Written by Dr. Asher Idan, Lecturer and Consultant In the top universities of Israel and consultant for top Businesses in Israel in Social Media, Future Management, Innovation, Forecasting
In 2015, three new networks reached the general public’s awareness: the Internet of Things, the Internet of Energy and the Internet of Money, which is expressed in concepts such as the Bitcoin (digital – Internet currency) and the Blockchain, which is a kind of collective, universal “bank” that guarantees both privacy and transparency at the same time. The Internet of Things, the Internet of Energy and the Internet of Money have all come in addition to the Internet with which we have all become so familiar over the past decade – the Internet of Content of the kind of Facebook or You Tube.
The transition from a free Internet of Content to the free Internet of Things, the free Internet of Energy and the free Internet of Money, is based on the fact that over 20 years ago, we believed that only in a world of science fiction would we receive free movies and free phone calls and music and newspapers free of charge, but today, this has become a reality. In the same vein, in another decade from now, not only will the content be free, but objects such as food and jewelry will also be free, and electricity will also be free. This is due to new technologies such as: 3-D printers that allow the domestic and cheap production of products; wind turbines and solar panels for the domestic production of electricity; and the Internet of Things through which people will be able to share things and energy with others (P2P) at prices that are practically free.
The initial indications of the sharing capitalism or the collaborative (dividing) economy are already very prominent on the ground, in the form of giants such as Uber in the sharing economy of the transport sector (with a market value of $60 billion) and Airbnb (with a market value of $24 billion) in the sharing economy of real estate. Uber is a network of millions of transportation vehicles without it even owning a single taxi. Airbnb is a network of 2 million rooms, which is larger than the Hilton hotel chain. In precisely the same manner, Facebook is the largest content company in the world, even though it does not actually create content.
These three new networks guarantee a totally new economy, which could perhaps be called “Collaboratism,” that is to say a sharing capitalism. This economy is also called the “sharing economy,” and it is set forth in detail in the important book written by Jeremy Rifkin, published in 2015:
“The Zero Marginal Cost Society: the Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism.”
The main argument presented by Rifkin is that there have been various paradigms of society throughout history, and there are four elements that differentiate between the various paradigms: the type of the communications, the type of the energy, the type of the production and the type of the money.
Today, we are in a transition from the capitalist paradigm to the collaborative paradigm. Collaborative communications is done through the Internet; collaborative energy is distributed and renewable (sun – wind – the recycling of waste); collaborative production is distributed micro-production; and collaborative money is Internet money such as Bitcoin, which is located in an Internet bank that is known as Blockchain.
What happened in 2015 to cause the investments in financial technology start-ups (financial high-tech) to soar to levels that are three times higher than they were in 2014? The reason is due to the appearance of the Bitcoin, the digital – Internet currency, when the banks understood that the Internet revolution had arrived at their gates, and was posing a threat to them.
However, the Internet currency known as Bitcoin is only the beginnings of a totally new infrastructure, not only of finances, but of anything at all that needs to be both transparent, in order to prevent counterfeit, and private. For example, when we are talking about money, it is important that it will not be stolen from us (privacy), however, it is also important that we will not receive counterfeit money. Encryption guarantees privacy, and Internet transparency guarantees that there will be no counterfeit.
The Bitcoin (“Bit” is a unit of digital information; “Coin” is currency) is money that comprises two revolutionary features: firstly, it is only situated in computers, and it does not have the physical form of a paper note or a coin made of gold or copper. Secondly, it is not held by any mediating party, neither by a bank nor an investment company, but rather, it belongs to us all.
The Bitcoin is situated in the Blockchain (a chain of “blocks” or documents) in which every financial transaction is kept with transparency, so that any forgery is immediately exposed. The transparency that prevents forgeries and the encryption that prevents theft ensure efficiency not only for the Internet of Money, but for any network of valuable documents: your personal medical file, exam grades, ballots in the national elections, promotion at work, and so on and so forth.
The Blockchain is a kind of public bulletin board for the community, which documents and allows any of the members of the community to see, in real time, any transaction of the transfer of value from one member of the community to another member (the Internet feature), so that forgeries are totally impossible, because the members of the community would see a double purchase using the same note (the transparency feature), and theft is impossible because all private valuables are encrypted.
