corporations are less reliant than ever upon humans to survive and prosper. If anything, this solidifies blockchain technology as the blueprint for a type of corporation that is light-years ahead of its 20th century predecessor in terms of resource allocation and communication methods.
20th century business models were characterized by owning rather than sharing, specialization rather than automation, and centralized over decentralized decision making. The bitcoin blockchain economic model does away with all these conventional notions and provides us the blueprint for a 21st century digital paradigm – non-exclusive, decentralized, autonomous corporations.
This type of corporate model is fundamentally different in its makeup and functionality because, among other things, it is independent of human intervention while simultaneously owned by no single party.
In the bitcoin digital economy, machines are the employees rather than humans, which were in the industrial age. The role of the employee, and the producer of labour, falls solely on the cryptocurrency miner. In terms of the bitcoin mining function, the product of labour would be the hashing power necessary to verify transaction blocks. The compensation for each employee? The network pays each node compensation equal to the current block reward roughly every 10 minutes.
When we come to understand this shift in the makeup of the corporation, we see that the core of its function has undergone a significant change. The blockchain network concept is such an altering framework for conducting business that it shakes the very foundations of what we believe to be a legitimate corporation. Truly, the blockchain network concept represents a milestone in technology innovation.
While machines are now becoming employees, customers remain human, but these may soon become machines too, with the implementation of self-executing smart contracts.
Uncheatable smart contracts
Networks of smart contracts have empirical objectives. That is, they’re functionality will be understood through examination of the source code which it operates by. As it applies to smart contracting systems of the future, open-source systems make for an entirely transparent and uncheatable form of governance. The instances of misuse will come from failing to understand the objectives of the contract or network.
It is crucial that we note the computing revolution is well past an inflection point. When such technologies first began use in universities and large organizations, they were under the control of many, many humans who all shared one machine. With bitcoin, we have one large, interconnected computer network which controls many, many human counterparts.
More importantly, it controls one of the most precious aspects of our lives – financial livelihood. An exact reversal of how the computing revolution began is characterized by an inflection point of control which has just recently passed. First we shape our tools, thereafter our tools shape us. As Alan Turing said in his essay Intelligent Machinery, A Heretical Theory, in 1951:
“Once the machine thinking method has started, it would not take long to outstrip our feeble powers. … At some stage therefore we should have to expect the machines to take control.”
You can be certain that, just as one computer would work for many humans in times past, many humans will come to work for one main network of machines. Computer technology is capable of achieving this dominance because it rewrites the laws of society with something based on mathematics and science rather than steel and paper.
The blueprint of blockchain technology represents an important milestone in computing innovation – one which allows digital systems, whether they be for commerce or communication, to operate independently from conventional forms of law.
As is with the current landscape of bitcoin today, the miners are the employees of the corporation. Mere years ahead however, lies a paradigm where smart contracting begins to populate the role of customer as well.
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