Ever since the value of Bitcoin skyrocketed in 2017, many established companies from various sectors have started to sit up and take notice of the everyday occurrences in the world of cryptocurrency and blockchain.
Even a few well-known names, such as Subway and Expedia, are already starting to accept cryptocurrencies as a form of payment. Others, such as Salesforce, are looking into how blockchain can help reshape and improve existing business models in areas such as security and customer experience.
Certain businesses and sectors will be in a better position to adapt quickly to blockchain technology than others. One area that currently appears to be clearly positioned to benefit from the advantages of blockchain is the sharing economy.
The evolution of the sharing economy
The sharing economy entered the collective consciousness with the launch of Airbnb in 2008, followed swiftly by Uber in 2009. Afterward came the hype about how a global sharing economy would enable waste reduction, as individuals banded together in an ever-expanding community to exchange various goods and services such as power tools and bicycles, or even their own spare time to perform household chores.
As utopian as this sounded at the time, it hasn’t quite panned out the way it was originally touted. In fact, Fast Company stated in 2015 that the sharing economy was already dead. However, as of 2018 Airbnb, Uber, Lyft, and others continue to thrive, with no evidence of slowing down.
Regardless, the notion of a global community sharing scarce resources in the spirit of the greater good has not come to fruition either. Instead, a few global players now have a stranglehold on the majority of the market share. Numerous companies that launched based on the hopes of the sharing economy concept have since shut down.
Nevertheless, based on current estimates, by 2025 the global sharing economy is anticipated to reach US$570 billion in transactions in Europe alone.
Can blockchain unblock growth in the sharing economy?
Blockchain is being increasingly recognized as a solution to some of the problems facing the sharing economy. Below is an overview of these problems and how blockchain might serve as a solution.
Today, users in the sharing economy are subjected to several fees, both direct and indirect. In the case of Airbnb, fees are levied on the host renting out an apartment or room, as well as on the guests during the booking. In contrast, blockchain-based networks are tied to fewer overheads; that is, they can allow for such operations to be run at a reduced cost.
In addition, users transacting in more than one currency may incur exchange fees from their bank or credit card provider. Individuals with a credit card linked to a Euro account and renting a room in the United States pay in US dollars, but they incur foreign exchange fees. If such transactions could be executed in a mutually agreed-upon cryptocurrency, it would minimize any indirect fees incurred through a foreign currency exchange.
The current centralized ownership of sharing marketplaces means that both buyers and sellers are subject to the whims of their corporate owners. Should Uber choose to increase its fees for either drivers or passengers, it can do so at any time.
When Airbnb changes its algorithm to prioritize bookings for hosts who allow instant rentals (meaning the hosts have a reduced ability to screen guests), then it can do so without warning. Decentralization of online sharing marketplaces would incorporate rules into blockchain protocols, that is, they cannot simply be changed overnight without consensus.
The sharing economy relies on trust between the buyer and seller. A quick Google search for Airbnb or Uber “horror stories” turns up dozens of detailed personal anecdotes. Most are from users complaining about what amounts to a breach of trust.
The use of smart contracts in blockchain applications enables the ability to hold or release payments only after certain conditions have been met. This trustless execution of the transaction can reduce the level of trust required between the parties involved.
Moreover, blockchain keeps an immutable record of all transactions undertaken by every party. This could improve transparency in allowing both the buyer and seller to review the records of where users have abused the system in any way.
Finally, blockchain allows greater financial security: Data encryption grants users enhanced data protection against the types of cyberattacks Uber has been subjected to in the past.
One ShareRing to rule them all?
ShareRing, an Australian startup, prides itself on all of the mentioned benefits. The company is currently devising an approach to overcome one of the biggest hurdles in the field of cryptocurrency: price volatility.
By using its own ShareLedger blockchain, ShareRing will operate on two currencies:
The first is ShareToken (SHR), which will be the utility token of the ShareRing network. It will be used to reward the node holders running the network, in addition to permitting sellers to buy into the network, so they can market their goods or services in the marketplace.
The second currency, SharePay (SHRP), will be pegged to fiat and be directly tradable for goods and services within the ShareRing network.
ShareRing foresees that any kind of shared goods and services could be marketed and purchased on the network via a smartphone app. Users would have the additional advantage of having to enter their credit card and personal details only once into the app.
The encryption factor, combined with the fact that users only have to share their personal details with a single organization, offers far greater trust and security compared to the current sharing landscape, where users are forced to register with every provider.
ShareRing hopes to become the “Amazon of the sharing economy” by uniting every kind of good or service that can be shared under a single marketplace, for anyone who wishes to buy or sell.
The token presale is currently open, and will close on May
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