While some industries are evolving with blockchain, others are being left behind. Blockchain’s main advantage is its ability to cut out the middleman. Making transactions cheaper for the customer, more lucrative for the service provider, and more efficient for everyone involved. But cutting out the middleman also means making whole departments and industries redundant. Here’s why blockchain will leave you and everyone else unemployed.
Blockchain Cuts Out the Middleman
Everyone is enamored with blockchain’s ability to cut out the middleman because getting rid of the third party makes economic sense. But in all likelihood, you’re the middleman, and one of the many to become unemployed.
Take Bitcoin, the first application of blockchain. This decentralized cryptocurrency cuts out three third-parties: the bank, credit card company, and the Federal Reserve. While Bitcoin might make sense as a currency for you, the financial services industry is already paying the price. Every time you choose crypto over USD, credit card companies miss out on 2.5-3% in processing fees. Not only that, but you can operate in a system outside of taxable US dollars and banks loans.
Furthermore, bitcoin is only the first of many ways that blockchain will cut out the third party. Underlying the optimistic discussion of what blockchain can do is the fear that if you don’t adopt blockchain, you’ll become irrelevant and blockchain unemployed. With this mindset, giant financial services companies will be the first to go.
Blockchain is Coming for Financial Services First
Today, there’s a bank on practically every corner. Tomorrow, bank tellers, loan officers, managers, and data analysts will be amongst the blockchain unemployed.
To begin with, we no longer need credit card companies, banks, or federally backed currency to make a purchase. Blockchain companies will facilitate cryptocurrency lending big and small. This means that you don’t need a bank account to buy a house or a car. In fact, you might soon be able to buy a Starbucks coffee with cryptocurrency.
Secondly, large financial institutions will only survive the blockchain revolution by becoming much leaner organizations. For example, once Bank of America adopts blockchain technology, they’ll only need a fraction of their 200,000 employees. All transactions, domestic and international, will be stored and executed on their blockchain. Coupled with the move away from physical money, analysts, loan officers, tellers, and administrators will soon be among the blockchain unemployed.
America’s largest financial institutions see that they could become obsolete in the near future. That’s why Bank of America, Mastercard, and Fidelity filed the first, second, and fourth most blockchain patents in 2017. Even Goldman Sachs is getting into blockchain by offering crypto securities.
Next, it Will Gut the Sector with the Highest Employment Rates
Though more immediate, blockchain’s impact on financial services is nothing compared to what it will do for healthcare and education. According to the U.S. Department of Labor, 23,662,000 Americans work in education and health services as of July 2018. This makes it the largest industry in the country in terms of employment.
Both these industries store massive amounts of data in outdated systems that desperately need modernizing. Distributed ledger technology, a more convenient, cost-effective, and safer way to store data, would do just that. In 2017, someone hacked the UK hospital system and canceled tens of thousands of appointments, rerouted ambulances, and locked computers during surgery. Circumstances like this prove just how much blockchain has to offer healthcare and education.
However, replacing cloud and onsite hospital data storage with blockchain technology will make several careers blockchain unemployed. Medical assistants, nurses, pharmacists, and lab technicians, which are the majority of healthcare industry jobs, all involve some sort of data management.
Imagine how many people would become superfluous if medical records were accessible instantaneously across the world through a distributed ledger. Considering that healthcare is the largest industry in the US and data management is part of most industry jobs, the blockchain unemployed will include many healthcare professionals.
Simplifying the Entire Supply Chain
Blockchain’s main application is storing transactions. We’re already seeing how it can benefit international trade through IBM and Maersk’s international shipping blockchain platform. By giving all levels of the supply chain access to data, Maersk has cut the cost of international trade by 20%, per their own calculations.
Cutting costs often means cutting employees. “Some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as ‘where is my container’ from 10 steps and five people to, with TradeLens, one step and one person,” explained a Maersk representative in an email.
This is great news for trade. Maersk estimates that trade will increase by 15% with blockchain technology. But simply by cutting operational questions from 5 people to 1, they’ve already put 4 people out of a job.
Big shipping companies aren’t the only ones applying blockchain. Companies like Sourcemap are using distributed ledger tech to track fashion and other things through the supply chain. Coupling this with the shift towards ethical, locally-sourced fashion and away from retail shopping, blockchain will shink the already struggling retail and wholesale trade industries. This means taking a large portion of those 22 million jobs (according to the Department of Labor) along with it.
Smart Contracts Will Replace Negotiators
Technology is already taking 2% of lawyers’ work per year, according to NPR. This is because Artifical Intelligence is better and cheaper than humans when it comes to reviewing documents.
Today, you don’t even need a lawyer or a realtor to negotiate a contract on the blockchain. Smart contracts, digital contracts with a fixed set of terms and agreements, can facilitate loans, employment or legal contracts, import agreements, or any transaction.
Not only do they save negotiating time and bring transparency to any agreement, but you no longer have to pay steep legal or broker fees. In this sense, it will also make lawyers and realtors obsolete.
Disrupting Every Industry
The number of blockchain companies providing cheaper and more efficient alternatives proves that no industry, or career, is immune to blockchain. Their success is due to their shared ability to make transactions cheaper by making a third party irrelevant.
For example, Audius is a music streaming platform that uses blockchain technology. They’re able to give artists 85% of profits because blockchain cuts out the middleman. In this case, this means Soundcloud, Spotify, and record companies.
Power Ledger lets you exchange excess energy produced by solar panels with your neighbors. Their trial found that exchanging energy was more economical for both households than buying it for the power company. It’s easy to imagine a not-so-distant world in which the energy industry employs a fraction of the 6.4 million currently working in it (according to the Energy Department).
Blockchain, AI, and Technological Unemployment
The implementation of blockchain technology across industries ranging from finance to music will lead to widespread unemployment. Facilitating a transaction for two parties means cutting out the middleman, to the mutual benefit of the seller and buyer.
The blockchain unemployed is only one part of technological unemployment. Artificial Intelligence is quickly making many careers obsolete and/or slashing demand. Oxford University predicts that AI could replace 47% of Americans jobs in the next couple of decades.
Does this mean that everyone will be amongst the AI and blockchain unemployed? More likely, everyone will work in the gig economy. The economy may become a marketplace for selling short-term services rather than working a 9 to 5. Just like we progressed from agriculture to industry to information, blockchain and AI are simply the next evolution of work.