Who will lose their jobs because of blockchain, and what it will bring

Many of us almost daily use online stores, online banking, websites such as LinkedIn, Airbnb, LendingClub, Alibaba, and sometimes we use e-government and other services, whose task is to satisfy our needs and make life easier. However, let’s try to ask ourselves the question, whether all of these platforms operate optimally?

For a start, let’s describe the structure and the operating principle of advanced Internet services in general terms.

Online stores

Online store is, in fact, a lot of tables containing a register of products with their specifications and the program code, which, on the one hand, allows you filling in the table and search and to show us their contents — on the other. It also contains a payment transfer system, warehouse, and a delivery service.

Hundreds of thousands online stores exist in the world. But the reason for their existence is only one — to be an intermediary between the vendor and the buyer, profiting off of a commission. It is clear that, on the one hand, neither online store sells all the goods produced in the world, and on the other hand — one and the same product can be found on thousands of stores.

We fully understand the need for multiple vendors — competition, regional markets, etc. But why do we need so many chain stores? It seems obvious that we need online-stores also to maintain competition among intermediaries. But the aim of scope of competition is to reduce transaction costs, but any intermediary only multiplies them. Besides, let us turn to the original formulation of the problem. Let’s ask what does the vendor need? To inform on the availability of the product and it is desirable to do this once, and to the maximum number of consumers, that is to all of them. What do buyers need? To find exactly what they need as quickly and conveniently as possible among the entire set of goods produced in the world.

The solution able to satisfy the needs of vendors and buyers and, obviously: there is a need to have a single database for all products. To prevent the excessive use by a possible intermediary, this database should not belong to anyone, and it should not have the owner and a single central server.

A manufacturer from anywhere in the world will add there its products, and the buyer will be able to immediately find it. The demand analysis system will prompt the vendor, in what quantities and to what regional warehouses it is necessary to distribute its products.

What will the buyer obtain?
1. a huge range of products from around the world;
2. reduction in price of a product due to the elimination of intermediaries.
 
If the table with the buyers’ data will be included in the table with products, the advantages will also include:
 
1. the payment convenience;
2. the ease of delivery execution (the address will already be included in the database).
 
The answers to naturally occurring “but” about security, data integrity, possible conflicts between unfair vendors and buyers will be listed below.

Banks, VISA, PayPal, etc.

Now, it’s the turn of banks and other intermediaries such as Visa or PayPal. 
The things there are even simpler than in online stores: one key table with the amounts in the accounts.

Customers spend hundreds of billions of dollars annually to reduce the value in one cell and to increase it in the other by a certain amount:

Bob has sent $ 10 to Alice

Again, there exist thousands of such tables (by the number of banks), and traditionally our records are not in one of them, but in several ones. So why not collect them into a single global database, belonging to no one, in which already includes a table with the vendors and buyers? 
 
Again, the legitimate questions emerge: who will solve the problems of clients from whose accounts the money had been stolen, and who had mistakenly and wrongly paid for something? Where will be located the servers on which these tables will be stored? In fact, anyone who can access them will gain power over the entire global financial system. Let’s add these questions to the former “but”, and move on.

Linkedin

It is understood that some of the shops and banks should also divide among themselves the services such as Linkedin, for the introduction of the professional competencies and job search. Why should we have multiple databases with tables of users and companies, if we already have a single one?

It is only necessary to add the tables with CVs and vacancies to our unattributed global database. Then, the job search service will cover not 100 million Linkedin users, which make up only 3% of the working population of the planet, but all of them. The once posted CV will be immediately visible to all employers.

Airbnb

Airbnb is another typical intermediary. Only for the fact that it maintains a database with tables of property items, lessors and tenants, and the software for searching the correct items, we pay about 15% of each transaction (6–12% commission from visitors + 3% from owners).

