When a founding team starts a company, they often do so by marrying a problem they know needs solving with technologies they believe can help.
In most cases, the problem being solved is a personal one. It’s an issue the founders themselves are struggling with, and instead of remaining frustrated at the lack of solutions in the market, they decide to build one themselves.
This was our experience exactly.
Before we started Bee Token, we were just a group of blockchain enthusiasts who traveled a lot — attending conferences, working on projects, and so on. Wherever we went, we usually stayed in short-term rentals.
It didn’t take long for us to see that a decentralized model could ameliorate the problems damaging the home-sharing economy — namely, exorbitant fees. And shortly after, Bee Token (https://nest.beetoken.com/) was born.
I don’t believe our experience is an isolated one.
With blockchain technology especially, more and more founders are seeing the potential for decentralizing.
Home sharing just so happens to be a perfect fit. But we firmly believe the future of all sharing economies will be decentralized.
Here’s why.
The blockchain eliminates fees and lowers prices.
Centralized companies charge steep transactional fees.
In the case of Airbnb (the pioneers of home sharing), they charge guests a three percent fee per transaction, and hosts that rent out their properties up to 15 percent.
Over time, these fees really start adding up.
If you’re a property manager renting out homes on Airbnb, you end up losing thousands or even tens of thousands of dollars year after year. And Airbnb can charge these fees because transactions made on their centralized network require middlemen and currency conversions.
But in a decentralized network like Bee Token’s, every transaction is made using the same kind of currency. In our case, it’s BEE Tokens. This means there is no need for middlemen or currency conversions, and therefore no need for fees.
This is what allows for decentralized companies to compete with AirBnB in the home sharing space. We can offer lower prices, because facilitating transactions on the blockchain is easier and more efficient than on centralized networks.
The blockchain encourages transparency and trust.
Decentralized companies don’t just offer customers lower prices. They offer guarantees of transparency and trust, which are crucial in the sharing economy.
Transactions made in a sharing economy mean two peers who don’t know each other engage in an exchange of goods or services.
When you’re dealing with a centralized network, customers on either end of that transaction have little way to ensure the person they’re working with is trustworthy — that their home, for example, is as nice as they say it is, or that a guest is as well-behaved as they claim.
But when transaction history is available on a decentralized ledger, customers can access that information right away.
The transparent nature of the data encourages everyone involved to act in the best interests of the community — which is the fundamental principle of a “sharing economy.”
It’s hard to trust one specific person, but on the blockchain, it becomes easy to trust the collective.
The blockchain can handle a good volume of transactions.
It’s true that transactions on the Ethereum blockchain are slower and involve a lower throughput than transactions made on a centralized server. But not every blockchain platform needs to process millions of transactions at a time.
With home sharing specifically, Ethereum can easily handle the volume of transactions that take place, as that volume is inherently lower than that of other networks, like ride sharing.
Plus, blockchain technology, especially Ethereum, will be quick to improve. As it gets faster and faster, this will become less of an issue. Not to mention many other blockchains that exist today and support higher volume of transactions.
The biggest challenge for decentralized companies is to educate people about the blockchain.
When it comes to the sharing economy, decentralization is the way of the future. It offers customers more transparency, more trust, and more choice — while providing a superior procedure to facilitate transactions.
Now, the challenge is educating people about the potential of the blockchain and the legitimacy of cryptocurrency.
At Bee Token, we’re addressing that problem by targeting guests and hosts who are already familiar with cryptocurrency. When we started our first token sale, we required prospective buyers to prove they were actually hosts on Airbnb, helping us reduce our risks in terms of letting unqualified people on our platform. And then we gave them bigger allocations based on that prerequisite.
But already we’re seeing a market demand from people outside of Airbnb’s network, asking to get involved with Bee Token on their own.
Every week, people are reaching out to us saying they’re interested in hosting, often because they know we take 0% commission. We have people from all over the United States asking to be hosts — from owners of one-family houses to managers of multi-property rentals.
The shift inside the sharing economy to a decentralized network is happening. And it makes sense: the pillars the sharing economy relies on — trust and transparency — are the key components of the blockchain.
It’s only a matter of time before more companies begin to see the massive opportunity in decentralizing.