The matter is relatively simple when we are talking about a community ranging between 50 to 200 people; however, it would appear to be extremely difficult when we are talking about a “community” of the 7 billion residents of the planet. The solution is the huge computing capacity of computers on the Internet, which can allow every single one of the residents of planet Earth to see, on his or her own smart phone, a theft or a forgery committed by one of the other 7 billion residents of the planet; all provided that the storage and computing abilities are not centralized in some particular bank (a brokerage entity that collects high commissions for its brokerage services), but rather, they are distributed between computers of individuals and groups.
The computers of individuals and groups that perform the computing, transmission and documentation activities are called “value miners.” In exchange for their mining, they can receive Bitcoins or any other unit of value. This is where the term “Bitcoin mining” comes from. Bitcoins may be obtained either in exchange for the mining work or in exchange for the conversion of old currencies, such as dollars and shekels.
In San Francisco, Uber’s revenues are higher than all of the revenues of all of the taxi companies put together. At Airbnb, more rooms are rented than in the entire worldwide Hilton chain. At Amazon, each employee generates revenues for the company that are more than double what a Wall Street employee brings in. More movies are watched on You Tube than on all of the television stations around the world. What is all this? Hypercapitalism or collaboratism?
In Germany, more than one quarter of the energy is green energy from wind turbines, water and the sun. About half of the green energy in Germany is owned by private individuals and small businesses.
The 3D printers magazine claims that we have already completed 45% of the path on our way to a 3D printer that can print itself, and that will produce micro-turbines for the production of green electricity, and all at near zero marginal cost.
Open source agriculture, through 3D printers that reproduce tractors, ploughs, etc. which are made of recycled materials and driven by green energy from micro-turbines. The “global village” envisaged by McLuhan ceases to be a metaphor.
In collaboratism, the problem of the homeless and public housing will disappear, thanks to the 3D printer of buildings. 90% of architects will vanish, because design will be open source and the energy for the building printer will come from wind turbines and photovoltaic solar boilers that will be built by 3D printers. This is the collaborative spiral. The perpetuum mobile effect.
In the decade of the social networks or the Web 2.0, in the years 2005 – 2015, the percentage of the American GDP rose by approximately 5%, while the percentage of the unemployed also rose by approximately 5%. During the next decade of the social networks of the Internet of Money and the Internet of Things, the Web 3.0, in the years 2015 – 2025, software-based machines will double unemployment to over 10%. Due to the exponential factor, in the year 2045, 90% of the population will be unemployed and will receive unemployment benefits, unless they do a conversion to become makers.
At the present time, there are several artificial intelligence software programs in the legal field, which can read documents before a trial at a price of $10 per document, while lawyers or judges take approximately $100 per document: ten times more! Today, 25% of adults around the world do not work. In the last twenty years, the investment in computing has been multiplied by six, whereas the investment in work has only been multiplied by three.
50 years ago, a single textile worker operated five textile machines. Today, he operates 100 machines. Manual fashion design that takes a month takes one hour when it is done by computerized design – CAD. While the Israeli army purchases its uniforms from China, the American army purchases more and more from Robotland. In the last decade, US Postal Service has employed 25% less employees. In the last 30 years, the productivity per employee in the steel industry has been multiplied by eight. Part of this is due to outsourcing and part of it is due to robot-sourcing. Phillips has two plants in the Netherlands and in China that produce the same amount of products. In the Netherlands, where it uses robot-sourcing, it employs one tenth of the number of employees as compared with China, because in China, it uses outsourcing. The sales of the labor-intensive supermarkets in the United States have risen by 3% per year. The sales of the robot-intensive Amazon have risen by 15% per year.
And yet all of the above is absolutely nothing compared to what is going to happen in the labor market when the deep neural networks enter into the labor market in the coming decade.
And therefore, the key question is: what are the collaborative forces of production whose initial indications can already be seen today, on Google, Facebook and Uber? The collaborative forces of production that will replace the capitalist forces of production are:
|Capitalism||Collaboratism (sharing capitalism)|
|Instruments||Engines, machines and motorized transport||Chips, smart phones, software and networks|
|Capital||Financial capital||Information capital (Bitcoin, know-how)|
|Labor||80% manual labor; 20% mental labor||20% manual labor; 80% mental labor|
|Energy||Concentrated fuel and gas||Internet energy|
|Source of wealth||The machine||The Internet|
The internets of content, things, energy and valuable documents are due to undergo a quantum leap because we are beginning to integrate them with a new kind of artificial intelligence, which is known as “artificial neural networks”.
Artificial intelligence has come back from the dead, after decades of stagnation, because in the last two years, it has transpired that the internets of content, things, energy and money need to be intelligent networks