Today’s post talks about the 3 reasons why people do not want to do business with each other, and how Katalyst is the solution to greater societal welfare.
Enjoy the post!
Reason #1: Both Parties Do Not Trust Each Other
Scenario: Sometimes it may be the case that one party has a service or a product that is desired by the other party, but both parties may not necessarily trust each other.
This has nothing to do with
- pessimism or optimism, or a “loss of faith in human nature”;
- a human being being fundamentally evil or kind; or
- positive or evil intentions.
It can also simply be because one party has some characteristics that makes it difficult to do business with him/her. Or it can also simply mean that both parties have worldviews that really clash. It can also be because it is their first time transacting with each other.
Some other examples of mistrust resulting in no business transactions include:
- Lack of adherence to mutually agreed upon timelines. Some people sometimes procrastinate and fail to deliver work on time;
- Lack of experience and bad planning;
- One party’s delusion of his or her capabilities– overpromising and under delivering;
- Evil intentions;
- Sometimes people just forgot that they made the promise to you… haha!
As a result, business transactions do not occur, and tremendous value that could have been generated is forgone.
How Katalyst Solves This Issue:
Katalyst is a recording protocol that records any defined economic activity.
In this context, the foundation of any particular business transactions is now task-focused instead of human-focused. Context is now clear, and tasks are now well-defined. Any party that disagree on the tasks can simply not choose to start it, and that will be because they disagree with the task and NOT the person.
Think about it– being task-focused makes everyone more humane and happier, not less. Because now people can finally be more objective and take any disagreements not as a rejection of the person, but as a rejection of tasks that are clearly written out!
Simply put, for an employer-employee relationship, if employees don’t do the task, they don’t get paid. If service providers don’t provide the promised services, the protocol will not release the payment to them.
The Katalyst Protocol automates all these transactions and eliminates the middlemen, thereby making trust in human beings irrelevant.
Reason #2: Fear Of Being Exploited Due To Asymmetric Information
Asymmetric information basically states that one party knows something more than the other party.
Scenario: Let’s say you want to buy a mountain bicycle. If you suspect that the seller might be withholding some information from you, it’s most likely that you will not buy the bike from him.
This is because you fear being exploited. In economic terms, this is known as the problem of adverse selection.
How Katalyst Solves This Issue:
Katalyst is a recording protocol.
So perhaps one week before payment, the buyer could request the seller to ride the bicycle daily for 10 minutes each at certain paces, and request for the protocol to record things like sounds, speed, smoothness of movement, pictures and distance covered.
Records are time-stamped so there is no risk of the seller’s falsifying information. Therefore, the buyer can enjoy a peace of mind.
Because information can be made more symmetrical between buyer and seller via Katalyst, these two parties can then transact together with a peace of mind.
Reason #3: Perception of Unfairness
Scenario: Take for instance an employee working for a wage. Assume that he is paid $30/hour.
If he enters office at 10am and works till 6pm, he will be paid 240$.
However, what if he starts work at 9.50am and works till 6.08pm? It is likely that he will record his timing as working from 10am to 6pm too. This is because if he does the former sort of recording, his colleagues might see him as “desperate for money” or “weird” as this is not a social norm.
He therefore forgoes 18minutes worth of hourly salary every day, which is $9 every day.
Imagine this as the scenario for a month. He then forgoes 22*9= $198, which is no small sum as a percentage of his total salary.
How Katalyst Solves This Issue:
Katalyst as a protocol records the IN-OUT time right to the seconds. The actual time spent right down to the seconds can then be tabulated and a truly fair wage can then be paid to the employee.
The very design of Katalyst protocol and the KatalystCoin therefore make time and money fungible.
This record is immutable, transparent and automated. Doing this will then minimise the dispute between employer and employee, and also benefit the employee more.
The Parting Analysis: Towards A More Humane Society
Before blockchain technology, social scientists thought that one way to increase societal welfare and expedite the exchange of value is to encourage people to trust each other more. Value here is not restricted to financial value and can be broadly defined as social, capital, cultural or experimental value too.
This is why we have professionals “relationship managers” hired specially to cultivate relationships with clients. In spite of this however, human beings are not perfect and do make mistakes.
This therefore commonly results in double standards as people judge themselves for not trusting people more. This becomes why most people have grown to not frankly what they think, because they fear being judged as a person who is not nice. They also fear being judged as too cynical, too jaded or too pessimistic.
Human beings want to be liked and accepted socially. As a result, they may not always articulate their boundaries, expectations and conditions in every interaction. Since business is also a social interaction, certain bad habits and unsaid expectations may be carried over as well, which may well result in severe miscommunication and unmet expectations.
With blockchain technology and our Katalyst protocol, many things can now be recorded and made undisputed. We now do not need to trust any middlemen, or even the parties directly involved. Parties involved in any economic transactions can finally focus on what is written and entered onto the blockchain at a certain date and time.
In the event of disputes, we can finally avoid the case of “he said, she said”, and base our economic transactions on what is verifiable and non-editable once a contract is entered by two parties. If a party doesn’t fulfil his share of the promise, the other party doesn’t get paid.
Contrary to the belief that this will make people even more transactional, our team posits the direct opposite. Our katalyst protocol actually makes people more consistent and humane, without having to deal with double standards while getting things done.
This is fundamentally because a verifiable and immutable record allow people to set boundaries and articulate previously unspoken expectations. It is not just sufficient to have good intentions in any project–execution matters, and clarity of instructions matter too. Blockchain secures the execution aspect and allows the preservation of great business relationships by making communication clear and verifiable.
We hope you have enjoyed the post today! We love to hear from you–Feel Free to leave a comment.