The Distributed Community Economy

The future of work led by blockchain-based companies

A tidal wave of transformation is coming. Quietly gathering mass a few hundred miles offshore, it has the potential to disrupt every industry and even governments through a new model of work. I’m not talking about the revolution of blockchain in general, but rather an entirely new concept of business, built on the framework that blockchain provides.

It started with AirBNB and Uber allowing anyone to earn money by offering their time and or rentable assets. Then we saw a growing desire from people to work from home, providing their skills for hire through freelancer platforms like UpWork, Freelancer, and Remote.com. Blockchain technology is now extending this concept by removing the traditional employer /employee working relationship and shifting to an almost entirely distributed format.

Employees have been locked in their cubicle from nine-to-five for the past 50 odd years. Hiring on contract results in employees sitting at their desk whether there is work to do or not, creating a conflicting relationship where employees are incentivized to do only as much as keeps them off of their superiors’ radar. This inefficient method of time-based production goes back to the factory days and doesn’t fit with our current society. It means employees may pretend to work while actually spending their day shopping online or hiding in the bathroom to play games on their phone. After all, as long as they are in the building, they’ll get a paycheck. The issue is far more common than we would like to imagine, and the bigger the company, the easier it is to hide.

In the world of startups, a company’s valuation is most commonly given based on the value they create in the market. This value is based on their number of active users, their recurring revenue, and their rate of churn (the amount of paying users that join the platform over the number that leave). These numbers give a precise current and projected value to the company that is attributed directly from the unbiased market. A startup must prove the value they have generated in the market or they will likely find it near impossible to secure their next round of funding.

What if employees worked the same way? What if people were paid based on the value their work generated for a community and not just for the time they spent at a desk? Some people work harder than others. Some people work more efficiently. What would happen if employees were more accurately rewarded for the value they actually added to a company rather than a single salary negotiation? What if content creators could be rewarded by content consumers directly, without having to first build an audience and then rely on ad revenue sharing? And, perhaps the most interesting question — what would happen if companies removed 90% of their employee payroll altogether and instead let their users pay each other to complete and quality check the work a typical employee would have done?

A new economic model, a model that we could call ‘The Distributed Community Economy’ is set to change how we work and even who pays us. All thanks to micro-economies that utilize crypto tokens, this model offers the potential to separate ‘employer’ from ‘employee’ and replace their roles with ‘platform owner’ and ‘community contributor’. It allows an open ceiling for innovation within a project, enables anyone anywhere to generate income, and it accomplishes all of this while eliminating a vast majority of full-time company employees.

This might sound a bit like the Uber model of work and it isn’t entirely dissimilar. The biggest difference being that Uber takes a 20%+ fee (or higher, depending on your region) and this new model takes a much smaller fee while simultaneously paying a large percentage of it back to a community pool, eventually returning it to their contributor community in the form of incentives and rewards. This new model also adds the ability to make money in a diverse number of ways such as improving the platform itself, verifying the quality of other creators’ work, or referring users and creators to the platform.

Traditional platform businesses…

facilitate connections or transactions: taking a piece of every pie

force advertising on users: taking the whole pie

taking the whole pie change the order of search results or promote items based on paying 3rd party companies rather than user’s best interests: taking the whole pie

taking the whole pie sell users’ data (without their knowledge): taking the whole pie

control everything, making decisions only in favor of company profits

While these aren’t the only models and not all companies are as greedy as the above, they represent the motivation of most traditional platforms. On platforms where content creation is crucial, they hurt the creators. On platforms where info, a service or product is being recommended, they hurt consumers by reducing the quality of their data.

Considering this issue in an even broader sense; without any motivation for validating the source of information, especially in a society where sensationalism trumps validity, fake content has begun to prevail. The harder fact is to differentiate from fake, the less society trusts knowledge and learning in general. This causes serious damage to how the average individual perceives and values knowledge, reducing our ability to evolve as a society.

The new distributed community economy has a solution to fix all the above

in a single swoop. I’ll give the example of a company that is injecting this model into its existing product through blockchain tech. It’s called ‘Cool Cousin’, and is working to connect individuals who are experts about the city they live in ‘cousins’ into unique and personalized travel guides. They do this by enabling approved cousins to list and continually update their favorite spots in the city. Travelers using the app can view cousin’s recommendations and directly request tailored travel tips or bookings through an integrated messenger or 3rd party integrations.

An existing network of 500,000 users, including 1500 cousins, will soon begin to utilize this new economy, allowing them to monetize, quality check and tip each other without any interference from the platform owner. It is a beautiful, self-regulated circle of win-win bliss which heralds the future of platforms.

Cool Cousin will soon be funding their TGE (Token Generation Event) through an ICO, which will give initial value to their tokens and allow them to begin trading through the platform. Initially, a percentage of tokens will be freely distributed to new users through a ‘community pool’, as outlined in their whitepaper. These same tokens will then be replenished back into the pool as part of usage fees, which then restarts the token use cycle. Community pool tokens can also be received as a reward for helping to improve the platform by reviewing contributors and verifying the quality of their content. This will start the flow of tokens to be used for their primary purpose; to pay for services provided by cousins, goods or services from integrated third-parties, or to send tips between users.