Decentralized networks, Cryptocurrencies, Non-Fungible Tokens (NFTs), Blockchain, Bitcoin, Ethereum, DIFINITY, etc., are incessant buzzwords in the media. However, behind the hype, numerous palpable applications are being developed using distributed ledger technologies like blockchain, which are expected to unleash new markets and operating business models; displacing the grip of the current near-monopolistic centralized businesses.
Internet behemoths like Amazon, Google, Facebook, Twitter, etc., are centralized aggregator- distributor platforms that collect, own, analyze, and monetize user data through targeted advertising, selling products and services. Their scale and near-zero marginal cost allow them to provision their platform services to the farthest reaches of the globe. Colossal ever-growing centralized repositories of data give them an asymmetrical advantage through “winner-take-all” benefits and near monopolistic power to garner superlative profits; and even control the social discourse and narratives. Most aggregator-distributor platforms get the user data for free, handsomely profiting from it, and have exclusive access and usage rights. In return, they deliver egalitarian experiences globally, resulting in exponential consumer/user acquisition through network effects.
In the incumbent centralized internet-based consumer market value chain, aggregators-distributors entrenched between the upstream suppliers and the downstream consumers/users pocket most of the money. For Q1, 2021, Amazon reported a profit of $8.1 billion; Google reported a profit of $17.9 billion; Facebook reported a profit of $9.5 billion; Twitter reported a profit of $68 million.
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Emerging blockchain and crypto technologies are facilitating decentralized peer-to-peer (P2P) data networking, thereby eliminating the need for central control and diminishing the value of aggregator-distributor platforms. These decentralized networks are engendering new revenue-sharing business models amongst the P2P upstream content/data creators and downstream content/data consumers by distributing more of the profits currently being monopolized by the entrenched centralized aggregators-distributors. Creators can now have the right to own and be compensated for their data through smart contracts that automatically pay based on pre-set terms.
In these new paradigm-shifting business models, profit sharing can be done through tokens received from businesses in lieu of network participation, content creation, work, and vesting. Tokens can serve as virtual shares that appreciate as the underlying business succeeds and can be a compelling incentive for adopting and vesting in the business platform. As a result, companies can quickly go from niche to mainstream through a fast-spinning virtuous cycle.
Blockchain networks operate through decentralized protocols. Validation and record-keeping activities are decentralized and automated by outsourcing to the platform’s network users, thus eliminating a central controlling entity. Consensus mechanisms determine the current state of the ledger. Applications built on blockchain technology can create many new disruptive markets; i.e., recording/sharing of medical data, NFT marketplaces, music royalties tracking, cross-border payments, decentralized finance (DeFi) capabilities, Real-time internet of things (IoT) operating systems, supply chain, logistics, voting mechanism, personal identity systems such as Social Security, original content creation, cryptocurrency exchange, real estate processing platform, talent networks, birth, marriage, and death records, vaccination records, etc. The NFT market surged 2,100% to $2 billion in sales in Q1 2021, and the DeFi market is roughly a $100 billion market.
With flexibility and independence becoming paramount, the Gig economy is becoming a global mainstay. According to an Intuit 2020 report, 80 percent of large US companies plan to use a flexible nontraditional workforce. In addition, Harvard Business Review has reported that approximately 150 million people in the US and Western Europe work as independent contractors. In an era of technological change, demographic shifts, and economic uncertainty, companies are looking into enhancing their competitive posture by building a flexible workforce.
Covid-19 pandemic has accelerated the evolution of the workforce skillsets and is pivoting towards an “on-demand” model. According to a Gartner report, human resource (HR) professionals state that 58% of the workforce needs to acquire new skills post-pandemic. Additionally, emerging technologies, evolving business needs, and demographic shifts are transitioning the organizations’ skill requirements, creating a perpetual talent gap. Companies can bridge these critical skill gaps using global talent pools by adopting a strategic, flexible “on-demand” workforce model.
According to a Harvard Business School and Boston Consultant Group study, more companies use and intend to use digital talent platforms to fulfill their talent needs and create a nimble on-demand workforce model. Digital talent platforms with technology-led solutions such as Toptal, Catalant, Upwork, and Fiverr, etc., act as a clearinghouse to match highly-skilled, capable, and experienced people to work in areas as diverse as sales/marketing, finance, legal, project management, logistics, innovation, and R&D.
Blockchain and Artificial Intelligence (AI) can enhance talent acquisition for the on-demand workforce to the next level. For global job seekers, decentralized P2P network-based talent platforms can help build an immutable verified provenance for academic and vocational credentials, work experiences, references, intellectual property rights, professional certificates/awards, etc. Jobseeker provenance combined with AI can streamline existing laborious and error-prone recruitment processes through real-time automation of expert filtering, assessing, rating, and matching of job openings with candidates from diverse global talent pools. Machine learning and AI matching can limit biases (race, gender, age) and increase transparency during the recruitment process. The decentralized blockchain environment can cost-effectively provide a vetted pool of global talent for permanent, contract, and on-demand work by improving the matching quality.
Talent platforms can provide plug-in suites of HR services, such as recruitment, onboarding, payroll, benefits, training, accounting, compliance, and legal for the hiring companies and freelance gig workers. By offering these disparate functions through a unified decentralized platform, talent networks can substantially reduce HR management costs and provide a seamless experience for gig workers.
Decentralized applications (dapps) such as payment rails, DeFis, NFTs, staking, etc., acting as supporting services to the decentralized talent networks, can bring paradigm-shifting efficiencies and economic opportunities for all participants. For example, payment rails can allow users to make P2P cross-border payments. Likewise, DeFi capabilities, including lending, borrowing, trading, and staking, can enable users to get supplemental economic benefits.
Braintrust, a blockchain-based digital talent freelancer, connects technical and design freelancers with US companies via a bidding mechanism. When companies using the platform hire freelancers, they pay Braintrust 10% of the bid amount as a fee.
Bondex, a decentralized talent ecosystem, is built on a global professional network powered by AI and utilizing blockchain. Company will add services for network participants by drip releasing decentralized applications (dapps), such as payments rails and DeFi capabilities, etc. In addition, the company will share a portion of its revenue as a financial reward for participating and vesting in the ecosystem. “At Bondex, our users are not the product. They are real stakeholders in the growth and success of the talent ecosystem through tokenized revenue sharing mechanisms,” said Ignacio Palomera, Bondex Chief Strategy Officer. Unlike the contemporary solutions and business models, Bondex’s reward system uniquely provides economic opportunities to its ecosystem participants.
Through rich global P2P interactions, blockchain and crypto technology applications are ready to disrupt the talent markets and address the needs of the gig economy in the post-pandemic world.