Slock.it — Decentralizing the Emerging Sharing Economy
For this first blog post, I will describe the vision we have for our first Slock.it UG product.
With Uber, Airbnb, and others leading the way, we have to ask ourselves, “Is this how we want to build the sharing economy?” Monopolistic companies that take extraordinary fees and have full control of the market? I have to admit, I use them and appreciate the progress they are making in bringing awareness to the sharing economy, but I would prefer a system that would allow me to deal directly with the owner without any third-parties skimming off the top. But how do we know whether we can trust the other party without an intermediary? Who handles a secure money transfer? How do we handover keys (I have used Airbnb in NYC with the key under the door mat… is that really the best we can do)? How do owners and renters find each other?
These problems can now be solved using smart contracts on a blockchain. A blockchain is a decentralized cryptographically-secured database, which allows anyone in the world to access it and send transactions to it, safely changing its state without having to get permission! Slock uses Ethereum (ethereum.org) for that. Ethereum expands upon the blockchain idea with the concept of self-enforcing smart contracts. Users of Slock interact with each other through this contract: https://github.com/slockit/smart-contract/blob/master/BasicSlock.sol and because of the rules in the Ethereum protocol, this contract will always do exactly what it is programmed to do and cannot be cheated (I will write another post covering the details of the Slock contract). So we, as the creators of Slock, do not need to run servers or handle transactions. We don’t need to transfer money or manage the handover of keys. All of this will be handled by the Ethereum blockchain.
When someone purchases a Slock, it will be connected to the Slock smart contract in the Ethereum blockchain and controlled by it. The owner of a Slock can set a deposit amount and a price for renting his property, and the user will pay that deposit through a transaction to the Ethereum blockchain (without us), thereby getting permission to open and close that smart lock through their smart phone. The deposit will be locked in the Ethereum blockchain until the user decides to return the virtual key by sending another transaction to the Ethereum blockchain. Then the contract will be automatically enforced. The deposit will be sent back to the user minus the price for the rental which will be automatically sent to the owner of the Slock. All of this happens without any assistance from a third-party!
Since the data for each Slock is publicly available on the blockchain, any web service can scan it and offer matchmaking. The current model of giving all power to one company because they have all the data will be broken. The data will now be there for any blockchain explorer to use.
Therefore, Slock can be described as an open platform for others to use and build upon. It can be used in a completely decentralized fashion, connecting the renters directly to the owners of the property they are renting.
What exactly are we doing? First, we will build the foundation for this platform by deploying the smart contract on the Ethereum blockchain and selling the hardware that makes use of it. Second, we will provide services such as a “Slock Blockchain Explorer”, a way to use traditional payment methods (credit cards, PayPal, etc.) to buy ether which will be used in the contract, and customized solutions for various businesses (hotels, bike outlets, tool rentals…). However, users do not need to rely on our services to use the underlying platform.
We will offer hardware and software to make use of this system and encourage others to build upon this standard as well. Imagine the possibility to efficiently and securely rent out your flat, house, bike, car, washing machine, lawn mower, etc. just by locking it with a Slock. Contract enforcement and payments will all be handled automatically.
