Blockchained Society — Part 5: The Future of Airbnbs and Real Estate
Blockchained Society is a series of articles about some practical use-cases of blockchain technology (and others). For every article, we zoom in on ONE possible application of the technology and try to envision how it would change society as we know it, through storytelling and hand-drawn illustrations. We publish a new one every week, so stay tuned by following me on Medium! Text by Deniz Yilmaz, illustrations by Niels Sinke. [DUTCH VERSION HERE]
PART 1 | PART 2 | PART 3 | PART 4 | PART 5 | PART 6
Meet Tom; a 26-year old from the Dutch city of Rotterdam. He’s sitting behind his laptop, frantically pointing and swiping at the screen with his girlfriend sitting besides him. They are looking for a holiday home on the Dutch island of Vlieland, since they both have a few days off work next month and could use an escape of daily life.
Tom’s girlfriend wanted to use the popular Aircnc platform to find a property to stay in, but Tom had someone recommend him a new platform called CryptoCribs. According to his friend, the CryptoCribs platform is fully decentralized, way cheaper than Aircnc and is quickly gaining new listing all over the world. Tom has been using Aircnc for years, but has had a lot of bad experiences with the platform. He likes the concept of decentralized platforms, so he’s determined to find a holiday home on CryptoCribs.
Cryptocribs is a fully decentralized, blockchain-based marketplace for leasing and renting real estate, such as apartments and holiday homes. Up until now, there were no decentralized alternatives to services like Aircnc. Such platforms connect supply and demand — just like Cryptocribs — but are charging hefty fees and provide very little transparency towards renters, rentees and governmental bodies. Platforms like Aircnc are often scoffed in the media for turning cities into tourist traps and investor-valhallas. Cryptocribs is a so-called DAO, which stands for Decentralized Autonomous Organization. The company completely runs itself, based on hard-coded rules in so-called “smart contracts” that are hosted on the Ethereum blockchain, which is like a global supercomputer. This enables extreme transparency and efficiency, unlike anything we’ve ever seen.
Using the Cryptocribs platform is easy; Tom didn’t need to create an account since the platform uses his (blockchain-based) digital ID. Since Cryptocribs doesn’t store any privacy-sensitive data, there’s no need for Tom to worry about his privacy.
Tom proceeds to fill out some search terms and filters, upon which the Cryptocribs algoritm serves him a personalized selection of listings on the platform. The selection is based on Tom’s personal profile — provided through his digital ID — and also his reputation on the platform. His reputation is quite limited since he just started using the platform, but there are still loads of holiday homes left to choose.
Cryptocribs leverages the blockchain-based digital identity system, launched by the Dutch government earlier this year. Instead of asking for personal data and storing it on their own database, the platform actually requests access to the digital identity of the user, which is represented by a unique entry on the Ethereum blockchain. One single source of truth, controlled by the user! This enables interesting features, since there’s no need to worry about privacy and safety of sensitive personal data.
Using Cryptocribs requires full transparency from both the renter and the rentee. The platform features a two-way reputation score, based on anonymous ratings on the platform and information related to their digital ID (such as criminal record and debt). Ratings are handled through blockchain technology, which prevents fraud and censorship. In this example, the Cryptocribs algoritm uses Tom’s reputation and profile to generate a selection of relevant listings. People with a higher reputation get access to more listings.
Tom is impressed by the ease of use, but also by the low prices of the listings. Tom’s girlfriend noticed that most houses and apartments on the platform don’t have single owners; some of the listings even have more than 40 owners from all over the country!
After a few minutes of browsing (and arguing about) listings, Tom and his girlfriend made their decision. They found a tiny bungalow near the water that suited their preferences and budget. The bungalow has six owners, seemingly unrelated and spread out across the country.
The booking process was smooth sailing; a downpayment was automatically paid from Tom’s cryptocurrency wallet and a deposit was locked in. A custom-built insurance was also automatically purchased, based on Tom’s personal profile and the property booked. The price of the insurance is also based on Tom’s reputation. Everything — from payment to returning the deposit to creating insurance claims for possible damages — will be handled fully automatic and trustless.
Blockchain technology brought real estate to the masses. Years ago, you needed some serious capital in order to own real estate and profit from it. Blockchain technology enabled us to divide ownership of real estate — such as apartments — and divide costs and revenue between people who never ever met each other. These days even students can buy and own tiny pieces of real estate and harvest the financial returns; no need for huge personal wealth or complicated legal matters!
Fast-forward a few weeks; Tom and his girlfriend are on their way to the island of Vlieland for a few days of vacationing. Upon arriving at the bungalow, Tom used the RFID chip in his phone to unlock the door of the property; the door unlocks because Tom’s personal ID matches the Cryptocribs booking data entry on the blockchain. Let the two-day holiday begin! The next two days will be filled with wine, good food, bicycle trips and walks on the beach.
What about the checkout process? Usage of electricity and water will automatically be paid for upon checking out; these days almost everything is using micropayments to enable “pay-per-use” systems. The rent will also be automatically paid and distributed amongst the owners of the bungalow.
Blockchain technology will enable the creation of DAO’s; self-governing organizations, platforms and services that provide a more efficient and transparent alternative to companies that are currently monetizing the so-called “sharing economy”. Platforms like Airbnb will be replaced by true peer-to-peer platforms that truly serve their users and are in harmony and compliant with their context. Blockchain will provide us with a global and decentralized infrastructure in order to create a new sharing economy; truly peer-to-peer, as it should be!
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All illustrations hand-drawn by the amazing Niels Sinke! Check out his work on his website and Instagram.
Some interesting projects regarding this subject: Rentberry project | Slock.it project | Cryptocribs project