Is Blockchain the saviour of the sharing economy?
The millennials have a new way of doing everything. Simple things like work, employment and ownership are being redefined and the lines separating them are being blurred now. With digitization becoming more normal, sharing online have become easier leading to a societal shift. This and the rising cost of living gave way to the millennials coming up with a fresh perspective for doing business, dubbed the sharing economy.
Consider the example of Airbnb, the online property rental site. Ever since it was introduced, hotels are not the only option to stay at. People can now stay in a spare bedroom in some stranger’s house or camp out on someone’s sofa. And since 2008, the company, which transformed travel has rented out properties over 300 million times. And 11 million+ people across the world have booked and stayed in rooms and apartments belonging to some stranger.
The sharing economy is one of the fastest growing segments of the business world. A report by PWC projects a significant rise in revenues in the shared economy.
The lure of money is a great one! So, when it comes to making some extra money or saving your own money, everyone jumps at the chance. The millennials are no different, in fact, they go a step further and will share or rent out anything and everything. Millennials are more trusting and willing to do business with an online entity when compared to older generations. Things like efficiency, immediacy, transparency, practicality, connection, sustainability and control mean a lot more to millennials than ownership.
Take for example Rent the Runway, you can now rent the coveted yet outrageously priced designer outfit for a special occasion without burning the bank! This online platform allows people to get their own designer outfit for a while at a fraction of the price of buying one. Another example is Neighborgoods, a site which allows people to borrow anything from gardening tools to kitchen appliances from your neighbours.
Businesses which have adopted the sharing economy grant the millennials the ability to fulfil their needs in an inexpensive fashion. These platforms give millennials the choice of either being a provider or receiver. So, the consumer can both rent out a product they own or hire a product that someone else owns. This extracting value from things already owned by someone lowers costs as well as wastage of resources.
But, the issues in the traditional sharing economy space have become roadblocks and navigating in the global marketplace has become increasingly difficult. The lack of trust, transparency, the astronomical service and transaction charges leave the consumer feeling that they are losing value. Thus, stunting the growth of the sector.
The millennials aren’t just looking at affordability and sustainability, trust and transparency also play a pivotal role when they do business. And this is exactly what the traditional sharing economy platforms lack. To combat these weaknesses, several start-ups are redefining the sharing economy sector by turning to Blockchain Technology.
Blockchain-based platforms
So, is Blockchain the saviour that will iron out the wrinkles and revolutionize how we share goods and services?
One of the most important aspects of the sharing economy is trust. After all, these are platforms which require the user to enter their personal information, their banking details etc. Sharing platforms also require its users to strangers with their assets. So how can you really trust this faceless identity with your private data and money and expect them not to abuse it? Blockchain Technology can play a pivotal role here.
Blockchains are a form of distributed ledger, which is fully transparent. It allows for all kinds of transactions to occur between the transacting parties. Transactions that are recorded on the Blockchain are immutable. While multiple parties can input data into the Blockchain, the data on the ledger can be appended only if there is a consensus among the group.
So, in the case of a review system, a review once stored in the Blockchain cannot be changed. This adds an additional layer of security and will help in fostering trust and transparency in the sharing economy sector. So, all this and more ensures that true peer-to-peer transactions are enabled on a Blockchain driven sharing economy platform!
Both Blockchain and the sharing economy are still in the nascent phase. With more use cases being explored, their capabilities are being discovered every day. While Blockchain Technology is on the lookout to exercise its full potential, the sharing economy is on the lookout for better technology to improve. So, it appears that both these fields can realise their full potential in collaboration with each other. This particular match could definitely prove to be one made in heaven!
