In the last article, I discussed the “programmable economy” which is implemented by creating algorithms based on the promises of a community on which the blockchain economy tries to deliver. In this article, I am going to take a look at why the blockchain ecosystem is trying to create an economy free of discrimination or privilege based on algorithm, from the income perspective.
In June 26, BOScoin held the first meetup with its community in Korean. The idea that I threw out at the meeting up was “It’s good to live as a diligent ant, but let‘s all become a smart grasshopper now.” What I meant was that through blockchain, we all should be able to enjoy the life with guaranteed capital income, without privilege and discrimination, which only a few capitalists could enjoy so far, as our lives based on labor income has become increasingly unstable.
We are living in the most affluent age of mankind. Increased productivity from advances in technology contributes largely to the affluence, but it is also due to the financial capitalism that maximized the credit creation capacity of our society. For example, someone might have a highly productive job and makes a lot of money enough to pay cash for a house, but most of us are house poor and rely on financial capitalism, spending the majority of our income on mortgage payments or rents.
The global financial crisis of 2008, ignited by US subprime mortgage defaults, is a testament that the capitalistic system built with many consumers who do not have actual buying power is difficult to sustain or grow. In addition, the rise of artificial intelligence (AI) represented by AlphaGo is causing anxiety among people that AI will substitute for human labor, decreasing our labor income and consequently lower our quality of life.
The blockchain ecosystem attributes the cause of failed distribution and growing gap between rich and poor to the structural problem in the corporate system which only pursues the shareholder wealth maximization. The structure that labor costs must be cut to maximize shareholder wealth does not give enough purchasing power to most workers who consume goods and services.
Filling the gap with financing has reached its limit. Blockchain believes that we should pursue common interest that are agreed upon by all or majority of shareholders, not just a few. Methodologically, the P2P loan and crowdfunding markets have grown with the 2016 Fintech fever. Blockchain, as part of Fintech, believes that individuals should also have access to high-risk, high-profit investment opportunities that were previously given only to existing venture capitals, private equity funds and investment banks.
As an alternative to the “shareholder capitalism,” Blockchain sees that we, the members of the capitalism, can live a life exercising our rights as a shareholder, going beyond earning wages from labor as a worker. The rights as a shareholder can mean many things. You can invest small sum in coins to exercise your rights as a shareholder, or you can share your rights and contribute to the community to receive rewards as a shareholder.
Most of the recent blockchain projects belong to one of those two categories.
The former includes a project that is split into many coins to give individual investors access to futures trading, electricity trading or social infrastructure projects such as solar power plants which were open only to a few organizations or individuals with considerable capital in the past.
The latter can be found more easily. You receive tokens as a reward when you share your workout information. Or you receive rewards when you share your game information or your credit card usage information, when you trade crypto currency or even when you study. Those projects acknowledge and reward you as a shareholder of your data who have control over your activities as a member of society.
Blockchain is an alternative technology that appeared at the time when labor income has reached its limit. The blockchain technology dreams of more equal capitalism where the problems of the existing shareholder capitalism are solved with a new concept of coin/token, and where everybody can be a shareholder and appropriately compensated through his/her own ’rights.‘
In this article, I discussed how blockchain is opening the era of capital income when the era of labor income is coming to a close. In the next article, I’m going to look into the financial capitalism that I briefly mentioned earlier, from the perspective of the sourcing and creation of credit. /Yezune Choi BOSCoin CEO
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