Sharing is as innate to humans as eating or sleeping.
This built-in instinct dates back millions of years to the good ol’ days when we used to hunt in groups and share the woolly mammoth we caught with our community.
This idea of working together and sharing our skills to benefit the group has allowed us to thrive and evolve as a species.
But in recent years, sharing has taken on a different meaning.
We no longer need to hunt in packs and pool our resources together to survive. Instead, we share what we do have with the people that don’t have access to them.
For example, we rent out our houses on Airbnb so travelers have somewhere to stay, and we give people lifts in our cars for money when they don’t have access to a ride (hey, Uber!).
This form of sharing gives us access to assets and services at a fraction of the cost of buying them, while owners and providers can make some money while they’re at it.
Known as the sharing economy, this way of offering services is a huge development in the online and offline world. Also dubbed “collaborative consumption” or the “collaborative economy”, it typically uses marketplaces to match people up with providers that can offer them what they need.
In a way this transition was inevitable.
Over the last two decades, the economy has been slowly creeping away from the traditional model of centralized organizations where one operator held all the power and the consumers were simply passive receptacles.
Now, those large operators are starting to aggregate the services of numerous people and the platforms are geared towards a more active group of consumers.
The Biggest Barriers of the Sharing Economy
Despite its quick evolution, the sharing economy faces struggles just like any other industry, with credit cards creating quite a large sticking point.
You’d think that cards would be ideal for the tap-and-go nature of the sharing economy, but they aren’t the safest method of payment. In fact, credit cards regularly face security issues and they actually aren’t robust enough to handle the new flexible payment models that keep cropping up.
Sure, tools like Stripe have made it easier, but payments are still a sore point when it comes to the sharing economy.
It’s not all sunshine and rainbows for the service providers, either.
Despite the marketplace model encouraging the distribution of value around everyone involved, it’s not quite there yet. At the moment, the profits are collected by the operators of the platform rather than those who have contributed (whether that’s by lending their car, renting a room out in their house, or providing a freelance service).
And then there’s the struggle with timeframes.
Sometimes it’s easy and someone wants to rent a room for one night, or a web developer needs to hire a copywriter for four hours’ work, but what happens when we get down to minutes or things that can’t be measured with time, like the fast-charge of an electric car?
There are some operators that have started taking into account the time-based nature of some sharing economy services.
For example, there’s a car rental company that rents cars by the minute and puts those charges onto a credit card, but it’s likely we’ll see more of this happening over the next couple of years.
How Cryptocurrency and the Blockchain Will Solve Sharing Economy Struggles
Blockchain lends itself perfectly to the sharing economy because it works in a decentralized manner; that is, there is not one singular operator that’s in charge.
Applications run through the blockchain can be pushed through a peer-to-peer network that isn’t controlled by an intermediary — or anyone, really.
The applications can then be used to coordinate and match up the activities of huge groups of people at once who can organize themselves through directly communicating with one another.
While this format shares many traits with the crowd-sourcing model, it shouldn’t be confused with it. With crowd-sourcing, users contribute to a platform but they don’t get anything in return if that platform is successful.
Blockchain, on the other hand, provides a more cooperative and collaborative way to share the love. Users on applications that run through the blockchain are both contributors and shareholders of the platforms.
This means there’s often a built-in motivation from providers to see a platform do well because they get rewarded.
What Might This Look Like in Reality?
Let’s use an example of a decentralized eCommerce marketplace. We’re talking something like Amazon or eBay, but that operates without an intermediary operator.
The platform itself uses blockchain technology to give buyers and sellers the opportunity to interact directly with each other (with no middleman in sight!).
Anyone can share a product which, when registered, will appear on the network for everyone else to see. Then, as soon as a buyer wants in, an escrow account is created on the blockchain that requires two out of three people (that’s the buyer, the seller, and a third-party arbitrator) to agree to the funds being released.
And voila! Once the money has been sorted, the seller can send the product straight to the buyer.
The Sharing Economy is Still in the Early Stages
Apps like Uber and Airbnb are still relatively new in the great scheme of things. Though they are incredibly successful and popular now, that might all change overnight if something new and shiny crops up that gives consumers a better option.
But, it’s safe to say that, for now, the sharing economy is here to stay. The convenience of hiring something for a minute, hour, day, or week instead of buying it outright is a massive positive in the now, now, now culture we’re currently living in.
And, with the blockchain becoming more and more robust by the day, it’s easy to see how it could turn the sharing economy into a decentralized space that rewards all of its valuable contributors.
It won’t happen overnight, though.
But what it will do in the meantime is provide us with a new way to think about ownership while fostering the growth of peer-to-peer marketplaces.
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Written by: Lizzie Davey
