Chronobank LaborX: open source recruitment
Like the Ethereum network on which it is built, LaborX is open source. This means that anyone could copy and modify it for their own purposes, undermining its value. However,
this is unlikely due to network effect and the additional, external value being added to the platform.
This is an important and deliberate decision made by ChronoBank, and one made on both a practical and ideological level. Our goal is to disintermediate the recruitment industry, removing the middlemen and the points of control (and failure) that make it so inefficient. The status quo is preserved through obscurity, gatekeepers and the artificial barriers to entry they pose. Transparency in our core software is our answer to these issues and a key element of our approach.
Moreover, open sourcing software comes with more tangible benefits. Our code can be and routinely is audited by anyone, enabling bugs to be located and patched extremely fast. Exploits that could severely damage a closed-source software product are taken out of play almost immediately.
But open sourcing software comes with a risk. Anyone can copy LaborX and create their own competition for ChronoBank by setting up their own decentralised recruitment agency. However, the odds of this succeeding are low, and any resulting threat to ChronoBank even lower.
The most obvious reason for this is network effect. A system like LaborX is only as valuable as its network. In the long term, the price of TIME will depend on real economic activity within LaborX. Without that activity, the network is worthless and will be reflected in the price of the token. Being first to market gives ChronoBank a headstart over any competition. Once it’s established, it makes more sense for workers and clients to use LaborX than a new system that doesn’t have any users. Network effect is the reason that people use Facebook rather than a new social network that offers much the same functionality: everyone is already on Facebook, and no one is on the new platform.
The clearest analogy for this is bitcoin itself. Bitcoin launched in 2009 and is still around five times larger than the next biggest cryptocurrency — which happens to be Ethereum, which cannot directly be compared in any case since it’s a smart contracts platform rather than a currency and store of value. Bitcoin is an order of magnitude larger than the next largest currency, DASH, despite the fact that DASH has had three years to make its mark and offers functionality that bitcoin does not.
Similarly, Ethereum is the first and largest smart contracts platform, launched in the autumn of 2015. Other smart contracts platforms are in their infancy, struggling to gain any real traction. Even Ethereum Classic, the result of the fork in the aftermath of The DAO exploit, which offers identical functionality, is a fraction of its size. Being first and being largest tend to correlate. It’s not impossible, but it takes a lot to dethrone the winner of the network effect competition.
A part of gaining this early foothold in the market and establishing even greater network effect is the partnerships that ChronoBank is actively forging. Bringing the workforce of Edway Labour Hire to LaborX, and partnering with other labour-hire organisations in the opening stages of the project, is something that few other companies would be able to do. The greater the labour force represented on LaborX, the more new workers and employers will want to use it. It’s a virtuous cycle.
There is the possibility that a new business could fork LaborX and partner with other labour hire organisations. If that occurred, it still would not be a problem. The market for decentralised labour-hire organisations is in its infancy. The real competition does not come from another version of LaborX, but from traditional, centralised recruitment agencies — just as the real competition for cryptocurrency comes from fiat money, not from other virtual currencies. In both cases, there’s plenty of room for growth.
For more information visit www.ChronoBank.io