If the current internet is the “Internet of Information,” where anyone can exchange information easily, almost free of charge, when it is easy for everyone to create blockchains to transfer values easily, almost free of charge, it will be the next level of economy: Token economy, based on Internet of Value. This so-called “Internet of Value” is predicted to greatly change society, but in exactly what ways?
How Will Blockchain Change Society?
Due to the advancement of blockchain and the token economy, society can be expected to change in 4 major ways.
- The weakening of the state due to the decline in relative value of legal tender.
- Review of social and natural capital based on the relative decrease in economic value.
- The number of options for entities that manage public goods and services increases.
- An economy that allows trial and error for the purpose of change is created
1. Weakening of state
The first change to take place is the weakening of nations due to the relative decrease in value of legal currency (fiat currency). As the internet became an infrastructure for everyone to transmit information, a plethora of information was created, causing the value of each bit of information to relatively decline. Blockchain is an infrastructure that allows everyone to exchange value.
The value of the legal currency will decline relatively, bringing the weakening of the country based on tax revenue. Instead, companies and organizations that can gather a lot of empathy from people and build large economic zones will become influential on the scale of small and medium sized countries.
2. Value of economic activities will decline
The second change is that the relative value of traditional economic activities will decline and social capital and natural capital will be re-examined. The fact that a large amount of money is created in the world can be considered to be a relative decrease in the value of traditional economic activity.
Before the internet was introduced, information was precious. However, with the introduction of the internet, the value of information itself has decreased, and society has changed to value the platforms themselves that create information and data from information.
Likewise, with the advent of blockchain, the value of economic activity itself will decline, and the products of economic activity as well as the platforms that create activity are predicted to become valuable to society. These two things are called “social capital” and “natural capital.”
3. Increase of choices
The third change will increase the choices of entities that manage public goods and change the current state of public goods. As introduced and exemplified previously, blockchain has a big impact on money, credentials, rules and norms, social relations, and nature. Public goods refer to the goods and services that are considered necessities and are commonly available to many people.
Many are currently provided by government and public entities, but some are also provided by the private sector. Education was also held in temple schools and private schools, and there are many cases where temples are still running nursery schools and the like. Public services such as railroads, telecommunications, postal services, and libraries were initially provided by the government, but gradually privatized to respond to residents’ complicated needs more efficiently.
4. Communities will update
In the fourth change, communities will update, and an economic zone that allows for easy trial and error in regard to environmental changes will be born. Technology has rapidly exponentially advanced, and various things such as regenerative medicine and automatic driving have become feasible, but it could take too much time for our society to adapt to these developments. A centralized structure that allows for efficient, rational activities is suitable, if the environment stays the same and there is only one goal. In complex situations where the environment changes drastically and there are multiple goals being targeted, a distributed system that allows for trial and error is suitable.
If we are to adapt to the ever faster changing world and solve the multiple challenges of our time, we need a decentralized approach, applied on various aspects of our lives and societies, including our economic systems. Digitalized decentralized economic system would be much more efficient and less vulnerable to the unstable environment. Building our communities from the ground up, from local levels could be the key to help overcome the challenges upon us.