A few weeks ago I was in Vietnam working with the development team. I was able to save money here and there, making the trip pretty affordable: I purchased a day pass to stay on top of tasks at the airport lounge, I took a Grab to and from the airport, I stayed in a basic-but-comfy Airbnb rental,, I took a tour of the city from a freelance tour guide, and for a reasonable price I found someone on a pet-sitting platform to look after my dog back home. Nothing unusual these days, but because of the sharing economy I was able to get this done for about half the price as I would have with conventional services.
Before the internet, these possibilities simply would not have worked, and back then nobody could have predicted how much extra value could be unlocked in the economy from expanding the number of buyers and sellers in this way. This is the “sharing economy” that you often hear about. Nowadays, none of these businesses are out-of-the-ordinary, but the key lesson is that new technologies will continue to surprise us with ways of transacting that we never would have thought of.
And more change is around the corner, but this time it won’t be just the internet but blockchain technology that makes the difference. In phase 1 of the sharing revolution, it was simply a matter of linking people together to facilitate the same kinds of exchanges as already existed. But in phase 2, tools like blockchain will enable more new kinds of economic exchanges that create entirely new products and markets.
Here are the main ways that blockchain technology turns the rulebook of the sharing economy on its head, and the companies that are doing it.
You hear a lot about big corporations adopting blockchain technology. In reality, there are major obstacles to using blockchain as a record in business. Optimists envisage a world where all database transactions are recorded immutably in decentralized ledgers. This, they hope, will create new levels of transparency and reliability.
There is only one problem: no business or person wants their entire financial history available to anybody who wants it. It is not acceptable from a personal perspective, but businesses also don’t want their trade secrets easily viewable. Public smart contracts would allow anyone to snoop around your dealings – and smart contracts need to be on the decentralized blockchain! In the case of a sharing economy, which often involved personal property, blockchain could create uncomfortable and possibly dangerous data exposure.
But there are solutions on the way. Enigma (ENG) is the most notable. Enigma uses Multiparty Computation (MPC) to calculate smart contract data but without anyone being able to view the full transaction. MPC involves basically two or more different people undertaking two or more different sides of an equation so that no one actor knows the full story. Related to this is the ability of Enigma to store encrypted data on the blockchain.
This will be pivotal in the future of the sharing economy since it balances the openness of blockchain with some basic privacy guarantees.
One of the most unappealing terms is the English language is “payment dispute”. These words will send a chill down the spine of anyone who has traded extensively on eBay, for example. It is a central problem with the internet that anonymity and distance allow scamming to flourish. Sharing economies involve decentralized networks and complex transfers of assets and services, meaning that opportunistic behavior is a serious risk. No user wants their experience with sharing platforms tarnished by abusive or scammy actors.
Without blockchain technology, it takes a centralized actor to resolve disputes and process transactions. This is the case with PayPal, who employs an army of admin to address complaints about transactions. Not only is this inefficient, but it also presumes that PayPal will behave correctly as well.
Obviously, this is not ideal. Until now it was unavoidable, but ledger/blockchain technology allows for transactions to be coded with conditional clauses that control the transaction process. If one aspect of the contract isn’t fulfilled, the contract can withhold payment automatically – no need for a centralized arbitrator.
This gets especially interesting when “oracles” are included in the equations. So in the sharing economy, these “oracles” (services which monitor the world outside of the blockchain) then feed their data collection into the blockchain. So for example, a sharing economy community of farmers could use oracles to detect commodity price movements and automatically change to the participating farmers based on this.
An interesting example of the use of smart contracts is with ShareRing’s decentralized sharing platform. With ShareRing’s smart contract-backed market engine, two parties can lend physical or other assets between each other in safety with funds escrowed and all transactions ledgerised on their proprietary blockchain. What’s more, ShareRing will integrate with the aforementioned oracle technology, which means that any changes in the real-world status of the assets loaned can be detected and fed back into the smart contract. Very clever!
Leveraged identity management
Part of the problem with doing business on the internet is that you don’t know who you’re dealing with. Nearly all platforms allow you to simply remake a new account if you had to ditch your previous one. This is clearly not conducive to a high-trust marketplace. But with blockchain technology, it is easy to keep a decentralized and transparent record of each user. There will be no risk of dodgy actors coming back if all users are verified and recorded. And this doesn’t have to be time-consuming. A blockchain platform specifically made for the sharing economy, ShareRing has a OneID feature that allows users to create their profile quickly and easily, and this can then be used to verify that user in the future.
One ID will, in theory, make many aspects of the sharing economy much easier just based on improving the ID management aspect. Sharing is essentially pooling property, and your identity is the key factor in managing property. ShareRing has a marketplace for sharing all kinds of assets and this can be done easily internationally.
So from the use case of identity management for their sharing economy, ShareRing also is expanding the use cases beyond sharing. They have two currencies, SharePay and ShareToken. The former is used for payment of shared assets, and the second goes further and ledgerises the transaction entirely. So along with the OneID tool, ShareToken drastically increases the oversight of online transactions. All of this wouldn’t have been possible without blockchain tech.
ShareRing has an interesting caliber when it comes to privacy. Some of the founders of the company are previous founders of Keaz, a car-sharing platform. Automobile sharing is highly sensitive to privacy and security concerns, so the founders’ involvement with such a high-stakes privacy focussed venture will bode well for ShareRing. The same founders have reiterated their commitment to privacy, and the ShareRing privacy measures are some of the strictest in the industry.
The world is moving towards a more sustainable and open paradigm with the advent of the sharing economy. For this to really take off, there must be safeguards and features built-in that make the platform user-friendly. Blockchain has come on an awful lot in the past few years, and now looks able to provide those safeguards.
Dear ShareRingers, thank you for actually reading this.. here’s a little gift for you! The first 10 person who retweet this article with the answer of the following question, I will send you 2500 SHR tokens!
Which rideshare platform I used in Vietnam? (tag them!)