BitCar: Decentralized Car Sharing
What I am about to present, you have never seen before.
It is a completely novel concept, way ahead of its time.
I don’t even know if it will ever become real one day.
What you’re about to read is a sneak peak into a completely new world. I hope you have your seatbelt on because we’re in for a crazy ride.
So here it is:
Imagine a world where you can pull out your smart phone and with a few taps, request a driver to come pick you up to drive you to the airport.
Imagine that a few minutes later, a car is waiting in front of your house. You get in, it drives you to the airport, and upon arrival it debits your bank account the predetermined fee.
Wow. Wait a minute. That’s Uber and there is nothing novel about it! Everyone knows about their business model!
I know, I know.
But, what if I told you that the company behind the service you just used doesn’t have a CEO?
It doesn’t have any management. It doesn’t even have a physical address.
What if I told you that this organization, let’s call it BitCar, is fully automated and decentralized?
Welcome to the world of DAOs, also known as Decentralized Autonomous Organizations.
The more technical definitions you can find online describe DAOs as complex smart contracts. In these smart contracts, governance rules are defined from the start.
But simply put, a DAO is a venture that a bunch of interlinked smart contracts manage automatically. To better understand this, let’s look at BitCar.
BitCar is a decentralized Car Sharing application. Every time you use the Bitcar service, you activate a smart contract: the “SilverContract”.
For every mile of the shortest path between your start and end points, you put 1 SilverCarCoin (SCC) into the Bitcar SilverContract.
Then a driver activates the smart contract as well and comes pick you up.
The Bitcar app on your phone tracks your relative distance to the driver’s phone (To make sure you are in their car) and the Car’s position.
Once you arrive the following happens:
- The driver gets 90% of the SilverCarCoins stored in your Bitcar SilverContract
- The remaining 10% are sent to the Bitcar GoldContract
Then the GoldContract splits the SilverCarCoin it contains among all the members of the network, proportionally to the amount of GoldCarCoin they own.
Think of GoldCarCoins (GCC) as profit shares in a company.
Ok, but how do I get GoldCarCoins?
You create and earn a certain amount of GoldCarCoins and SilverCarCoins every time you mine a block of transactions and update the network.
Additionally, you also earn GoldCarCoins every time you submit a code update for the app and the network accepts the update.
As a result, miners and developers not only get SilverCarCoins but also get profit shares for their work. And because these shares are proportional to the amount of GoldCarCoin they own, they need to keep mining to keep their percentage.
Ok, cool beans. But how does this translate back to them green dollar bills?
Well to use the service you need SilverCarCoins, which you can buy from anyone that has some: Driver, Miner, Developper… in exchange of any currency you’d like: Be it Dollars, Euros, Yens, or even other cryptocurrencies.
At Bitcar, no need for a CEO and no need to please parasitic shareholders. Here shareholders have to constantly add value to keep their shares!
Wow this is cool. But what about the engineers that built Bitcar? How are they rewarded?
That, my friend, is when ICOs come in.
See, after the engineers built the decentralized application, they can pre-mine some coins.
To do that, they can create a time-bound smart contract. This contract will give each new account 10 000 000 Silver and Gold CarCoins. The engineers then create accounts, and keep their application secret until the end on the time bound smart contract.
This way they can sell the SilverCarCoins to users and the GoldCarCoins to investors and be rewarded for their hard work.
This sale is what people call an ICO: Initial Coin Offering. The creators of the network sell the coins of their blockchain to people that will either want to use the service, or sell these coins later hoping they increase in value.
BitCar is only one example of how smart contracts and blockchains can be used to create new business models. Smart Contracts and Blockchain technology have the potential to create a more open and democratic world. A world in which the value generated is distributed among those that contributed to its creation.
There is a lot of hype around Blockchain Technology. Some say it will revolutionize the economy, society and the world. While there is some truth behind it, the technology itself will not spark the necessary change.
The revolution will come from innovation in business models. This entails answering questions like:
- What are some problems of the current business models?
- Is blockchain even the right technology to solve these problems?
- How can we use it to create value?
But once all the great innovators out there start picking up momentum, nothing will be able to stop a decentralized world from becoming a reality.
This was the first article of a series that will explore decentralized business models. I hope you enjoyed it and stay tuned for the next ones! Meanwhile, what are some interesting decentralized business models you’ve seen? I would be happy to read from you!