Vision for the economy of tomorrow

Society is leaving the information age and enters the age of relationships. Our future will not be shaped by labor but by managing affluence. This calls for a decentralized and for-profit approach to building wealth. A Universal Basic Income on crypto-steroids. This is the roadmap.

In an attempt to understand the world, we classify and define it. First and Third World. North and South Divide. Modern vs. postmodern. Widespread belief says that we lived in the industrial age when it came to labor and economics. The store of value of our work, was the manufactured product: car, laptop, house, oil. When we entered the information age roughly 30 years ago, the value containers of the industrial age remained intact. — Without power and computer no information.

The industrial age’s development leaped in industrialization such as plastics and production technologies. — this has shifted since the 1980s and 90s in the digital and virtual field. The carrier medium of the information age is the Internet. The product and the store of value is knowledge.

When a formative age changes to the next, the transitions are fluid and not always clear to contemporaries. Also, the clear definitions are still missing — that is the task of the historians. I argue that we are now in a transition from the information age to something new. I make this statement by observing the present and extrapolating the future.

Observations on the presence

  • In the information age, entrepreneurs made money to produce, classify, and sell knowledge. Books, newspapers, television, websites, databases. An informational edge led to social reputation (experts and journalists) and was valued with money.
  • But the most interesting business model of the 2010s has nothing to do with either products or information. It is about the provision of a so-called two-sided market. Amazon does not earn its money by selling products. But with the platform that connects buyers and sellers. AirBnB is the world’s largest hotel with no room to own. Uber is the largest haulage company without cars. The biggest profit is not made by the product. And not by the information. Because neither AirBnB nor Uber generate information.
  • The business model of the present is individualized relationships via mass communication. Facebook is the world’s largest newspaper without creating a single line of content. Youtube the largest television station. Google the largest library. All engage in relationships with users. Automated ones.
  • At the same time, the permanent and free available knowledge increases manifold. There are no more institutions that you trust to classify knowledge and filter truth. Trust in information society institutions has eroded. Often, their services are no longer noticed. (How many under 30 years know your local TV news show?)
  • There is abundance of information, erosion of perceived truths and the practical impossibility of distinguishing between truth and propaganda. The combination of which leads to perceptible human insecurity. People do not believe anything anymore.
  • Young people have long turned away from the world’s explainers. The disconnection between Facebook and Google is starting now. People feel that companies abuse them for their business purposes.

I conclude: Information and knowledge loses value, as do the relationships via mass communication. Knowledge is no longer a viable business model today. (Big data is a technology of the future, but only at the micro level and as a technical service). A business idea of 2018 based on selling information advantage in the form of knowledge for money must fail. Not least because I can organize almost any information for free with a little practice.

Network economics such as Amazon and Ebay simulate interpersonal relationships via mass communication. This will still increase in the next few years. But we have reached peak platform soon. I read that market leaders in Silicon Valley and Redmond already adapt their business model.

But if we actually leave the information age, where does the journey go?

The age of trust

There will always be products and knowledge. But they are or will not be the defining element of our future. We will rely less and less on “knowledge”. We will not trust platforms that milk our data and personality as the Matrix does bioenergy.

Platforms have brought us into world communities. But these relationships are only what the functionality of the medium allows. That is appearance and surface.

We should not only speak of fake news but of fake relationships.

They can manipulate us into decisions, but they cannot help us find a safe path through the world and society. The age of experts, explainers and priests is over. Sense and direction needs real, interpersonal trust. We are entering the age of relationships and trust is the currency of our interactions.

It’ll be a Tesla after all

Analogy: there are five car models that have more or less the same characteristics and price. We have no clue about cars and still have to buy one. How do we decide? In the industrial age, we went to the local car dealer and had to trust him because we had few alternatives. The reputation of car sellers shows how bad this model works. In the information age we could now organize the knowledge and make an informed decision. Instead of the sleazy salesman, we now trusted the information. We were like children. 30 years later it dawns on us that we cannot find truth in information. We now think:

  • Journalists are stupid or lazy
  • Media are the advertisers whores
  • The press lies
  • Decades ago the line between fact and opinion got blurry. Now we can’t even tell advertorial from research.

After studying the crypto world for a year, I can say that it is (almost) impossible to find any kind of truth. There is too much conflicting information. It is too tough to qualify credible sources. The solution to my car problem lies in the combination of:

  • Trust
  • Information
  • Accepting that all you find is an approximation of truth.

