Will blockchain technology and smart contracts steal human jobs?

Bitcoin's underlying blockchain technology has expanded from being just a ledger that records all transactions that occur on the network to a technology that is widely adopted by various industries. Smart contracts based on blockchain technology can be used to automate various processes across industries.

The main application of blockchain technology is currently in the banking and finance industry, which involves a lot of time-consuming and repetitive processes. By creating smart contracts, which are written to automatically execute certain processes when certain prerequisites are met, a lot of time and human resources can be saved. Automation can save these institutions a lot of money. However, there are many concerns about the impact of increased automation. Some people worry that the use of smart contracts in the banking and finance industry may lead to the loss of jobs.

Smart contracts and industrial robots

The impact of increased automation on the banking and finance sector can be compared to a similar scenario in the manufacturing sector. Surveys on the impact of increased automation on industry jobs and opportunities report no significant changes so far. However, a study of the impact of industrial robots on employment in 17 countries from 1993 to 2007 showed a slight increase in overall wages due to increased automation.

According to one report, using software robots to interact with a company's back-office systems can cost the company $2.70 per hour. But unlike humans assigned to do the same job, these software robots can operate day and night and process large amounts of data. Another report by Tata Consultancy Services said that using automated systems to maintain a company's financial systems can increase productivity by more than 90% with 100% accuracy. The report also said that automating the insurance industry's claims verification process with robots can reduce transaction processing time by nearly 80%.

Any form of automation, whether it is robotic process automation using software programs or smart contracts for the automatic execution of trade settlements and other financial operations, cannot replace customer-facing operations. In addition, increased automation in various industries has led to an increase in employment opportunities due to the need to monitor and maintain these systems.

By drawing parallels between automation achieved using industrial robots, software programs, and smart contracts, we can conclude that the impact of blockchain technology on employment may not be significant. However, there will be a significant change in the job profile of the future. If today’s financial sector employees want to remain employed when this happens, they should keep up with the changes in technology and improve their skills.