Again, there exist a huge number of such services on the network, plus the classic real estate agencies, whose rental fee is sometimes 100%. If a single property register will be added to our global database, all of them will be able to engage into something more useful

Blockchain

So, let’s subtotal: the only solution that eliminates many intermediaries and the endless duplication of information in the network and at the same time increasing the reliability of the data would be to create a single, global, unattributed database with the register of persons (buyers, lessors, professionals, business owners), the of accounts, real estate, companies, CVs, vacancies, etc. However, the solution itself has generated a lot of questions, the answers to which we now will try to find.
 
The first question is “how?”. How something can work at all if it does not belong to anyone? How is it possible to ensure the safety and reliability of such a large amount of data? How to protect data against tampering?

And the answer to such “how?” is known, and it consists of a single word: “Blockchain” — the blockchain that since 2009 ensures reliable operation of the Bitcoin network payment system. Blokchain is the technology that will surely ensure the safety, reliability, protection against any changes of any amount of data and, most importantly, that initially assumes the absence of centralized management, and does not require the presence of the owner. The peer-to-peer network, storage of the entire array of data on each peer, and a special cryptographic protocol — this is the answer to all the “hows”.

Smart-contracts

The second question is “who?” Who will be responsible for the registration of persons, companies, real estate? Who will resolve the conflicts? Who will provide security? Since the registers do not belong to anyone.
 
Processes that at this stage of technological development cannot be automated will be controlled by the people. People may unify by any method, such as territorial one. The main thing here is not the rules of the organization, but a reliable monitoring of compliance with these rules. Here again the blockchain, and more correctly the smart-contracts and smart-laws technology implemented therein comes to the aid. What is it? In fact or rather, in content — it is the same contracts and laws as the written ones, but only recorded in the program code, and stored in a blockchain.

Contracts implement all necessary operations with the register items, and laws control what is allowed and what is forbidden to make to the contracts. They also watch those who have and who do not have the right to make changes to the contracts and the laws themselves. If the one smart-law provides that the other smart-law may only be changed if half of the electronic signatures of the persons listed in the special “parliament” register is available — then so be it. It cannot be avoided. Rather than only through the Constitutional Court, if it has been created and lodged with the appropriate rights. In so far as blockchain. If so ordered, that you can be listed in the register of parliamentarians only if voted by a certain number of members of the community using their electronic keys (for example, with mobile phones) — then it will not work otherwise. Since it is blockchain.

Now, smart-contracts of the Ethereum blokchain platform are the best known ones. Everything is ok there with reliability and certainty. But there is a problem with the control. No one is responsible for anything there. In the case of dispute only the developers can step in and make a hard-fork, and in fact, break the system in order to return the funds to those they considered cheated. All the same, there is nothing to do without people yet. So, it is necessary initially to build a system, which will state the forms of control, and solutions to disputes and, most importantly, the procedure of filling the registers with reliable data.
 
So, let’s subtotal again: the work of our global database is inconceivable without some human organization, as well as without control over the actions of individual members of the organization by means of blokchain — using smart-laws and smart-contracts. Let’s call these human associations with their laws and means of control over the compliance with these laws — as the state, and their members — the citizens.

Rights and contracts

Now we can wrap up in some technical details — let’s look at how the global database could look inside. For example, how the register of citizens is arranged?

The table name “124_citizens” is located on top of the image, where 124 is the identification number of the state, to which the register belongs, i.e. it means that there may be a set of states. Although, of course, it is possible that someone will decide creating a single register of non-state citizens. It is not forbidden in the global database, but most likely this is not feasible due to the inability to create such a large-scale association of people in our time. Therefore, we will consider the option with the division of registries by states. It should be understood that the division does not mean a ban on the data reading, and everyone will read them. It’s blokchain. But only those who have the relevant rights, prescribed in the smart-laws will be able to record and enter the data.
 
In our example (in the picture) the rights are defined by the ContractAccess(NewCitizen), which shall be read as follows: It is only permitted to the NewCitizen contract to enter the data in the register.
 
