Blockchain is an essential part of today’s digital world. During the 2008 recession, the sharing economy emerged with investors enthusiastically supporting companies like Uber and Airbnb. Today, these companies are considered unicorns, spearheading the way in their respective industries and revolutionizing the way people use and experience everyday services.
In 2009, Twitter’s CEO Jack Dorsey called blockchain the wave of the future. Since then, critics have called the sharing economy dead. But that’s far from the truth. The sharing economy has faced limitations in the past. According to the Harvard Business Review, a major problem with the model is that the value produced by the crowd is not equally distributed among all those who have contributed to the value of production; all profits are given to large intermediaries who operate the platforms. However, the implementation of blockchain could help our economy thrive better than ever before, spreading the wealth beyond private companies and individuals.
Blockchain’s Smart Benefits
Blockchain helps stimulate and makes the sharing economy more accessible. By offering cheaper ways to create and operate online platforms, more people can participate in this type of economy. For instance, transactions may be coordinated through self-executing smart contracts or offered at lower costs by small, competing providers or freelancers. As the sharing economy becomes more streamlined in the future, we can emphasize the everyday inequalities that users experience and strive to solve them, depending on the technology.
Blockchain is a normal way to track a set of information, but instead of storing that data in one central place, the tool makes multiple copies and distributes across each node of its network. Nodes can be people or things like devices. In essence, it helps accelerate the sharing economy because it gives a property to identify the owner. Any device that has Internet connection can connect to blockchain, showing a clean record of who owns the currency or item. Using this online record, users can use blockchain to create value and empowerment for users. For example, you can use blockchain to rent out your house on Airbnb, you can use the technology to program the front door to open when a renter reserves it and lock the door behind them when they leave.
Many startups are harnessing blockchain’s power. MyBit uses it to power its platform which connects investors to viable projects.
The company’s goal is to democratize the ownership of machines and its revenue streams, redistributing value to those who own the operations rather than centralized financial institutions. Other companies like OpenBazaar offer a decentralized marketplace, like eBay, operating independently of intermediaries. Buyers and sellers use blockchain technology to interact directly with each other, without passing through a centralized operator. Users can register a product for free and it’s instantly visible to all other users in the network. When a buyer agrees to purchase the product, an escrow account is created a three-party system (buyer, seller and third-party arbitrator) allows for the funds to be released. If an issue occurs, the third party decides whether the object should be returned to the seller or if the buyer is owed a reimbursement.
Slock.it is another example of a startup that is shaking up the sharing economy, allowing companies and individual users to rent, sell or share their connected smart devices. Their goal is to create a universal sharing network (USN) which can give its users mobile and desktop applications to find, locate and rent any object via smart contracts.
Blockchain is important for the way we do business and live in the future. It has the power to take the sharing economy to the next stage, empowering us to live on our own terms at the press of a button. While these technologies are slowly being popularized, it has the ability to deliver on the promise of a more equitable, connected society.