High fees, trust issues and lack of transparency may soon be a thing of the past
The sharing economy is one of the fastest growing segments in business. The sharing economy allows people to rent out their own property for use by others. Airbnb, for example, allows travelers to rent out part of an apartment or house (or the whole thing!) instead of checking in at a hotel. Uber and Lyft are a proxy for taxi cabs, while RelayRides allow people to borrow their neighbors cars by the hour or by the day.
Unfortunately, the traditional sharing economy has its issues. It often levies high fees for using the platform, hurting individual users but benefitting the underlying corporation. Additionally, the centralized nature of the platforms means that users take a backseat in terms of priorities — no pun intended. Some companies have abused their power, getting access to private data without customers knowing.
In order to combat these issues, several companies are developing blockchain based sharing economy platforms. They are much more inexpensive to use and provide much needed transparency. In essence, these platforms severely limit, sometimes completely cut out, the need for a middleman. This allows true peer to peer interactions, eliminating the 20–30% transaction fees that come with centralized platforms. Because all transactions are logged on blockchains, all users can audit the network’s operations.
One company, Origin Protocol, is building a platform that empowers developers and businesses to create their own decentralized marketplaces on the blockchain. Their protocol makes it quick and easy for organizations to develop and manage listings for assets and services. Buyers and sellers can connect through the platform, browse listings, and initiate enterprises. It also provides a way for freelancers and other independent entities to do business in a decentralized manner. It’s a great way for startups to build the infrastructure of their platform on the blockchain. It also provides open and shared data streams, encouraging developers and businesses to share ideas, thereby fostering innovation.
Some companies are seeking to globalize the sharing economy by providing a streamlined platform that removes the centralized platforms that have previously held sway in many different industries. For example, CanYa, a decentralized peer-to-peer sharing and services network, effectively removes the need for centralized systems like Craigslist or Letgo, providing a way for service providers and service seekers to find one another and interact with security and confidence. By removing the middleman, these platforms have provided a simple and easy way for consumers to find and share information about service providers and grow gig-economy businesses, free from the overhead of centralized sites.
Other companies are aiming to achieve something similar. For example, the Bee Token, a decentralized network, is seeking to link house sharers with house seekers in order to replace profit centers like Airbnb. These types of systems provide meaningful and safe interaction between consumers, and, using blockchain technology, can offer similar or better levels of security and service for their customers.
In the computer sharing space, Gladius is creating a decentralized CDN and DDoS protection platform. It allows users to combine unused processing power to defend devices from deadly DDoS attacks. Users can join their devices together through the platform to create a decentralized network. When a hacker attempts a DDoS attack, the pool fights it, instead of just one server. By distributing processing power, the platform dramatically reduces the likelihood of a successful attack, because it must overcome each individual device to reach the target. Protection plans are also much cheaper because third parties and central server costs are eliminated. Users have a wide variety of protection plans to choose from, giving them the ability to select the plan that makes the most sense for their situation.
Finally, with the decentralizing trust networks possible through blockchain technology, companies like WeTrust are creating ways to bring financial services to those who are unbanked, or in areas where banking infrastructure is not available. Through the power and security of a distributed ledger, the company is hoping to create a tool that allows consumers in developing and undeveloped regions access to banking simply through an internet connection. Because blockchain removes the need for centralized trust systems, banking can be scaled to meet the needs of small-time users in areas that have been traditionally closed to banking because of remoteness or infrastructure limitations.
Blockchain is making its way into a variety of industries, creating trust systems that undercut the traditional profiteering systems that have enabled the nascent sharing economy. By providing peer-to-peer interactions with transparency and security, blockchain promises to build new industry controls that will change the way business is transacted and the way consumers relate and interact.