Building the Future of Work with Blockchain

Published in

WorkChain.io

7 min readJul 20, 2018

We know the future is all about self-driving cars and AI. But what does the future of work look like?

The concept of work is changing fast but the trends and innovations we’re seeing today will seem conservative compared to the much grander transformation that lies ahead.

So what will the future of work look like with blockchain technology as its backbone?

Teams of computer scientists and entrepreneurs are searching for new ways to apply blockchain to solve long-standing problems in a number of industries.

The easy wins are industries which deal in numbers because numbers are efficient to implement on the blockchain. Finance and banking are obvious examples and most of today’s blockchain solutions are disrupting precisely these industries.

More recent advancements in blockchain technology are creating new opportunities in a growing list of applications like retail and health. But what would happen if we applied blockchain to work itself? Would this supercharge human enterprise as a whole?

These are just some of the questions explored in this article. Before we get to them, we first need to set the scene.

A Brief History of Work

Work plays an important role in our lives but it means different things to different people. Most people today will agree that work is something that we get paid to do. This wasn’t always so. Fairly recently our ancestors worked to produce food which they consumed within their family or traded with their neighbors.

Work as we know it today has its roots in the industrial revolution of the 18th century. At the time, new technologies transformed the manufacturing process with the advent of machines, factories and hourly workers. This process wasn’t particularly pleasant for the workers as creativity and skill of a craftsperson were replaced by the discipline and anonymity of a line worker.

It took almost 200 years for industrialists to realize that if they want to satisfy an ever-growing demand for products, they need to make workers important again. This realization birthed a new behavioral science in the 1950s and to this day it continues to probe what motivates people to work together toward a common goal.

In today’s economy knowledge workers are especially empowered. They see themselves as professionals rather than employees and the people who retain their services are their equals rather than employers.

But knowledge workers are still a minority and for everybody else things haven’t changed much since the 1950s. Some aspects of work in particular — like the way we get paid — haven’t changed much since the Industrial Revolution and this is true even for the privileged knowledge worker.

The Role of Blockchain

As you probably know, blockchain is a decentralized ledger. It allows the same decision to be computed by many individuals who must reach a consensus about this decision before the decision can be acted upon. This theory can be clearly understood by looking at the first blockchain, Bitcoin. Bitcoin makes only one very simple decentralized decision: Whether or not to amend a user’s balance based on an incoming digitally signed payment transaction.

The second generation of blockchains like Ethereum make it possible to decentralize more complex decisions by allowing developers to write any decision logic into a smart contract which acts upon arbitrary transaction data.

This means, for example, that we can now decentralize the decision whether or not to pay someone for a completed job. The decision will always be deterministic and fair and it will be made instantly without bias or deliberation. As the underlying technology continues to improve, the complexity of the decisions which can be decentralized will only grow in the future.

So, blockchain technology is a game-changer because it allows us to work towards a common goal with people with whom we haven’t established trust. Unlike centralized systems all this can happen without the need for an intermediary, legal agreement or a means to enforce it. It turns out that this removal of trust from the equation has an enormous net benefit for everyone involved.

Trust is Expensive

People expend an enormous amount of energy and time checking up on each other and making sure others don’t cheat! Accounting, auditing, banking, legal and middle-management are only a few examples of activities which fall under this category.

In centralized systems, each party maintains its own records which we refer to as the source of truth. In a decentralized system like a blockchain this source of truth is shared between all participants. Maintaining this common source of truth means that trust no longer plays a big role in their relationships. A consensus algorithm guarantees that participants can’t create their own version of the truth.

This is why organizations experience such large net benefit when they adopt blockchain technology. It gives them rules without the expensive rulers to enforce, audit, insure and police the participants.

Back to the Future (of Work)

Now that the scene is set, let’s explore how existing and emerging technologies shape our future and how blockchain in particular fits into this picture. We will need to consider several distinct pressures all acting together to shape the future of work:

1. Automation and Artificial Intelligence (AI)

Automation continues to make manual work obsolete and AI looks set to do the same to repetitive cognitive tasks. For example, many entry-level research jobs have become obsolete because modern search engines like Google use AI to compile the same research on demand and in real-time.

