Introducing the case for the 99% among us.
As the software is eating the world one industry after another, only one information friendly business model is working, and it is advertising.
Advertising business model was designed around the central broadcasting paradigm of radio, TV and newspapers. The internet companies, who live on the advertising model, eventually become giant corporations themselves, centrally controlling all content.
“That the centralized-computing paradigm — of privately owned data silos housed in giant server farms that harvest our personal data in order to sell ads — is one that needs to change” (quote from an article by Scott Rosenberg).
When we spend money on a pair of shoes, using a credit card, we are being watched. The advertisers’ tracking software follow every action we make on and off the internet, as the point of sale (POS) devices in stores record awful lot of information about us every day.
If the currency we users spend, had abilities similar to their tracking software, and worked two-way for symmetric benefits, we could then start talking about a fair economic model. We users could then combine our information in collectively owned data silos and make good use of them to fight our fiscal rights back from central corporations.
At this point, you may wonder whether or not bitcoin is this new digital currency. Unfortunately, bitcoin is not the information-based currency that could unite us. Although many of the novel ideas behind bitcoin are very valuable, “bitcoin the currency” itself is not a candidate to change our destiny.
Blockchain, the technological infra-structure behind bitcoin, and the concept of mining, i.e. the maintenance by users, of the thousands of distributed servers (which record transactions) for a fee, are great ideas. So why not use them to our benefit!
Because of its designers’ “store of value should come first” dictum however, bitcoin is not a meaningful candidate for the solution provided in this article. It is more likely to stay as an alternative investment vehicle like gold or real estate.
We need a knowledge-based internet currency, that is able to carry information extracted from our interactions, and then, convert our own share to fiscal value when we need it. Let me describe how:
Almost all goods you see in a store are priced to compensate for their stocking and marketing/sales costs. Usually, half the price of anything we buy, goes to marketing/sales. In most countries, there is a 8% to 22% VAT on top of this 50%. (In the US instead of VAT, there is state tax).
Let’s assume now a hypotethical club, called the united users club of the world. The club could claim some of the tax back and its members pay much less when they buy stuff on the club account (since VAT is designed to abuse average consumer’s inability to receive that tax back from the state). In order to do this, however, club members would have to use a digital currency: This would help them claim their fiscal rights, against additional 2% to 3% commission cut by Visas and PayPals of the world.
Then the club could negotiate lower prices for its members from producers, since the collective data can be used to order in large quantities (wholesale), hence reduce producers’ marketing costs. And finally, the club members could use the data silo to analyze all transactions and purchasing behaviour to extract further value for its members reducing the stock costs of the producers.
Any user can join the club by using the digital currency, and she/he becomes a member instantaneously. The club should keep every member’s data confidential and could store all member transactions in a blockchain to ensure safety. In this way we can unite users of the world under one digital currency and claim our fiscal rights back from the corporations.
For those of you who are curious what this might eventually lead to, here is one possible scenario for the next decade.