Bitcoin, Blockchain and Prosumption

Bitcoin (and other cryptocurrencies) and its underlying blockchain system are prosumption systems. There are no producers or consumers associated with Bitcoin and blockchain. All of those involved both produce and consume; they are prosumers. One journalist makes this absolutely clear in the case of Bitcoin when he points out that those who use the system are “both customers and owners of both the banks and the mint” (italics added). While the “customers” in this context are, in the terms of this approach, prosumers-as-consumers, those associated with the banks and especially the mint (the “producers”) are prosumers-as-producers. Bitcoin (and blockchain) involve both the production (especially by “miners” in Bitcoin) and consumption of data by all “nodes” in the system.

While all involved in Bitcoin (and blockchain) are prosumers, some are at times more producers (prosumers-as-producers), although they must also of necessity consume information. Such prosumers (actually their nodes) function as miners whose computers and their software compete to order new and unordered transactions into a block. They must also create a hash for the block. This involves solving difficult computational problems. Miners (and others) also serve as prosumers-as-producers when they verify transactions (e.g., creation of a new block) undertaken by others. They thereby help to maintain and secure Bitcoin’s network.

While all of this is challenging for the miner, it is easy for others (really their computers) involved in the blockchain to check (to serve as prosumers-as-producers) to make sure that the requirements are met.

As in many other instances today, it is not prosumption that is new. What is new are the technologies (e.g. Bitcoin and blockchain) that make possible new forms of prosumption.

While Bitcoin may yet fail for myriad reasons (a bursting of the current economic bubble, theft of large numbers of bitcoins, loss of faith in digital currencies, etc.), it fits well with various developments in the social world. One is the increase in prosumption and the technologies that expedite, even require, it. Others include the increasing importance of consumption and the spread of consumer culture, globalization, and rationalization (McDonaldization). Blockchain has a similar fit with contemporary social changes, but it is more likely to succeed even if Bitcoin fails. Blockchains, both public and private, have many other uses.  For example, they can be used to track almost everything including voting; use of, and payment, for music and art; and locations of cargo containers

 

An Ignored Factor in Job Loss and Job Change: The “Working Consumer”

The McKinsey Global Institute’s November, 2017 report deals with the future of work (including job loss and change) through 2030, especially in light of automation (and AI). While the report covers a wide array of causes of job change and loss, it, as is usually the case in economic reports, has nothing to say about the role of unpaid non-marketized “working consumers” (a kind of prosumer) in these changes. This omission is especially striking because the report does discuss the implications of the shift from unpaid non-marketized occupations (those that do such domestic work as “childcare, early childhood education, cleaning, cooking and gardening”) to others that are presumably paid and marketized (e.g., workers in the previously non-marketized occupations who are employed by agencies that sell their services in a broader marketplace). The non-marketized unpaid work performed by prosumers is far more important economically than that of the occupations discussed by the report. Further, unlike domestic workers prosumers are not likely to be marketized any time soon.

Among the many examples of the working consumer are prosumers bypassing the services of tellers and doing their own banking via the internet or on ATMs, doing all of the work involved in making purchases (of all manner of goods and services; for example, buying airline tickets online and bypassing travel agents), serving as their own wait- and bus-persons in fast food restaurants, pumping their own gasoline at self-service stations, and so on. While it is the case that this shift to the working consumer leads to the creation of new paid jobs (computer-related occupations relating to the burgeoning online sites), it is likely, at least in the short run, that job loss far exceeds those gains.

The source of the problem lies in the fact that the McKinsey researchers, as well as other economists and technicians associated with these kinds of reports, lack the concept of the prosumer. As a result they are unable to see, let alone analyze and quantify, the prosumer’s role in job change, primarily job loss. While the concept of the prosumer is gaining increasing attention in sociology (and other fields), it has yet to be noticed by economists. Yet, prosumers are doing infinitely more unpaid, non-marketized work than, for example, domestic workers.

It is also worth noting that advances in automation and IT will bring with them an increase in “prosuming machines” that produce and consume largely on their own. Such machines are likely to lead to significant job loss in the future.  For example, autonomous vehicles will be a cause of job loss for Uber, taxi, truck drivers, as well as those in associated occupations. However, far greater job loss will result from the interaction of working consumers and prosuming machines (e.g. the use of ATMs rather than human bank tellers).

Snap’s Spectacles: Another Small Advance in the Development “Prosuming Machines”

In 2015 I published an article in the Journal of Consumer Culture on prosuming machines. Snapchat’s sunglasses fitted with a camera (“Spectacles”) are such a machine. They enter a market that was sought most recently by Google Glass. Google Glass has not been a success, but Snap’s Spectacles has been a great success initially and promises to succeed where Google Glass did not. The sunglasses are equipped with a small camera that the wearer can turn on with the tap of a button near the left temple. That permits a 10-second video of whatever one is looking at. The advance here is that rather than taking out and using a smartphone and its camera, one can video the scene without the interference of such actions; one can be more of a participant rather than merely an observer of the scene.