I need a system that tells me, “This car is 90% good enough.” This system must be incorruptible. It has to eliminate sentiment and agendas of individuals. The solution for this jack-of-all-trades device might be found in the nature of the Blockchain. It’s a grab bag that can generate unerring trust via software code. I’m not talking about how it works — that’s for another time.

Due to its attributes of a trust machine, Blockchain products will play a key role in any future business model. While the Internet is the operating system of information, Blockchain will become the operating system of all our decisions. A very simple example: who buys at Amazon, reads customer reviews. But we know that many of them are lies. Thus, the system “reviews” is corrupt and has little value. A Blockchain system creates not only an honest and incorruptible rating. More, such a system can turn off human bias — the way we lie to ourselves without knowing.

The future, one step at a time

Trust machines are already created around the world. The very first application is Bitcoin: a trusted currency. Smart people build Blockchain-Amazons and Facebooks and Google and AirBnBs, global Identity, banking without Banks, trading without market makers, law without lawyers. They offer us an incorruptible approach to the truth. That is a great perspective. But lets think one step further.

This incorruptibility and transparency are characteristics that make services and products interchangeable. Example Bitcoin ATMs. Any business can set up an ATM in Austria where you can buy and sell Bitcoin. They all have a pretty similar function, take about the same fees, look similar and offer a comparable user experience. From the perspective of the customers, it does not matter to which machine you bring your coins. It does not matter, until the market is saturated with machines. Then, providers need to change their strategy to keep market share.

This is a problem where mobile phone operators are currently failing. Their products are interchangeable. Operators still compensate this with advertising — to simulate distinctness. Then they dump prices to save the competition to death.

The only thing unique in the business of the future is the relationship between producer and customer.

The future of acquiring customers

Companies will directly pay leads to become customers. They will pay me to make me shop there. This is a reversal of centuries-old business doctrine. But it comes as no surprise when both the product and the information are no longer the selling proposition. Power moves from the producer to the consumer in an economy of relationships.

How will producers get the money to pay for the customer’s onboarding? With money that was previously spent on advertising.

Advertising comes with extreme friction loss. Advertising does not create an equal relationship but one of dependency in the form of a craving.

Projects using Blockchain and the psychological mechanisms of gamification explore this new doctrine. Example: I use the Blockchain email service This is a mail directory where strangers can send me emails. If I answer an email, then I will get paid a sum of money. Blockchain companies send me mails hawking their ICO. It is like an extended advertisement. When I give feedback and show interest they pay me up to 5US$. This amount is probably the amount it takes to reach me in the advertising environment. But let’s imagine the difference of my engagement: click on a Facebook banner or make money for responding to an email. With the latter, the ICO Company has already built a relationship with me for the same cost. A monetary relationship.

I read somewhere (but lost the source) that Facebook and Google earn over 2.000 US$ per year with advertising. Per person. I predict that producers will shift this money to potential customers using Blockchain services. Producers will forego “parasitic” service providers like advertising agencies and platforms. This will lead to more direct value chains.

We see — establishing relationships will become more valuable. They will make the difference with similar products and services in the future. Until Blockchain, relationships were only ideal between two people in the same room. Software can now represent this ideal.

Blockchain will be the very first step in establishing a relationship between business and customers. Now let’s take this one step further. The company now has to “upgrade” this relationship.

Upgrade 1 = branding and brand loyalty.

Upgrade 2 = a real relationship between two people.

These upgrades happen in the form of a funnel. The more “human” communication is, the tighter the funnel becomes, the fewer people are in it because the relationship becomes more complex and expensive. Technique, Blockchain, benefits, money relationship, gamification — they exist to bring people closer to the real relationship.

The network economy of today tries to simulate and replace relationships with platforms. My prediction implies a change in current doctrine. The boundaries between companies and customers will become blurred. We will have relationship communities. Producer and customer form a self-sustained symbiosis. They will become families where members help each other no matter their roles.

What Our Business Will Be

I have already dared some predictions and will dare some more.

I see four core technologies of the 21st century:

  • Robotics — machines will pick fruit, fill dental cavities and drive cars
  • AI — software will do medical diagnostics, write articles and do my taxes
  • The Internet of Things — elevators will heal themselves before they are broken, smart band aids manage diabetics’ insulin
  • Blockchain will provide a secure, transparent and trustful environment for human to human as well as human to technology relationships.

