What is the sharing economy?
In the sharing economy owners rent out something via peer-to-peer services. Essentially, a triangular relationship exists: the owner provides his or her underutilized asset to a person seeking these assets through an intermediary platform. Moreover, the intermediary typically normal a rating system so individuals on both sides of the transaction can trust each other.
Success players and Creative Destruction
Success players of the sharing economy impact traditional businesses: Airbnb effects the hotel industry and Uber the taxi and limousine industry, for example. Here we can see a process of creative destruction, where innovation defies the ‘old rules’ of the industry (Menne, 2019). Alibaba, the world’s biggest retailer does not own any goods, Uber the world’s largest taxi firm does not own a single vehicleand Airbnb, the world’s largest provider of accommodation does not own any real estate (Huck, 2016).
Blockchain technology in the sharing economy
Blockchain distributed ledger systems may allow for even more transparency, security and traceability in the sharing economy. The digital ledgerenables multiple parties to reach an agreement on the authenticity of a transaction in a decentralized manner.Itbasically proves that something actually happened. Chelsea Rustrum (2019) gives a good example of the potential use of blockchain technology in the sharing economy: “If I have a car in Miami and I want to go to Bangkok, and I need an apartment. Well, with traditional sharing economy platforms, perhaps I put my car on a car sharing platform and I look for a place on Airbnb. Through a blockchain system, I could do a value exchange. I could lend my car to person A, meanwhile staying in person B’s apartment in Bangkok, and in a perfect world no money would actually have to be transferred because equivalents in value can be facilitated”. Blockchain technology further develops, and aids in the formation of value-distributed networks. With the advancement of blockchain the question rises whether business to business sharing through B2B platforms would be possible (e.g. sharing licenses or patents). Businesses often don’t trust a central platform provider. Here Blockchain and Distributed Ledger Technology could function as an anchor of trust and act as a neutral platform for potential B2B interactions.
Expanding the definition of the sharing economy
According to PWC the sharing economy is projected to increase to 50% of industries revenues by 2025 (Menne, 2019).Many commercial devices are not highly or readily available on the peer to peer market. For exmplae, not everyone owns a scooter, which creates higher demand for the Felyx. scooters. With new technological advancements, one could expand the definition of sharing economy, as it constitutes of both peer to peer (e.g. Airbnb flat sharing) and business to consumer sharing models (e.g. car sharing services such as ShareNow). In the future, through the prospective developments in Blockchain technology in the sharing economy, B2B transactions could be enabled, such as the sharing of patents and licenses (Rustrum, 2019).
Huckle, S. (2016). Internet of things, blockchain and shared economy applications. Procedia computer science, 98, pp.461-466.
Menne, A. (2019). Blockchain in the Sharing Economy. [online] UTwente. Available at: https://essay.utwente.nl/76517/1/Menne_BA_EEMCS.pdf [Accessed 18 Oct. 2019].
Rustrum, C. (2019). The Future of Blockchain — Bridging the Sharing Economy — a TEDx Talk. [online] Available at: https://hackernoon.com/the-future-of-blockchain-bridging-the-sharing-economy-a-tedx-talk-b46b897d27f8 [Accessed 18 Oct. 2019].
