Third Level Consequences of the Coming Adoption of Crypto-Tech and Blockchain
Companies and organizations around the world are exploring the application of blockchain technology for various uses like process management, cost reduction, or to increase transparency. Because blockchains help to remove third parties and middle men, they offer several advantages when compared to existing solutions.
One of many examples is the gaming and gambling industry which sees a big boom in the use of blockchain technology. Here is a selection of just a few ways of how companies in this sector implement crypto-tech:
- Non-fungible tokens are used for rare in-game equipment, weapons and collectibles. They ensure the authenticity of objects in games, so that players can trade them without the danger of being tricked by others.
- Lottery games running on top of the blockchain are fairer and more transparent due to open source code
- Sports betting benefits due to the creation of trustless, secure ecosystems that lie outside the control of a central party [1]
The job market’s demand in people with crypto-related knowledge will rise
Similar to this, many other industries explore the advantages of crypto and blockchain. In general, blockchains and smart contracts can make existing systems and processes more reliable, faster and cheaper. All of this causes an increased demand in people who understand blockchain technology. This means:
- We can expect that the demand for employees that understand various aspects of blockchains and cryptocurrencies will increase. This will not just affect developers and IT-specialists, but people with other backgrounds (marketing [2], sales, consulting, etc.) as well.
- The needs of the job market will cause more schools and universities to offer courses and trainings related to blockchain technology. Research in 2018 by coinbase shows, that 42 out of the world’s top 50 universities offer courses on crypto or blockchain. [3]
But it’s not just the job market or higher education driving these developments. The more crypto will become a part of everyday’s life, the more people will learn about it’s underlying working mechanisms. This will further increase the adoption of the technology. Though, for the general public to accept blockchain and crypto more time is needed. Concepts like public or private keys are still hard to grasp for many.
If an increasing number of people gains sufficient knowledge about blockchain, then this will have a number of first, second and third order effects [4] which need to be considered.
Possible future implications
It’s very likely that these consequences will affect different aspects of society, power relations, politics, and the economy. Here are a few ideas about what could happen:
- In the future, more people will use crypto rather than fiat out of a desire for more transparency or the need to have more control over their own money.
- In addition, people lost a lot of confidence in the banking system [5] because of the 2008 crisis and its aftermath.
- As a consequence, banks will lose some of their power due to the decentralized nature of cryptocurrencies.
- This also means that governments will lose some of their influence and power. How will a government use monetary tools to control the economy in the future? If government issued fiat is losing its worth, what will be the consequences? Probably more states will introduce their own cryptocurrencies. [6]
- If crypto-tech can be successfully implemented in existing systems or technologies, it will cause profound changes in how things work.
- One possibility is that we will see the rise of decentralized media. On a plus side, governments and big tech won’t be able to censor content as they see fit and thus lose influence and power to shape narratives. The disadvantage is that extremist or wrong information cannot be controlled or deleted which could lead to serious consequences.
- Another issue is that crypto-tech enables the anonymous transfer of funds (take Monero as an example). On the one side, the technology enables people to take power back from snooping governments or banks. But what about bad actors like extremist groups, who through the use of private coins such as Monero will be able to raise funds which authorities will not be able to track?
- When websites like Silk Road are decentralized with the use of blockchain, how will the authorities react?
With the further adoption of crypto and blockchain-technology society will have to face several crypto-related issues. They offer chances and challenges which will require reasoned, coordinated and robust actions from multiple actors (politics, corporations, etc.). The time to act is now because change will come and it will come fast.
Resources
[1] https://coincentral.com/how-blockchain-technology-is-changing-the-gaming-industry
[2] https://crypto.jobs/c/marketing
[3] https://blog.coinbase.com/the-rise-of-crypto-in-higher-education-81b648c2466f
[4] https://personalmba.com/second-order-effects/
[5] https://positivemoney.org/2018/08/british-public-dont-trust-banks/
[6] https://www.ccn.com/iran-launches-gold-backed-cryptocurrency-as-anticipation-for-crypto-rial-grows-to-evade-us-sanctions