The combination of these technologies will put most people out of work within the next 25 years. The machine will do our work. There are scenarios where cars own themselves, earn money with Taxi-services and pay repairs and taxes out of the proceeds.

It is a challenge when people have eight hours more free time per day. However, it becomes a massive problem when a loss of work is followed by a loss of income. There is no guarantee that the profits the machines generate will benefit those who will be replaced. We are facing a post-work age.

What will people do when they are out of work? They will manage their affluence. Since we cannot assume that a state gives us an unconditional basic income, we have to take care of it ourselves. And we have to start with it when there is work left. Now.

The only way to have an unconditional, state-independent basic income is passive income. I prefer to call it active income. The income should work for me. Ultimately, it’s about returns and royalties. We will manage and multiply our passive income.

The business model of the future is to enable people to carry out this process. Asset management is not easy. Asset preservation is difficult. Asset multiplication is a challenge. Of course this is not a perpetual motion machine. Growth is finite. But the numbers suggest that there is enough wealth for all — when we can break the spiral of “money comes to money”.

Blockchain and crypto-economics could be a solution. It is the democratization of money. In an optimistic scenario, an alternative economy will develop over the next decade, maybe even overtaking the old one if the incentives are right. For this to happen we have to bring the financially underprivileged into the crypto-economy at the same time as the wealthy.

Our business will be to:

  • Make it easier for people to onboard affluence
  • Enable them to launch a self-administered unconditional basic income
  • Offer the tools to develop money intelligence
  • Generate Return Of Investment

Furthermore because crypto is crypto, that vision can and must operate as a for-profit project. All things being equal the company wins that can build relationships from the get-go and pay with trust. The seed will be in technology; the harvest comes with the relationships. The business will operate in two waves:

In wave one, customers will give the company money that will work towards their affluence. In wave two, the company will give the customer money to allow them to create affluence.

A governance model for inclusive wealth management

In a maturing crypto market we find a few investments opportunities besides trading that give very good returns at the moment. Among these business models are:

  • Mining
  • Master Nodes
  • Strategic Trading
  • ICO-Pools
  • ATMs
  • VC funding
  • Creating and selling access to communities

The company finds a good mix of products to diversify risk and offers a super simple user experience for it’s customers. This results into a Blackbox-Machine. I call it the 10% per Month Machine. (Give or take 10%)

I will be the first investor. I put 1 Bitcoin into the machine. One month later I get 1.1k back out of it. Now I will take .05 BTC out for spending and reinvest 1.05k back into the machine. With this my overall wealth should steadily grow.

Then I convince individuals, institutions and companies to join me. Membership open. You can put in and take out immediately. No limitations. This creates something of a tribe. It organizes around it’s Totem, the 10% Machine.

The tribe is governed by the Chief and its Shamans. Namely the investment company. They control the Totem. Of every gain or transaction the company gets a share. Parts of the proceeds go to the stakeholders in the company and towards paying the bills.

A part of the proceeds are set aside. When we have a 10% Machine it will be more, when it’s just an 8% Machine, it will be less.

Whenever we have set aside 1 Bitcoin the system elects one of the tribe members (aka investors) to become a mentor. This person can invite someone not yet in the tribe to become a member. There is a good chance that this protégé will be someone without funds or with too much reluctance to invest.

The protégée gets the 1 BTC as a gift. She can use it to invest into the machine. Half of the proceeds go directly to the protégée. The other half goes back to the pool of extra proceeds. When 1 BTC have gone back to the pool, the protégée owns 1 BTC and the pool can elect another Mentor to invite another protégée.

Now imagine the strength of the relationships within the Tribe. Investors have a hopefully positive money relationship to the Machine and a definitely good emotional relationship to their protégées.

Protégées are even more tied to the tribe because they received the gift of wealth building.

The strong relationships will pay off with tribe members reinvesting into the machine and therefore strengthening it. And it might pay off in the moment the yield drops. Because the contract in the machine says: you can withdraw your money at all times. But if you keep it in the machine then you will receive little less yield than the average. The difference will be spread to tribe members whose overall gains were lower. That would make for an interesting social experiment.

We can think the tribe bigger. Add lending and VC investing to the tribe. Or a platform of goods and services. The tribe could be a nucleus of a post-Amazon platform-world.

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