Here is the source code for this contract: NewCitizen

The NewCitizen contract which adds a new citizen can be changed only through the ChangeSourceCode contract. The latter performs simple operations: It takes the text of the amended contract from the NewSourceCode table and updates the text of the newCitizen contract. In the ChangeSourceCode table the amended texts may appear only if the signatures of the majority of citizens listed in ParlamentList register are present. The procedure can be represented as a scheme:

Similarly, the data is amended in other registries: there are some authorities who have the right to amend the registries and contracts. As a whole, the system of registries and contracts management and control may have any structure. Even such as:

To resolve the conflict the “global store” also needs a special authority rather an interstate one, acting in the framework of contracts strictly spelled out.
 
It seems like we have not yet received an answer to the question “where the single database will be located?” Initially, the answer is clear: since this is blokchain, the full versions of the register shall be kept in each of the plurality of peers. Since the volume of a single base will be such that powerful data centers will be needed for placement of its copies and the processing of incoming transactions, it is natural to assume that the peers of the network must be associated with the states. If necessary, I can explain in detail the statement in one of the following articles.

And the peer-states will sign the blocks with the transactions (this is the blockchain terminology) by turn. This may be regarded as an additional guarantee of equality of states and the maintenance of their sovereignty.

Analytical data

One of the most obvious and valuable bonuses that the government and the business will obtain as a result of the transition to a single database, can be considered the availability of a vast array of reliable real-time data for analysis. This also includes the study of the effectiveness of medical treatments and medications, depending on local factors, and planning of the infrastructure construction, and the accurate marketing predictions, and much more.

The scheme described herein can also operate in parallel with the existing polity system. But it will work completely only on the condition that it will be adopted by existing states. Currently, only they have a real opportunity and the power to organize the procedure of filling in the registers with reliable information. Certainly, they will be the first who will feel the effect of the introduction of a single blokchain platform in the form of trillions of dollars in savings from the elimination of document flow and numerous regulatory authorities, from a significant reduction in corruption, and suppression of the shadow economy and crime.

To be continued…

In the following articles dealing with a single blockchain platform you can learn about:

API and smart-contracts
There is a deception that the platforms or different databases may communicate with each other through the API and smart-contracts. We’ll show you what it may result in.

Monetary unions and the international organizations
How to create contracts and registers outside the state?

Protection of the state from the intentional or accidental attacks
How to cope with the attacks on the state on the part of the other state, native citizens or anonyms?

Protection against call of contracts within the contracts.
How to protect the citizen from the transfer of funds without its knowledge?
 
Constitutional/Supreme Court
Any contract, any register may be changed according to a predetermined procedure, by the persons having such powers under the smart constitution of the state.

Anonymous ownership of real estate
How to implement a hidden ownership of real estate in case of public registries? Of course, the one that is hidden from other people, but not from government bodies. In fact, as it is now.
 
Anonymous voting
How to hide the choice of a certain citizen, and at the same time guarantee the election accuracy.
 
Anonymous account ownership
A one account — one citizen system is very beautiful, but many people want that as few people as possible knew about their financial state.
 
Interface
Specially or by an error the state agency may show the citizens another interface, for example, a wrong question in a referendum, and the result will be that the citizens voted for a hundred-fold increase in the salaries of officials. This problem is solved by saving the front pages, as well as contracts in blockchain.

Conclusion

Technically, in software the creation of a unified blockchain platform, or more correctly a blockchain protocol, is possible today — all the necessary technologies are already developed and run-in. But there is a small problem — the government decisions are needed. The understanding of this has led to the emergence of a new political movement under the common name “blockchain international”. It includes parties aiming to convince the citizens of their countries, and most importantly, the government, that the only way to overcome the problems that have been recently incrementally attacking the world economic and political system is the optimization of all processes, which engage the armies of intermediaries that slow down the economic growth. The immediate entry of smart laws into effect will allow to carry out reforms in a twinkle; company registration, hiring employees from around the world, and the offices rental in a few clicks will accelerate the emergence of new businesses and therefore, the jobs; the access to analytical information all over the world will allow predicting the demand for any product or service with an accuracy of few meters. And this is only a small part of the positive effects that we will observe.

Certainly, there are many organizational and even psychological and ethical issues associated with the transition to a single global information space. But as the experience of the technological humanity evolution shows, these problems have never been an obstacle, but served only as an additional incentive for a new breakthrough.