Blockchain and Business Evolution

Backtracking: Business Evolution Before Blockchain

1. Commercial chain
As we all know, the vast majority of physical goods must go through the steps of raw materials (-processing/manufacturing), commodities, (marketing), channels, and transactions. Among them, after the emergence of modern large-scale factories and more widely-distributed media, most of the processing and marketing stages require the initial investment of funds to support them.

The vast majority of services completed by humans are mostly conducted in the form of raw material preparation-marketing, customer-service processing, and merchandise. It may also be because, in the absence of targeted marketing, service demand is the first to be taken by the consumer. Mentioned and converted the chain into a (broad) marketing accessor-raw material processing (artificial service)-commodity form.
The core links may be adjusted before and after due to the characteristics of the industry and services. However, the composition of the basic links resulting from differences in the background of the time, technological limitations, human quality, and behavior is largely unchanged.

2. Constantly moving the core battlefield.

Before the arrival of the commodity economy, the supply of basic materials was not yet stable, the raw materials themselves were commodities, and the competition for economic activities was concentrated on the ownership of raw materials.

In the early stage of the commodity economy, there were surplus and massive homogenization transactions in raw materials, and the focus of the competition was on commodities that were initially processed, had significant functional differences, and had not yet saturated consumer markets.

After a certain degree of development of the commodity economy, the differentiation in the categories and functionalities of the commodities has been reduced, and the competition has shifted to the standardization of production that requires funding, as well as the marketing threshold necessary to expand sales.

With the improvement of the basic quality of commodities and the rise of anti-consumerism, especially after the advent of the Internet era, commodities with practical quality have become more abundant due to technological advancement, and large-scale production that depends on product quality and standards to win, but in marketing After a relatively low sales threshold, more diversified products have divided the consumer market.

When raw materials, commodities, funds, and channels no longer play a decisive role in the business competition, at the same time the final product has less difference in practical quality, and it is increasingly measured by attachment culture and sentiment; especially based on The manpower service industry has increasingly become an important commodity for the time being. It is predicted by the chain that future competition will rely on more elements based on the opened industrial chain and on the basis of credit visualization of production and organizational changes.

The transformation brought by the blockchain

1. On the economic, personal, organizational environment

(1) Economy: the excess of basic consumer goods, more and more goods selling emotions rather than selling functions

Except in some impoverished areas such as Africa, the basic food and clothing produced by the world can already meet people’s basic survival needs, and even have a considerable surplus of production capacity. The proportion of manufacturing and manufacturing industries decreased, and the share of services and technology increased year by year.

In addition to the Blue Ocean Science and Technology field where people’s needs still exist and can maintain an open imagination, at the end of the basic survival products, product quality differences can no longer be the primary consideration for consumers to make choices. Merchants can only rely on reputation, emotional marketing, etc. To evoke people’s safety and dignity needs.

(2) Individuals: food and safety needs are met in a wide range

In the market where poverty is basically eliminated, the value of labor and the purchasing power of money can basically support people’s basic survival in terms of food, clothing, housing, and housing. In times of peace and security, the so-called security needs are more attached to the feeling of “security.”

(3) Organization: Science and technology improve the efficiency of information processing, a flat organization based on individual labor is hotly debated

When the manufacturing end is gradually replaced by machines, the processing, and processing of information has become the main work content of the contemporary labor force. Under the ancillary standard of intelligent information technology, the coverage of abnormal situations that can be handled and maintained by a single person is becoming wider and wider. Science and technology make daily communication distances and information black boxes smaller and smaller, and the trend of flattening individuals as labor units is hotly debated.

2. The ongoing technological change

(1) Distributed ledger and digital currency

The underlying cache technology of the blockchain makes the transaction records open, transparent, and searchable. On this basis, an agreement has been established for the increase or decrease of mark currency, and the software system for implementing these agreements. These different agreements are currently the most popular digital currency.

In addition to bitcoins that have been accepted by some consumer terminals as a means of payment, many new digital currencies are also rising and falling.

(2) Smart Contracts and Digital Assets

The smart contract created by Ethereum is in addition to the development of digital currency, and it is applied in all aspects based on economic activities, market areas, especially financial operations, which can now be standardized. At present, many blockchain projects based on Ethereum have created many imaginative digital assets.

(3) Compilable smart business/social order

People’s economic activities and social life rules are mostly based on a centralized and authoritative system, whether it is an information center, a channel center, a power center, or any other centralization order. Then, people sell trust for these centers, and they also give different degrees of power to make rules.

When the vacuum of trust can be replaced by distributed technologies, the current various centralization orders will face the possibility of being recompiled.

3. The impact of technological change on the economy, individuals, and organizations

(1) Economy: Outside the blue ocean of science and technology, the service industry serving the independent economic form of the individual is called

Under the modern social order based on the sense of competition, the accumulated negative emotions are thus relieved. As a result, the demand for consumer goods related to the attributes of safety and dignity is relatively reduced, social networking based on individual virtual places becomes more standardized, and social networking in the real economy creating place becomes increasingly lonely. Change.

As a result, the prices of goods and services that have attached to the vested demand will be replaced by more public goods, and the demand and operating efficiency in these areas will be improved at the same time.

