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Why Blockchain Is The Future Of The Sharing Economy
Omri Barzilay and Forbes
Posted on 2017–08–15
Everyone’s talking about blockchain, but you’re still not entirely sure what it is, don’t worry, you’re not alone. It’s something that Jack Dorsey, the CEO and chairman of Square and CEO of Twitter, described this week as the “next big unlock,” and something that, according to Dorsey, is normally applied to accounting terms but has the potential to “be applied to so much more.”
Enter the sharing economy. The sharing economy burst into our lives as a big promise during the 2008 recession with an initial wave of investor enthusiasm and a number of “sharing” startups such as Uber and Airbnb. However, many others failed to ride the trend.
These days, the sharing economy feels a bit past its prime. “The ‘Sharing Economy’ is Dead,” Fast Company declared two years ago, summarizing a general sense of fatigue with what now feels like a wildly overhyped idea. But, according to many, the fusion of blockchain and the sharing economy may create a revolution that will transform our economy and share the wealth beyond certain companies and individuals.
Smart contracts help to unbundle ownership
Blockchain can help energize and unlock the sharing economy by making it cheaper to create and operate an online platform. For example, transactions could be coordinated by self-executing smart contracts or performed at lower cost by other small competing providers. The next phase of the sharing economy can emphasize today’s inequalities or ease them, depending on the purpose of the technology itself.
Basically, blockchain is a different way of keeping track of a normative set of information, instead of storing the information in one central location — the county records office, say, or Airbnb’s database — blockchain makes multiple copies and distributes them across all the nodes of a network. These nodes don’t have to be people, they can be things. This is what makes blockchain a potentially powerful accelerant of the sharing economy as it gives a property the ability to know who its owner is.
Anything with an internet connection can hook up to a blockchain, which means anything with an internet connection can have a perfect record of who owns what. So let’s say I rent out my house, like I would on AirBnb. By utilizing blockchain technology, I could program my front door to open only when a person reserved it, and automatically pay me, and lock the door, once he leaves the property.
MyBit, the blockchain powered platform connecting investors to future-proof projects, is a good example to a company that utilizes this idea. The company’s vision is to democratize the ownership of machines and its resulting revenue streams instead of letting them fall into the control of centralized financial institutions. The platform will be applicable to drones, self-driving cars, smart homes, autonomous machinery, 3D printers and more.
The increasing need for clean energy has influenced the platform to choose solar panels and energy generation as its first initiative. Through its initiative, MyBit is presently on a mission to accelerate the adoption of decentralized grid among the masses.
The decentralized grid system proposed by the company involves many microgrids — small, discrete energy systems with distributed energy sources and loads capable of operating independently of central grids. In addition to being self-sufficient, these microgrids can also sell excess energy to the central grid or on the open energy market. However, setting up one’s own microgrid at the moment is quite hard due to increased cost inputs, a challenge which MyBit is solving by connecting those interested in implementing solar projects with investors who are willing to fund such revenue generating assets.
Slock.it, which recently secured $2M in seed funding, is another example of a company who is trying to shake up the sharing economy by enabling both companies and individuals to rent, sell or share any connected smart object. Since its inception in November 2015, Slock.it’s mission has beento develop Universal Sharing Network, or “USN”. Build on top of the public Ethereum Blockchain, the USN will provide users a set of mobile and desktop applications to find, locate, rent and control any object mediated by smart contracts, from anywhere in the world.
These companies are making the early attempts to take the sharing economy to its next stage. While it will probably take a few years for these solutions to be commonly used, it is clear that blockchain has the potential to deliver on the big shared economy promise.