In other terms, Snap’s spectacles are a prosuming machine. They allow one to produce a brief video while the producer is consuming an event and, further, that the producer (and others) can consume, shortly thereafter, on his/her smartphone. However, Spectacles remain a human technology since the person wearing them must act- push that button- in order for the camera to operate. As a human technology, Spectacles represent only a small refinement in prosuming machines. They are yet another “wearable” (another example is monitoring devices worn by patients leaving the hospital) that allows one to prosume. However, they do not constitute a further step in the direction of prosuming machines that are non-human technologies. That step would require spectacles that are truly smart machines that tape whatever they- or their mini-computers- see and decide is important. Such spectacles would operate on their own consuming events and producing videos of them. An even further advance would be implantable devices that do much the same thing and intrude even less, or not at all, on the unfolding scene.

There is no question that such technologies are possible and that Snap’s spectacles, or some competitor, will soon offer them. Since they are invisible to those being videoed, such technologies would pose a far greater threat to the privacy of others than current technologies such as Spectacles. Snap is conscious of this danger since the current iteration of Spectacles lights up when a video is being shot. I suppose an insertable technology could be created that not only videos, but also lights up the videographer’s nose- a la Rudolph the red-nosed reindeer- when it is operating. That would certainly make for a more colorful world, but that should not serve to obscure the dangers associated with that world.

The “Sharing” Economy, Uber, and the Triumph of Neo-Liberalism

Ride-sharing is a form of prosumption- those who are using (consuming) their cars provide (produce) rides for those in need of them. Ride-sharing can also be seen as part of the sharing (of cars in this case) economy, a collaborative system (the collaboration of those with rides to offer and those who need them), and a peer-to-peer (p2p) systems (drivers providing rides mainly to other drivers who happen to be without their cars). These ideas and systems associated with the sharing economy (another is airbnb) were, in principle, not based on a profit-making model, but were generally more communal and altruistic in nature. However, they all have, at least in part, been transformed by the entry of profit-making businesses that in the pursuit of profit are altering these systems, especially their more romantic characteristics.
Many drivers can, and do, engage in ride-sharing free of charge for altruistic and communal reasons. However, the rise of profit-making companies like Uber and Lyft that charge drivers a portion (roughly 20%) of every transaction for use of their online platforms has transformed ride-sharing into a job (at least part-time) and a profitable business. Unlike most forms of prosumption- using ATMs, scanning one’s groceries, using self-check-in kiosks at airports and hotels- the “producers” (the companies and the drivers) earn a money from the process.
These ride-sharing businesses been proliferating despite the fact that they have encountered opposition nationally, and to some degree globally, from taxicab companies and local governments. This is because their app-based system accessible via smartphone is highly attractive, especially to younger people, who can summon a car more quickly without standing on corners and hailing, sometimes fruitlessly, taxicabs. The latter characteristics make the taxicab seem old-fashioned to younger people. Thus, they are likely to continue to shift in the direction of ride-sharing, while the older generation will likely remain wedded, at least for a time to the taxi industry. However, while the taxi industry will not disappear, this generational difference suggests a long-term shift away from taxi industry and in the direction of the ride-sharing industry. While the traditional taxicab industry is being threatened, it is difficult to defend it because it has tended to be monopolistic and has successfully resisted unionization efforts. For their part, drivers are not well-paid and must deal with difficult (sometimes dangerous) work, with little in the way of job protection and benefits.
Yet, ride-sharing through Uber and similar companies is not without its problems. Uber drivers would seem to be even more powerless and difficult to unionize than traditional taxi drivers. Among other things, they work on their own, are widely dispersed and have little opportunity to come into contact with one another. This gives Uber great power to release them and to alter the percentage they earn from each ride. The income of Uber drivers is limited because unlike taxi drivers, they are not supposed to accept tips. While the income is attractive for those who now do this in their spare time, it might be less satisfactory for those who try to do it on a full-time basis
Another point worth mentioning is that unlike in paid jobs, those working for the ride-sharing business provide many of their own “means of production”. Uber does provide the crucial (and expensive) online system that supports and drives ride-sharing, but the drivers provide and maintain their own cars as well as the smartphones that connect them to the online system.
This a near-perfect neo-liberal system in which capitalist organizations earn profits while giving those who work for them relatively little and leaving them largely on their own to fend for themselves.