Blockchain technology has been one of 2017’s most hyped up buzzwords, and for good reason too. What was once seen as merely the backbone for cryptocurrencies such as Bitcoin and Litecoin, has now blossomed into a one-size-fits-all technology that can be used to enable real change and innovation in a wide number of scenarios. As it pertains to the sharing economy, for instance, the blockchain can breathe new life into a niche that has stalled since its initial explosive growth.
That’s because the underlying idea behind the blockchain is such a simple, yet powerful concept. In layman’s terms, a blockchain is a way of keeping track of information that relies on multiple copies distributed across all the nodes of a network. This decentralized approach of storing information is an attractive proposition because it is, in essence, tamper-free and resistant to regulatory oversight. It also promotes responsibility and self-reliance, two of the main traits that the sharing economy also leans heavily upon.
Smart contracts and their applications
One of the main features of current blockchain technology is its ability to deploy and enforce smart contracts automatically. These arrangements are similar to their real-life counterparts, whose purpose is to clearly define a set of norms and actions. But what makes them so special is the fact that they are not subjected to human error or malfeasance.
While a real-life contract can easily be disobeyed or disregarded, prompting litigation that may take longer than expected and consume vast amounts of resources, a well-written smart contract over the blockchain pretty much guarantees that both parties will get what they need, otherwise it automatically won’t get fulfilled. For example, an Airbnb host who wants to open up their home to guests from abroad, can set up a smart contract that programs the front door lock to open up only when someone has made a reservation, then automatically sends funds to the host’s bank account once their stay has concluded.
No intermediaries necessary
One of the drawbacks of the current sharing economy landscape is its reliance on intermediaries to get the job done. In order for someone to share their home, their car or their skills, one needs to open up an account with the specific operator that facilitates interaction between freelancers and clients in that particular niche. While this kind of arrangement has its advantages, it ultimately involves setting up a barrier between people who could just as easily come to terms with one another directly.
Through the blockchain, however, anyone with the ability to set up a smart contract can reap the benefits of direct interaction. One already-famous example is that of initial coin offerings. While taking part in a regulated stock market requires the use of a broker, purchasing tokens from any kind of entity operating on the blockchain is as easy as knowing how to send and receive funds. This could easily be applied to the sharing economy model as well, with people taking the reins of their own destinies and opening up shop on the web for themselves. Even in the field of learning, an entity such as BitDegree seeks to bridge the gap between students and employers in a way that does not rely on state-funded programs or self-funding initiatives in order to reach employment goals for all parties concerned.
A little bit of human touch
Needless to say, things still have a long way to go before blockchain technology can reach mass adoption levels in the mainstream. For one, not everybody can write or read a smart contract, although facilities are being set up that will greatly simplify the process in the future. What’s more, the current blockchain market is built upon anonymity and deregulation, two assets that are not traditionally associated with mainstream pursuits.
However, once the regulatory issues have been sorted out and transparency is no longer an issue, more and more people are expected to hop on the blockchain train. As things grow ever more interconnected thanks to the capabilities of the Internet, all objects may soon be shared and traded in an ecosystem that prizes individual-to-individual transactions. Far from dehumanizing the process of interacting with our fellow man, such scenarios will likely rely even more on that all-important human touch in order to feel truly genuine.