So Wikipedia has the following rather limited definition of intermediation.
Intermediation involves the "matching" of lenders with savings to borrowers who need money by an agent or third party, such as a bank.[1]
If this matching is successful, the lender obtains a positive rate of return, the borrower receives a return for risk taking and entrepreneurship and the banker receives a return for making the successful match.[1] If the borrower's speculative play with the funds provided by the bank does not pay off, the bank can face significant losses on its loan portfolio,[1]and if the bank fails its depositors can lose some of their money if the deposits are not insured by a third party.In fact with vision, and vision is needed here we need to expand the concept of intermediation to just about any scenario you can think of where there is an actor interposed between step 1 and step 3. So ingrained in us are conventional concepts of human work - most scenarios will not even look like intermediation - they only become so when digital technologies offer new possibilities.
So let us illustrate the concept.
Figure 1.
This gives us a basic template to see what happens when we change the dynamics of the economy.
At the highest level we can observe what happens to entire 'industry complexes' when a digital substitute marketplace is created.
Figure 2.
Pre-2000 there was a substantial industry constructed around music - agents, labels, studios, physical media manufacturing (records, tapes and then CDs) and then the retailers.
However, along came napster and later iTunes and what have we got left.
Fig 3.
What we see here is that Apple iTunes has dis-intermediated the music industry and re-intermediated music as well. It now offers a direct route for artists and traditional music industry operations must go through it to get to the customers. This process has dramatically shrunk the tradition commercial music complex.
Now we can apply this to any example. For example a worker driving a truck. Pre-2000 this idea that the driver is an intermediation point would be treated as complete nonsense - now not so much.
Fig 4.
Fig 5.
We can now move to a scenario when mining companies can dis-intermediate this value chain.
This may look dramatic and that is the point. This logic of dis-intermediation and re-intermediation is intrinsic to digital technologies and we had better start designing data around this concept to understand it better.
