What Blockchain Means For The Sharing Economy

What Blockchain Means For The Sharing Economy

One of the biggest commonalities between big businesses that have emerged in the last decade or so, such as Facebook and Airbnb, is the fact that they depend entirely on user content to develop platform value. This is very different than the business models of the past where customers were somewhat passive creatures. Today’s consumers are actively contributing to platforms. One of the changes this has brought about is a lack of need for physical location, and in some cases, staff too. However, according to Primavera De Filippi, writing for the Harvard Business Review, this model only generates value back to a very tiny number of people, and not to those that contributed all the value to the platform. Those that operate the platforms make the money.

De Filippi argues that this is about to change, as a result of blockchain technology, and especially given its decentralised nature and no need for intermediaries. As she highlights, “With a blockchain, software applications no longer need to be deployed on a centralised server: They can be run on a peer-to-peer network that is not controlled by any single party.” This is good because it allows people to collaborate to work on common activities, and to work more securely in this regard also, in a decentralised way. Some social networks are already operating on this basis, such as Akasha. These do not have a centralised entity controlling the network and deciding who gets to see what, but rather, the work of people who organise themselves through rules in blockchain and who contribute to the network’s maintenance.

There are also other organisations running like this. OpenBazaar is one such company. It is similar to Amazon but does not have an intermediary like Amazon controlling it. Blockchain technology is instead used to ensure the interactions between customers and vendors and there is no middle man. Escrow accounts are created on blockchain, and at least two parties must agree when it is released. Essentially, once the buyer sends the payment to Escrow, the vendor sends the product, and then the funds are released once the customer receives it. Aside from this, car pooling platforms have also been developed that operate using decentralised blockchain infrastructure.

Screenshot of OpenBazaar website

All of this points to a change whereby organisations no longer have to be centralised. They can be decentralised and they do not have to have a layered structure. Instead they may easily be supported by the individuals that utilise them, all working together and interacting via blockchain. This could have the potential to lead to a greater level of platform cooperativism, whereby people that use the platform are not just contributors, but can also be shareholders in that platform. This allows a striking difference to take place, whereby the value generated via such platforms is much easier to share out among all of those that helped create its value. Rather than large corporations taking control, the people can. There need not be intermediary operators, where there are blockchain platforms.

The internet was supposed to bring about greater chance for David type companies taking on Goliaths, but instead we have found that new Goliaths have emerged to take the place of the old, and these are as hierarchical as they ever were. However, blockchain does genuinely provide the potential to change this at a fundamental level. Instead of one all-encompassing power, people can cooperate with one another to build platforms where the wealth can be shared, and everyone will get their dues.

However, we cannot just expect that this will happen. After all, we did expect that this would happen with the advent of the internet, but it did not. Rather, new centralised organisations took the place of the old. There is always the possibility that major companies will still find a way to develop centralised organisations in blockchain. This means that people need to see the opportunities that blockchain brings now, and grasp them with both hands. This is one way in which a truly sharing society can actually be brought about. The future could be bright, and could be sharing. It will just take a little rethinking how we do things.

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