The way computer networks are built is usually a gradient in-between centralised to decentralised networks and distributed systems. A banking network from 10-20 years ago is an example of a centralized network: one place where data is put into a database management system with a network that closes that information to keep it safe from external digital intrusions.
A decentralized banking network, or let’s take facebook for that matter, is a system where parameters are converged calculatedly. There are many interconnections in a decentral network while data is politically centralized. Therefore, I have access to facebook on my devices, while every other participant has the same access to facebook and people’s contents on their devices, while we only have access to our own data via facebooks’ politically centralized database.
Decentralized systems are calculatedly and politically decentralized. There is hence a paradox in a system that can be decentralized and non-decentralised at the same time.
With distributed ledger technologies, there is neither a centralised data network nor a nodal point where everything flows into one database. Data is not politically centralized. Distributed Ledger Technologies haven’t got one management or a political centralisation system through which the fate and fortunes of this technology will be decided. This is one relevant aspect in contrast to centralised or decentralised networks.
Blockchain technology is one example of distributed ledger technologies and bitcoin was the first blockchain.
So, what’s that got to do with new work you might ask. I promise I’ll get to it.
The key promise of distributed ledger technologies is dis-intermediation. So, what does that mean; Developers stated that trusted third parties are security holds. If we want to make a transaction we don’t have to go through an existing or traditional network of middle men to get to trusted third parties. Common examples are Uber, booking.com or airBnB where someone acts as a supplier of an accommodation and places a similar offer. Above that offer are the trusted third parties. Up until now we could rely on the trusted third parties making sure that we felt comfortable with purchasing from such a supplier by carrying out a digital transaction. Blockchain makes a promise that we don’t need those trusted third parties any more to carry out these digital transactions. We can cut out the middle men. May it be in context of an exchange of digital currencies or any assets such as booking an apartment or renting a car.
The Freelancer market has seen a similar substantial change especially since the rise of digital nomads.
Many developments that we have witnessed in digitisation were not foreseen in the early days of the world wide web. Like big data and the run of companies for monopoly over data and aggregated power. Today, there is this somewhat pathetic digital feudalism about big online corporations who split the world amongst each other. However, we can see a strong tendency in this direction. So, how to explain this run for the new oil?
It’s by Metcalfe's law who showed that one fax machine is worth nothing standing alone but their value increase by the number of fax machines in use by a network. The same principle applies for platforms. An Uber becomes more valuable by the number of data and offers on the platform.
In the world of organisations this is seen as a centralistic system and Dave Gray has illustrated this phenomenon in his book called “The Connected Company” by showing how many companies have developed or at least promise to develop throughout the same period of time. In Organisational development there is the idea of a classic divided company with a hierarchic system similar to Egyptian pyramids developing towards connected companies. These are represented by rather loose formations and have no classic hierarchies. An agile mindset, with methods and tools are one pathway to get to such connected structures.
The idea is that decentralised technologies and distributed autonomous networks can be seen as a form of organisation. Therefore, bitcoin is an organization. And this is how we shift from centralised platforms towards decentralised and finally distributed networks.
The organisational form of bitcoin has no management, no hierarchy, no main office where one can go to buy bitcoins. But never the less it is an organisation that has advanced very successfully by some economic factors.
In future there will be more ogranisations that will work in a similar way. They will no longer require physical infrastructure and will in consequence ultimately cooperate in and as networks. They might still have some level of hierarchies but be more alike decentralised autonomous organisations with no physical headquarters, have no formal hierarchy or formal management. And yet an organisation following the same goals without having a written vision and mission statement or a written company philosophy.
There are fundamental questions to be answered in course of digitisation and automation. At the basis is the question of how we absorb a high rate of unemployment as a society. The question of how we transform our societal values to a community where an individual doesn’t have to define itself through his or her work or money. At the same time, we need to find ways to include everyone in value creation, welfare and prosperity while keeping the important positive aspects of competition going.
Usually in this discussion you have the extreme technology deterministic who say that this technology is coming and it will solve all our problems. While on the other hand you have the technology phobic who say that this is all just a bunch of crap we don’t need and that we should just boycott the development. But of course, as always with extreme positions in the long run neither is a feasible path to go. It’s best to take a sober and pragmatic approach about the promise of new technology. Have a closer look at where it can take us by understanding technological development as an opportunity.
Fact is, many services will be digitized or replaced by artificial intelligence and other forms of technological development. Take the autonomous driving as an example. Take the yellow Post van fleet in Switzerland. They have developed from horse carriage rides and connect mountain villages with the urban cities via railway stations. Or look at trucker drivers in the US. Take assembly line workers in car manufacturing. Many of these professions are obsolete already today. We need to find new ways and offer new perspectives to these people.
These developments can be something really good as we can be occupied with other stuff that will improve our lives. It can be very practical if artificial intelligence is doing a job for us. Such as the rise of artificial intelligence and diagnostics in MedTech. Cleaning robots in use at airports desinfecting surfaces and floors during the pandemic.
Of course, opinions differ strongly on the matter as each industry and region needs to answer questions around how to transform such communities as new networks will make many traditional services redundant. We need to discuss how to deal with these things as a society going forward.
But if we have a system that supports people who are relieved to get repetitive jobs done digitally, it is a good development.
We have to look at technological development on a larger time horizon than only one human lifetime and try to get to grips with the scale and benefits for societies, not only individuals or corporations. For centuries monks were copying the bible, then came Gutenberg and invented the printing machine. As a result, the majority of people got to learn to read, and information, knowledge and learnings started to spread. People all around the world have gotten access to education and that is changing and improving their own lives as well as the industries and regions they are working and living in. Distributed ledger technology can be seen in such a way. It will change the way we interact, exchange assets or goods and work with each other.
Understanding your industry is another broader view to take. Kodak defined itself being in the chemistry business because that was the main element of how they produced the instant picture that came out of that funny camera on a plastic square paper. If they had defined themselves being in the moment preservation business chances are they would still be around. Understanding your business and your unique contribution to the success of your business in a moment of time is of high importance to master the upcoming challenges, as technologies and we as a society are developing.
And one last thing; there is a great opportunity in decentralised technologies getting people to question ownership structures. Going back to the autonomous driving example. If we have a fleet of autonomous vehicles, we could ask ourselves if they do have to belong to one company. Wouldn’t it be possible to see those as a network of privately-owned cars in a network system that can check-in and out? And think about if we can deal with the generated value being redirected to society to a greater portion and through other sources than taxes; such as via Private and Corporate Public Partnerships (PCPP).
Or let's review Data ownership. Data has some characteristics that difference it from the traditional production factors; it's non fungible, non rival in its use, it's obsolescence-prone, co-created as a by-product of activity and creates value only when it comes in big volumes. Yet, despite the broadened discussion, data producers have no consciousness about what they are co-creating. The step missing to data ownership, is the data owners claiming their share. Today they still hand out their data "for free". Actually, we could generate a data-driven basic income as a by-product. Data quality in return might change or gain value in validity, objectivity and reliability. In a distributed network where everybody contributes and holds their shares, these things become realizable.