The Sharing Economy is by no means a new concept. In 2018, we have been living with this concept for some time, but what does the sharing economy mean?
Simply put, it’s typically a web or app-based platform that connects you to a lease or hire of either products or services, by the week or even by the hour. Sometimes it can be free, but typically, there is a fee.
For those that are borrowing, there is a potential saving in borrowing an item that might only be required once, instead of paying more money upfront. Then for those that are happy to share their stuff, this can enable them to make a decent additional income on the side, increasing their earning potential.
As well as your standard rental companies, some switched on tech companies have created platforms that facilitate sharing between individuals. As the sharing economy is in its early-ish stages, we probably don’t appreciate just how many companies have staked into this industry, but two of the biggest players in the current market is Air BnB, and the cab-hailing service, Uber.
Now Blockchain technology is making it possible to earn money by sharing a whole new set of assets, such as computer power, storage capacity, and even personal data. Because many of us own computers, a higher number of people can participate. Companies in these marketplaces handle payments via smart contracts and also Blockchain technology. This significantly reduces costs, improves trust and transparency, and most importantly simplifies transactions at a global scale by making them almost instantly, regardless of the digital volume.
The potential for the sharing economy extends beyond accommodation and travel, and hundreds or maybe even thousands of platforms have been launched. If you need to borrow something, there is usually an easy way to do it. Perhaps you live in the city and miss not having a garden? Or you enjoy swapping books, or need to borrow DIY tools? The possibilities are potentially endless.
Some entrepreneurs firmly believe that Blockchain technology could help eliminate some of the issues the sharing economy face today. How so? Well, a Blockchain ledger, for example, could secure transactions and make it difficult to tamper with, which keeps complex information about who owns what assets (and who is using them) stored on a universal portal or database. Traditional centralized solutions are prone to hacking, and many have had instances of significant data breaches.
Unfortunately, the traditional sharing economy isn’t without its flaws. It often can command high fees for using such a platform, which can financially hurt individual users but can also benefit the underlying corporation. Typically in these situations, the User will take a backseat with priorities and responsibilities, and sadly some companies have abused their power, getting access to private data without customers knowing.
In order to overcome these issues, several companies are developing Blockchain based sharing economy platforms. In essence, these platforms severely limit, sometimes completely cut out, the need for an intermediary. This allows peer-to-peer interactions, eliminating the 25–30% transaction fees that come with centralized platforms. Because all transactions are logged on block chains, all users can audit the network’s operations.
With the right application, a Block Chain company could reduce fragmentation in the economy by making it possible to rent or lease pretty much any asset you can think of, all on one platform. A customer would be able to borrow anything they wish with a single account and pay someone instantly with dedicated Cryptocurrency.
Blockchain technology also protects users on a legal basis, especially when there is a cause for dispute. The smart contract technology can provide an almost arbitration type service. For example, if you owned an autonomous car and rented it out for extra income, the smart technology would ensure whoever was renting make payments as needed without involving a third party to oversee the transaction. Also if there was a dispute for any reason, the technology can analyze it’s highly accurate and rich data and offer a just and transparent settlement.
The sharing economy also will empower the software industry, by driving innovation, turning hard work into equity, and sharing ideas. Much of that growth will come in the form of Software as a Service (SaaS) applications, as well as Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) technologies.
Sharing economy has also spread to software development in the field of crowdsourcing. By using crowdsourcing, companies often share the same developers, as the development projects are presented at a software development portal. Developers from all over offer their help to solve the tasks. Sharing economy focuses on sharing both human and physical resources, and you can compare it to hiring a freelancer, who you also share with other companies.
The sharing economy certainly isn’t going anywhere anytime soon. It is predicted to grow from $14billion in 2014 to $334billion by the year 2025. How accurate is that? Well, the projections are based on the successes and growth of existing services, as well as the anticipation of new industries in the collaborative service ring.
What does that mean for businesses? Mostly, it means that the most successful future businesses will need to be adaptive to remain current or relevant, and they will certainly need to focus on giving authentic experiences, that are personalized.
These are a few of the Blockchain-based platforms that are supporting the sharing economy and improving on its most glaring weaknesses. Since the housing rental market is the highest stakes component of the sharing economy, it’s important that these platforms emerge to help renters and landlords function with reciprocity and trust.
Like the sharing economy, the blockchain is still at infancy stage to some degree, and its capabilities are becoming more renown as its use cases become more evident. Practically speaking, each of these trends finds their best expression in collaboration with one another. The blockchain needs industry improvement, and the sharing economy is desperate for better technology to enhance the movements functionality.