Have you ever heard of the sharing economy? Simply put people share things through contact on the internet. Let’s start exploring the sharing economy to see how it all works. Then we’ll tie it in to cryptocurrency, blockchains, and smart contracts.
The Sharing Economy Explored and Examined
An Online Marketplace
The sharing economy exists primarily online. It is also evolutionary. It has changed since it first began and it continues to change. Originally it was true to its name because people shared goods and services by contacting each other online. Online communities that were open-source is where it began.
The term is now broader. It now includes a wider range of economic activity online. Even for profit transactions are considered part of the sharing economy.
The sharing economy transactions are driven by online access. People initiate transactions on websites. Apps have been developed and are used also. Taken together, these websites and apps provide countless opportunities to rent, buy, swap, and sometimes give away items and services.
Both individuals and businesses are involved in the sharing economy. Have you ever heard of Uber? How about Airbnb? Of course, you’ve heard of them. They are large businesses that are part of this economic model. They both operate worldwide.
What is available?
Just about anything is available in the sharing economy. Uber participants offer cars to get you from place to place. The drivers’ profit. The rider pays a lower than usual fee. Airbnb participants offer rooms. The room owner makes some money. The guest gets a wide variety of choices and prices for a place to sleep a night or so. All this is accomplished thanks to the convenience of apps.
Though there’s a huge business presence, individuals are still super active in the sharing economy. Do you have garden space to share? Need some odd jobs performed? Looking for others to fill out a tour group? Maybe you want to temporarily swap some tools? All this and more can be found online.
Both individuals and businesses find new and different ways to become involved.
Why Would I Do It?
People naturally have both similar and differing motivations. The advantages of participating depend upon each person.
Affordability is one advantage. Paying less than usual for goods and services is attractive to many people. Reducing waste and pollution is something that motivates others. Imagine a group of people investing in a car. They each only have a need to use it occasionally. When they do use it, maybe a number of them ride together. This means both fewer pollutants being released into our atmosphere and increases affordability.
How About Disadvantages?
There’s always a downside just as there is an upside. Trust can be a factor. What if you already have the asset? Allowing strangers or new acquaintances into your home or allowing them to use your stuff takes a certain leap of faith. One solution to this issue is ratings. Both the person doing the lending and the person doing the borrowing get rated. Know this history helps eliminate a lot of doubt and stress.
Fragmentation has become an issue. As the sharing economy grows, more platforms pop up to facilitate the transactions. That means a lot of registrations and logins to find and get what you want. Of course, these platforms get a piece of the action. These fees can be discouraging.
With the current popularity and expected growth, the sharing economy is just getting started. With rapid growth comes growing pains. This is where virtual tools developed in the world of cryptocurrency might be able to help.
Some see advantages of using blockchains in the sharing economy. They say the increased security of using blockchain ledgers would be a big help and encourage growth. With blockchains, tampering with transactions would be much more difficult. Peace of mind would increase because each transaction would be more secure.
Also, more details would be available. A universal database could be tapped into to provide information. More details about who is using what assets, for instance, would be one use.
Smart Contracts and Crypto Currency
Think about it. What is the purpose of smart contracts? That’s right. Smart contracts exist to conduct transactions without a middleman. Could this work in the sharing economy? It sure could. Smart contracts could be used instead of the platforms currently in use. Those platforms are middlemen. Without them, the individuals conducting the transactions would not have to pay commission fees. Or they’d pay less.
Is it Happening?
Yes, it is. There are new blockchain companies that are trying to put this all together. Their vision is one platform. A customer could have one account. Via that account, they could find just about anything they wanted to rent or lease. Payment would occur instantly. Yes, they would be paying using cryptocurrency.
It would not matter where you are in the world, you could find what you needed in a platform such as this. And pay for it in cryptocurrency.