Max Tegmark’s latest book “Life 3.0: Being Human in the Age of Artificial Intelligence” has a whole chapter on how AI is changing the way we work. The conclusion being that as manual and repetitive work becomes obsolete, the majority of workers will become knowledge workers performing those tasks that computers are not very good at. (Interestingly, this also means that jobs which require human interaction and communication skills are pretty safe for the time being!)

In this future economy it makes even less sense to have permanent employees so the existing trend towards a gig economy is likely to continue and accelerate in the future. Even today as many as 30% of US workers are reportedly doing some sort of “gig” work.

The challenges faced by these workers are lack of security and liquidity. They often work a small number of hours for several employers but then have to wait until the end of the month to get paid. They also have to enter into a great many legal agreements and absorb the risks associated with such short-term relationships.

Blockchain technology can address these challenges by providing payroll that is both transparent and in real-time. In the future, we will expect to get paid as soon as we finish a task or shift. This is made possible by smart contracts and platforms like WorkChain.io are delivering this exact service.

Real-time payroll and similar systems already go a long way toward mitigating the risks associated with short-term contracts. And in the future smart contracts could also be used to reward and incentivize employees by paying out micro-royalties from the revenues generated specifically by their work.

2. Globalization & The Internet

At the turn of the century globalization and the Internet created a new generation of enterprise which spans across national borders and legal jurisdictions.

These organizations use the Internet to communicate and collaborate which makes the physical location of much of their workforce less important. This approach gives organizations a competitive edge but also introduces new challenges in negotiating local laws, currency and cultural differences.

While globalization and the Internet are nothing new, we can expect their impact on how we work to continue and accelerate. Blockchain technology is in fact a natural continuation of this process because it further decentralizes information and process.

Blockchain can also address many of the challenges of hiring and paying international teams. By leveraging smart contracts to regulate the main rules in the employee-employer relationship we greatly reduce the reliance on national legal frameworks which are not always compatible.

Blockchain technology also makes it viable to set up a system of rewards and incentives that guarantees that teams are aligned and motivated regardless of their cultural background and the organization’s management style.

3. Decentralization Through Blockchain Technology

Global IT giant IBM states blockchain technology as one of it’s strategic imperatives. They are on the front lines of the digital transformation and are onboarding big industry and government clients onto their enterprise blockchain solution hosted on IBM Cloud. While cryptocurrency markets remain the subject of debate and controversy, most IT experts agree that blockchain technology and decentralization have a bright future and expect massive adoption similar to that of cloud computing.

This widespread adoption will change the way businesses work with each other and interact with governments. Once this happens it is a safe bet that they will also want to experience the same benefits internally by leveraging blockchains for internal processes like audit and payroll.

Ultimately, in a decentralized world it will make no difference if you are employed or not. You will be able to work as much or as little as you want by tapping into incentives and rewards offered by a growing decentralized business community. You will be a peer participant in an economy and will be rewarded in real-time for delivering real-value.

Conclusion

We are living in exciting times and the best is yet to come. Disruptive technologies have the potential for positive social impact but only if we plan and prepare for them. The jobs of the future will likely be very different from the jobs we do today and we will have to prepare for this with better education and infrastructure.

Many of the gaps and trade-offs associated with globalization and the trend toward a knowledge economy can be addressed by building new infrastructure with blockchains at its core.

Some of these challenges include worker liquidity and rising business process complexity. Reward automation systems like WorkChain.io’s will provide real-time payroll allowing workers to get paid as soon as they complete a task or shift.

Employing larger groups of people will no longer be subject to diminishing returns as we can apply blockchain technology to the problem of trust management. Ultimately, all of these changes should benefit people who work, allowing them more freedom to choose where they live and when they work. And by using a blockchain to distribute the risks and rewards of doing business, the line between employer and employee will start to blur, resulting in a fairer, more stable economy.