With the introduction of blockchain technology and the implementation of the token economy, Gary McKay, CEO and founder of APPII, believes the 4th industrial revolution is about to take place, potentially in the coming year.
The industrial advances being brought about by artificial intelligence (AI), robotics, the Internet of Things (IoT) and blockchain technology will outstrip the industrial transformation of the last two centuries. It’s not an exaggeration to say that we are on the edge of the next great industrial revolution – Industry 4.0.
While the third and most recent industrial revolution reshaped our lives through digital transformation and social media, this next logical step will address the issues of complexity that still exist. Today, there are a myriad of processes that are still done manually – wasting time and money through inefficiencies and fraud. Industry 4.0 will see these processes automated and undertaken by digital systems, ultimately moving towards a decentralised worldview, where value is shared across systems rather than being accumulated at the centre by large organisations.
One of the main technological drivers behind this coming revolution will be blockchain, cryptocurrency, and tokens. In fact, they are already beginning to disrupt a number of industries, paving the way for Industry 4.0 today.
Paving the way for Industry 4.0 today
In the finance sector, blockchain technology, cryptocurrency and AI have been instrumental in dragging the archaic industry into the 21st century. Processes that historically involved long, time-consuming human administration and processing are now streamlined, freeing up much needed time to focus on more complex cognitive tasks. For example, financial companies are now harnessing blockchain technology to process loan applications. Rather than relying on a third-party broker service to verify an individual’s identity and credit history, loan advisors can now refer to blockchains to access verified data on credit and debit histories – reducing the time and cost it takes to approve loans.
While there has understandably been a significant amount of investment from financial companies in blockchain technology which has dominated the headlines, blockchain has the potential to disrupt virtually every other third-party broker industry; from real estate, the legal profession and insurance to recruitment, art and antiquities. As such, blockchain and the cryptocurrencies and tokens that it supports, are beginning to pave the way for disruption across every single industry – ultimately becoming the keystone for Industry 4.0.
Turning investment on its head with ICOs
In the last year alone, more than $2billion has been raised towards blockchain projects via Initial Coin Offerings (ICOs) or Token Sales. Unsurprisingly, initial investment rounds and ICO funding were directed towards blockchain platforms that offered services to the finance industry. However, as the potential disruptive power of blockchain, cryptocurrency and tokens have become more apparent, capital has started to move towards platforms harnessing the technology outside the world of finance. In particular, the big players in highly competitive markets are looking to blockchain start-up platforms to give them an edge over competitors. For example, Technojobs, one of the UK’s leading recruitment jobsites, has invested in our platform, which offers blockchain-verified CVs for the first time.
Blockchain technology is fundamentally changing the way investment is made, paving the way for how we will raise and invest in companies following the fourth industrial revolution. As a means of transferring value in a decentralised way, blockchain platforms have introduced cryptocurrency and tokens, as a substitute for traditional currency like British pounds or American dollars. Since Bitcoin’s creation in 2009, over 900 different cryptocurrencies and tokens have been created.
These cryptocurrencies and tokens can be used as an exchange for value within the platform that provides them. As such, new blockchain start-ups are choosing to raise capital for developing their platforms through ICOs and Token Sales instead of following the more traditional routes of fundraising through VCs and seed funding. The ultimate aim of ICOs is to create a token model economy on the blockchain platforms that fundamentally changes the industry the start-up is trying to disrupt. Underpinned by blockchain, ICOs are predicted to have a genuinely profound impact on every sector worldwide.
This intrinsically new way of raising capital will not only become the foundation for Industry 4.0 – as a novel concept it will drive capital towards the start-ups developing platforms in these new technologies much more quickly than through traditional methods. For example, in the recruitment sector tokens could be used as a reward for organisations who verify data on CVs, or alternatively as a reward from organisations to candidates for allowing them to view their verified profiles. Ultimately this will create a mutually beneficial environment where organisations can use tokens collected from verifying CV data to view individuals’ verified CVs.
A token-based economy will fundamentally turn the existing model in recruitment on its head. The traditional means of exchanging value, heavily weighted in companies’ favour, will be democratised, shifting the distribution of benefit in business models to the edge (i.e. to candidates and employers) instead of accumulating in the middle.
It would be remiss to not acknowledge that cryptocurrency and ICOs have come under fire in recent times, with crypto-sceptics highlighting the risks associated with a young and, at times, volatile market. While the global crypto market has been subject to short spikes, sophisticated investors should be looking at this new technology with long-term value in mind.
We are already staring at the upcoming horizon of Industry 4.0, and investment and development in blockchain technology and cryptocurrencies will bring this new revolution about in record time. Moving towards decentralised autonomous networks will streamline all aspects of life, freeing up precious time and capital to focus on the more complex, cognitive tasks that we have little time to dedicate towards when caught up in lengthy manual processes. Harnessing blockchain to create a token economy will fundamentally underpin the new world post Industry 4.0, and we are only beginning to see the tip of the ice berg when it comes to benefits.