A match made in heaven: How blockchain technology is enhancing the sharing economy

The sharing economy has grown exponentially in recent times, with a 2017 report estimating that revenues from the industry will reach $40.2 billion in 2022, up from $18.6 billion last year. Our local sharing economy is showing just as much promise, with the latest findings indicating that sharing businesses in New South Wales alone have seen revenue growth of 68 per cent from an estimated $1.6 billion in 2014–15, to $2.6 billion in 2015–16.

This is by no means a small feat for the Australian economy and perhaps the most exciting prospect here is that with the advent of blockchain technology, not only is the growth and scalability of sharing businesses in our own backyard destined to accelerate, but the mass benefits brought about through its utilisation for users worldwide, cannot be overstated.

To truly comprehend the potential of blockchain technology in the sharing sector, one can think about its application as the evolution of the sharing economy, or the third wave of service offering for consumers — we are fast transitioning away from traditional taxi services, to cheaper and more convenient alternatives like Uber, and now blockchain businesses, such as SnagRide in the US, is ushering in a new alternative to car-sharing with its decentralised, AI ride sharing application.

What does this mean for the everyday consumer?

While Joe Blow may think that a household name like Uber is a decentralised, P2P network, the reality is that it is a centralised system where ‘transactions between individual consumers and providers are routed through infrastructure, hubs and software’ that belong to the company. Uber retains full control over its networks and individual providers, while at the same time, remaining vulnerable to regulatory actions. Essentially, by removing the centralised server from the equation, blockchain technology is removing the middleman taking a percentage of the profits and distributing more to those conducting the service (the individual providers), while reaping more benefits for those receiving and using the service (the consumer).

A win-win situation, and something that I’m very excited to be involved in.

To break it down further, here are four ways blockchain technology is enhancing the sharing economy for users:

Reducing fragmentation: There are thousands of companies around the world that operate within the sharing economy, from cars to apartments, to office space and storage. However, this has led to fragmented access to the overall sharing economy with compartmentalised services requiring separate individual sign-ups. This is simply a hassle for users. With blockchain-driven solutions, such as what we are working on at ShareRing, sharing services could be accessible and payable through a single platform, with the flow on effect of removing currency exchange rates and international transaction fees.

Removing the trust issue: Trust is of fundamental importance when it comes to sharing assets belonging to third parties or services offered by these third parties. What recourse do users have if anything goes wrong, for example? A new technology made possible by blockchain, smart contracts- or otherwise put, data-driven code that can represent verifiable application logic and help automate a system’s rule set-instil greater trust and peace of mind in users, particularly in the event of a dispute where a smart contract can offer arbitration.*

Providing greater security: At its core, blockchain is focused on protecting and securing data. Due to the decentralised nature of the technology it is inherently more secure than traditional centralised solutions, which have been prone to hacking — you only need to Google ‘Uber’ and ‘Airbnb’ alongside the word ‘hacker’ to be made well aware of this. Blockchain-powered sharing services make it almost impossible for hackers to access users’ accounts, which are also all verified on the blockchain from the outset.

Ease of integration: By using the ‘smart contracts’ mentioned earlier, you can also trigger external systems or integrate with various complementary services, such as a blockchain-based insurance service that only starts the policy from the moment you start the car, or a gig economy service provider automatically knowing when to clean a short stay apartment because the renters have vacated.

This article originally appeared in The Australian. You can access the original article here.