When the environment for production activities is more and more based on individuals, the individual’s time for independence increases, while the group social time for economic activities is relatively reduced. Before the more stable and diversified new group, social activities are fully enriched, the chain expects that mental health counseling services, diversified needs of the aged care service, and more trusting and intelligent collective care services will be expected by the general public. Get more attention.

(2) Individuals: The focus of personal activities shifts to ownership and dignity

Under the condition that individual physiological needs and security needs are basically solved, attribution, respect, and recognition become the main aspirations of people’s daily activities. People’s pursuit of food and safety has shifted from being and not to seeking quality. The criterion for measuring “quality” is also the attribution, respect, and recognition mentioned above.

(3) Organization: The repositioning of personal borders and organizational boundaries, and the decentralization trend of credit visualization boosting organizations

The clustering activities among individuals are gathered from the theme of production to the theme of life, such as the beauty of sound and body, knowledge, entertainment, and spiritual ownership and recognition related to faith, and so on.

The organizational entity boundary is back, and the virtual boundary is forward and extends in scope. Production organizations face the smart-order design challenges of maximum kinetic energy and minimum loss, new organizational cultures and production processes emerge, and industries are able to bring new possibilities based on technological changes and innovation and remanufacturing of production processes.

Individual entity boundaries move forward, virtual boundaries move backward, and groups that do not aim for economic profit increase. Due to the change of organizational form, the behavior in production activities will be more emotional, and the price of labor products will be more uniform in the larger market.

4. Completed and ongoing commercial ecological evolution

(1) Confirmation of Individual Identity: Electronic ID Card

Because the historical information of the blockchain cannot be tampered with, it is only necessary to ensure that the main body of network behavior from the individual entity to the blockchain is the same, and the authentication work can be completed.

The technology has already been realized in areas where the recognition of targeted activities with relatively low target access, counterfeiting costs, and temptation for fraud is not attractive: the Estonian government-issued digital ID cards for “e-civic citizens” to the world in 2014. Residents of ID cards can trade with Estonians. Estonian electronic residents can transfer money to any country in the world.

(2) The individual will confirmation and statistics: voting system

In recent years, elections and interventions have become hot topics in the international news. Follow My Vote, a blockchain-based technology company is committed to creating a transparent, open source, auditable voting system. With blockchain technology, the sources of votes, the number of votes, and the whereabouts of votes can all be inquiries afterward.

(3) Individual economic activities to economic benefits: online lottery and small online investment

The changes in the value of funds brought about by the individual’s small-scale online economic investment involve more than the Internet lottery. Strictly speaking, all investment activities in the secondary market can be linked.

By bringing together individual economic inputs, and then informing individuals that their successful investment operations have failed due to software failures, loss-making investment operations have been relatively successful, and later through the pool of funds to complete higher-yielding investment behavior — the platform for such operations is currently also In the financial supervision by the file included in the focus of investigation.

With blockchain technology, such an online operation center will be replaced, and individual will and economic behavior results will be clearly recorded.

(4) Transfer and deployment of funds: Finance

At present, the application of blockchain technology is most famous in the field of peer-to-peer transfer payments, and various kinds of electronic currencies that are flourishing are proof. In addition, blockchain technology is also widely used in many areas such as banking, supply chain finance, securities, and insurance.

The bank has many functions such as information screening, credit screening, safekeeping of information and funds, payment, and asset management. With blockchain technology, credit costs, information security costs, financial security, and even payment costs will all be reduced to a great extent. At present, many of the world’s top financial institutions have invested billions of dollars in blockchain projects.

Supply chain finance involves peer-to-peer payment between enterprises. Using blockchain technology, it will be able to better coordinate logistics, capital flow, and information flow in the field and reduce the credit cost in the middle of transactions.

Within the securities industry, part of the functions of the center of transactions and underwriting can be replaced by blockchain technology, forming a relatively open field of resources, payment, and fundraising channels.

In the insurance industry, the collection of funds and the confirmation of claims can also be transparent by blockchain technology. The remaining problems are insurance matching and risk pricing.

(5) Production and Creation of Core Basic Resources: Energy and Internet of Things

Based on the status quo of single resources such as minerals, oil and gas, and nuclear energy, the economic cost of enterprises, the cost of living for residents, and the risk of economic dependence have been pushed up, not only plaguing many economies, but also aggravating disputes among resource-rich countries and global governance. It has come to great trouble.

In May 2016, the world’s first energy blockchain laboratory was officially established. Through blockchain technology, the production, processing, sales, and utilization of energy can be communized, which not only increases the proportion of clean energy but also reduces the economic costs. It has also eliminated the energy dependence and energy centering in the current economic system. Many political and economic issues.

(6) Production and Creation of Products and Services: Order Design, Supervision, and Implementation

In today’s many centralized forms of organizational entities, the East has traditionally been given ethical requirements, the West has been given more institutional requirements, and companies have been given integrity requirements, and these individuals cannot achieve their own but inseparable “uncontrollable forces”. It is entrusted to the organization to complete — this process of trust transfer requires the loss of safety, health, economic and psychological costs.
The blockchain reduces this loss to the degree of intelligence at the time of designing the transparent order of execution.

Author: Marko Vidrih

@cryptomarks

Images via pixabay


Blockchain and Business Evolution was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.