The so-called “sharing economy” is where people share items or services, typically online. Using various apps and software, it’s possible to rent things for a day, for a week—or for some minutes. But what has this got to do with blockchain technology? Let’s dig deeper.
What is the sharing economy?
You can borrow or share different items—from cars to houses to pet dogs—from/with other people because of the sharing economy.
If you are the borrower, you can save a lot of time and money. It’s cheaper and easier when compared with merely buying a brand-new item you may only have to use once.
As for the ones willing to share their stuff, they can a decent amount income on the side, bolstering their usual earnings.
Tech-savvy companies and conventional businesses have already launched various programs to tap into the potentials of the sharing economy. Though the industry is still relatively young, we’re already aware of some of the biggest names making waves in it—we got Uber for ride-sharing and Airbnb for accommodations.
Advantages of the Sharing Economy
There are several obvious advantages one can enjoy with the sharing economy.
For one, it’s environmentally friendly as we are lowering our individual consumption and pooling it together in one go—yes, we’re talking about cars. Imagine: instead of 5 people each owning a car which they use occasionally, we got one person who’s willing to lend his wheels for the people to hitch a ride together. This can dramatically lower carbon dioxide emissions.
Moreover, the sharing economy can bring people closer to each other. For instance, if you have pets but you can’t have one of your own, you can strike up a deal with a dog owner and that cute Chihuahua. Enjoy some walks in the park without having to be the owner of that bulldog full-time.
Where does blockchain enter the picture?
The blockchain technology can shake up the sharing economy. Many businessmen and entrepreneurs believe that the blockchain can get rid of the problems that hold back the sharing economy.
An example of such problems is the trust element. It’s quite a tall order to entrust someone your house or your beloved pug if you’ve only met him or her. Apps usually address this problem through rating systems that basically tell you how trustworthy the other person is.
Also, the sharing economy is currently fragmented, meaning you have to use the service of a different company and app every time you want to borrow something.
Circling back to blockchain, the public ledger can make more secure transactions, which will also be difficult to tamper with. This also enables in-depth analysis of the details about assets and who is using them—all stored in a public database.
Smart contracts can also get rid of middlemen and therefore reduce the commission fees one has to shoulder every transaction.
Some companies are also making fresh efforts to make it possible to rent or lease virtually any asset on a single platform. Customers would be able to borrow almost anything using just one account, paying the other person using one cryptocurrency.