It’s the model, stupid!

26 July 2017

On Thursday, 15 June 2017, Cmotions was in attendance at Het Grootste Kennisfestival van Nederland. Let’s take a look back on the session with Paul Bessems, a Blockchain Consultant, the author of Blockchain Organising and CEO of Weconet. Amid all the disruptive violence and sobering narrative: because blockchain is as much a revolution as the internet… or is it?

 

What has actually changed?

The way principles like trust and supply & demand stand now, the internet has changed little, begins Bessems. The definition of a transaction is still “you give me something, I give you something”. He argues that large-scale use of technologies like the internet does not necessarily represent a major change. Of course, major steps have been made. However, the internet has not done enough to enhance productivity and to change work conduct in the service sector, he argues.

 

It is and will continue to be: trust

The basis of a transaction is an exchange of two values. Surrounding that, we find institutions (money, contracts, brand names) who create trust in that transaction. However, in the service sector, Bessems proposes, we have got carried away with the sheer number of institutions. In order to feel we can trust a transaction, we are using more and more institutions. This requires more specialists to coordinate these institutions (e.g. to draw up contracts). In turn, these specialists also have to be coordinated within their organisation, which further adds to the increased complexity. And it is that increased complexity that actually damages levels of trust.

Trust in institutions (e.g. banks, government bodies) is currently at a historic low. Bessems believes that our current economy is increasingly based on mistrust. A mistrust that could be countered by new technologies.

The trust paradox: to organise trust increases complexity and therefore mistrust

 

You can change with blockchain…

This desired trust can be programmed. Blockchain can make trust increase without increasing the complexity. By definition, the protocol establishes (scientifically proven) trust. Every transaction is being watched by a large number of other monitoring users.

What’s more, the blockchain can’t be altered. Transactions, such as buying a house, are reduced – in simplified terms – to a number of “standard questions”. For example: who is the owner. The so-called “Blockchain Oracle” assesses the value of the house and serves as a trusted third-party to bring the value of the house into the network. It is the network that carries out the check into whether the house has been sold more than once.

This technology lets people swap values person-to-person. This allows you to do business without the need of an intermediary with contracts. Imagine you can sell your house for 200 bitcoins, or for a service where somebody runs errands for you during your lifetime.

Alternatively, imagine that there no longer has to be an intermediary (government body, bank, Google) managing your data, but you can do it yourself on a Personal Data Service (PDS). And that the current authorities collect data by asking for your permission. Suddenly this shifts ownership of the data from the institution to the individual – and from the principle of collecting as much data as possible, to one of collecting as little data as possible.

 

…but to do that, you need a suitable model!

When you open the canary’s cage after many years, it doesn’t fly away straight away. As Bessems puts it, when we use new technology we are acting on existing reflexes. Compare it to riding a bike. The Backwards Brain Bicycle is an experiment that shows that it is difficult, but necessary, to let go of the old first.

Introducing a technology involves changing the model. An ID card in its current form might not work in a municipality using blockchain technology. Perhaps the reflex to go to a bank for money no longer belongs in a time when technology has placed roles with other organisations or individuals.

The current socioeconomic order is characterised by the idea of full employment. Even though, in Bessems’s view, that idea has not changed in tandem with the developments in technology. We have forgotten to change the model along with the technology. Technology in a society is therefore like a new spirit in an old body. A municipality that fully embraces innovations with robotisation, whilst also pursuing full employment, would be well advised to further define their strategy, suggests Bessems.

Productivity growth of workers in the service sector has been in decline in recent decades. The cost of our welfare seems to be rising more quickly than our productivity growth. Technology can help us – but it won’t do much if the socioeconomic model doesn’t change too. Neither will the blockchain, Bessems argues. Technology in itself does nothing.

What’s more, these days we derive our identity to a massive extent from our work. Working a lot denotes a status of importance. However, in a time of automation shouldn’t you just let that go and work less – and spend more time with your loved ones?

Karl Benz had little concept of production lines. He remained active in the craft of carmaking, where a few people make one car. Henry Ford had a different vision of this and switched to the production line, where lots of people work on a small piece of the car. The blockchain of today is the production line of back then. However, we need to organise ourselves around it like Ford did. What if, as well as self-driving cars, there could also be self-managing companies? Or, as Bessems cites in his presentation: “The firm of the future may be ten million people working together for ten minutes“.

 

Contact

Do you want to know more about this subject? Please contact us on +31 (0)33 258 28 30 or info@cmotions.nl.

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