How Blockchain Technology is Accelerating the Sharing Economy

The sharing economy has taken the world by storm over the last few decades, as companies continue to allow users to generate value within their platforms. For example, Airbnb has disrupted the tourism industry by enabling users to share their homes as accommodation. Uber has overthrown the taxi industry, giving users the opportunity to provide rides using their own vehicles. 

Despite the rise in this sharing economy that has seen companies move away from having large centralised operations, many pain points still exist within this ‘sharing’ economic model that blockchain technology can help solve, including privacy, trust, and transparency.

Decentralisation is the Way Forward

Even though DeFi has only taken the world by storm in the last few years, blockchain technology has already been around for a decade. As it continues to become rapidly adopted in today’s world, businesses in the banking and tech worlds have already started integrating blockchain technology, using it for a plethora of applications from recording payments to counting votes.

Within the sharing economy, some companies have already begun to adopt blockchain technology. For example, ShareRing is creating an ecosystem for the rental economy. Any business or individual that rents goods or services can use its platform, which is built on a blockchain.

Previously, users would have these files saved to desktop computers without any sort of security, making them an easy target for criminal activity. With blockchain technology, the mobile platform allows every transaction to be secure, and users’ identities can be checked and authorized before a rental agreement takes place. In addition, rental providers receive payment instantly, without any currency conversion fees, according to the company’s website.

Peer-to-peer

Another way that blockchain technology can help is by running software in a secure and decentralised way. This means that software applications can’t be deployed by a centralised server, but instead by a peer-to-peer network that isn’t controlled by a single party. For instance, Akasha, Steem.io, or Synereo are distributed social networks that operate like Facebook except without a central platform. 

As the next step forward in today’s economy, sharing economies are now moving towards decentralised frameworks for the trust and transparency benefits that blockchain offers. Instead of a centralised organization managing and having control over which content is displayed to its userbase, decentralised social media platforms have a decentralised foundation, aggregating groups of peers who abide by a set of code-based rules based on the blockchain. 

Blockchain benefits

OpenBazaar is an example of a decentralised marketplace based on the blockchain. The platform is similar to eBay or Amazon but operates independently of any intermediary operator. OpenBazaar uses blockchain technology to ensure that buyers and sellers can interact directly with one another, without passing through any centralised middleman. 

Anyone is free to register a product on OpenBazaar’s platform, which will become visible to all users connected to the network. Once a buyer agrees to the price for that product, an escrow account is created on the bitcoin blockchain that requires two out of three people to agree for the funds to be released. Once the buyer has sent the payment to the account, the seller ships the product. After receiving the product, the buyer releases the funds from the escrow account. Only if there is an issue between the two does the system require the intervention of a third party to decide whether to release the payment to the seller or whether to return the money to the buyer.

Decentralised carpooling platforms, such as Lazooz or ArcadeCity, which operate much like Uber, but without a centralised operator have also emerged. These platforms are governed only by the code deployed on a blockchain-based infrastructure, which is designed to govern peer-to-peer interactions between drivers and users. They rely on a blockchain to reward drivers contributing to the platform with specially designed tokens that represent a share in the platform. The more a driver contributes to the network, the more they will be able to benefit from the success of that platform, and the greater their influence in the governance of that organization.

World Mobile

Currently rolling out its technology across Africa and the world, another company making the most of the decentralised movement is World Mobile. The company’s dynamic network strives to connect those that traditional networks have left offline.

World Mobile aims to provide subscribers across the world with access to the internet in an affordable, fair, and sustainable manner, especially in nations within Africa. Its self-governed and decentralised technology will allow users to connect without jeopardizing their privacy. 

Subscribers can own their own data and have their own identity so they can access services they were previously excluded from like banking, insurance, borrowing, and saving, all while having the security, trust, and transparency of blockchain technology. Perhaps most importantly, though, is World Mobile’s new sharing economy model, which concentrates on minimizing the significant operational cost constraints faced by current operators.

Responsibility for operating and maintaining parts of the network is shared with communities and local businesses, which significantly reduces the operational costs of the business. World Mobile’s design brings distribution and decentralisation of nodes on the network to deliver more rapid growth and more efficient allocation of network resources throughout. 

“The creation of this sharing economy enables lower operational costs and more efficient allocation of resources. Moreover, the distributed nature of a token-based sharing economy makes the model highly scalable from a deployment perspective,” the company explains in its whitepaper.

The potential for blockchain technology is enormous; it can be applied to nearly any business or industry, especially those with digital assets or where transactions occur digitally. Not only does blockchain improve efficiency and scalability, but it also enhances security tremendously. As a result, the once-monopolizing tech giants are now being slowly disrupted by a new set of companies that embrace the transparency and trust of blockchain technology. 

Companies like World Mobile are letting the growth of the network be driven by the demand of communities that need access, rather than relying on a centralised network operator to analyze the capacity and demand requirements of the network.