The definition of sharing economy usually varies depending on the person you are asking for – or the site you are looking for. You will find that the definition often includes the sharing of a good or service through a online Platform. The truth is that the sharing economy has existed for centuries. Communities have historically shared limited resources instead of owning everything themselves.
The advent of the internet has changed the possibilities of a sharing economy for all of us nowadays. It's a sharing economy and a gig-economy merger.
Internet has expanded the ability to connect potential buyers to lenders – and everything else. This gave rise to technology giants like Airbnb and Uber, which allowed individuals to monetize their rooms, homes or unused cars. The Internet offered people more choices – affordable and accessible ways to move from A to B and stay in C. Our traditional counterparts did not have this opportunity.
The sharing economy has gone through waves of hyper-enthusiasm.
The ability of the Internet to impact the sharing of small items such as DIY home tools did not really attract attention – but it could do it. And this dream is one that dreams and produces so many entrepreneurs. Transaction costs and convenience always favor the purchase of an item. But the development of innovative technologies, including blockchain, the Internet of Things (IoT) and the Business of Life Things (BoLT) alters these limitations. These innovations are beginning to show us the possibilities that the future of a true sharing economy could mean for individuals, the economy and the environment.
Overproduction or under-consumption
The boom of the digital revolution and smartphones have allowed us to connect with the rest of the world in ways we could not before. We have access to more options in booking accommodation, transportation and access to resources. Otherwise, deemed unapproachable or inaccessible, becomes not only possible, but realistic.
In the developed world, we always have a state of mind that we must own everything ourselves.
However, even this concept is starting to change. From our cars to our DIY toolbox that we only use once a year, via the Internet, what it means to be practical is changing. "Things" are expensive and take up too much space. We do not use the total value of our assets. Private vehicles remain unused for an estimated period 95 percent of their lives, so why does everyone need their own car? What if cars were rented by the day or by the hour and you only had insurance for the rental period, instead of the 95% when you do not use your car?
Why did we stay so long on third party platforms?
The traditional need for third-party platforms such as online marketplaces or websites listing your available space or other assets exists because users need to trust the transaction process. You want to know that when you pay for a good or a service, you receive what you paid. These platforms helped to build that trust.
The arrival of blockchain technology, although originally intended to disrupt the financial sector, has pushed almost all industries to microscopy.
From now on, almost all the sites of operations are confronted with an optimization linked to the use of the key functionalities of the chain of chains.
These features include: decentralization, transparency, immutability, and security. The Blockchain can provide a more reliable environment because of its decentralized element. Consensus on a given transaction will now be handled by a network of peers, or nodes – not a central authority.
Various incentive or dissuasive methods are applied through blockchain models to maintain honesty and integrity within the network.
This "Peer Review" will ensure that valid transactions are verified and confirmed. BlockchaiThe ability to decentralize the property means that we can create aer-esque service without the need of the company. Let's go back to what the internet has given us today: blockchain reduces the operational costs of the central platform. We have seen the interest of Yelp – enabling a true peer-to-peer – and the same quality can be achieved with blockchain, where prices are agreed directly between the seller and the buyer.
This template also means that your personal data is not collected, stored and subsequently monetized by a single entity. This data receptacle has been the traditional mode of operation – provided by most online transactions so far on the internet.
Summer Here is an example of a business using blockchain technology to improve the colocation economy. They eliminate the conditions of service and the costs borne by the centralized giants who usually hold the market share. Beenest enhances the qualities of existing businesses ranked in "the sharing economy" as Airbnb. But this society wants to allow users – not a company – to reap the benefits of peer-to-peer resource sharing.
In this new home-sharing model, those who have rooms or homes to spare can connect directly with those looking for housing. There will be no intermediary or platform paying a commission or storing the data of its users (your data and everything that concerns you). We will no longer monetize your personal information later, nor your private transactions.
How long will it take for your state, your local government or your country government to want a piece of your tiny cupcake – including data? Big and big businesses pay very little tax with all the loopholes – and you personally are just trying to make ends meet.
The combined capabilities of IoT and Blockchain
Smart contracts are another element of the blockchain that removes the need for trust between parties providing and using goods or services.
Smart contracts are, in essence, a set of self-executing rules that run on if so place between at least two parties. For example, if you want to rent a car for the day, you must send the required payment to an account controlled by the smart contract. Once the payment is received, the smart contract runs, unlocks the car and allows you to turn it on. Once the rental period is over, the car will lock and not turn on anymore.
Slock.it is a German company that creates concrete applications for the sharing economy by connecting human-machine sharing and machine-machine sharing with the help of block strings, IoT and BoLT. Among their many projects, they develop smart switches that can be used with smart contracts to unlock doors independently. These are the doors of a rental house, an office, a vehicle or even access to services. Services may include items such as the measured wifi upon receipt of payment and giving access to the paid period.
Through a simple app, users can search for connected devices to hire, pay and access the device.
The history and use of these devices are stored in the blockchain in the background, recording data including the time used, the amount paid, and so on. For devices such as machines, the machine saves the elapsed time and notifies the device of the next intervention. The use of smart contracts in a sharing economy model means that there is little or no need for third-party intermediaries. It is these users who would normally contribute as a "trusted" platform providing the services. This reduces operational costs, which means that the tenant pays less and the user who shares their property or service earns more.
With approximately 23 billion devices connected in 2018, we can now share more assets reliably. We can locate the asset and track its use.
Beyond the common and obvious elements that are shared in today's economy, there are many other resources, physical and immaterial. We can introduce a business model of sharing economy into underused spaces. These spaces can be rented and shared with other users, to the benefit of your own economy.
- And if houses equipped with solar panels could reallocate their surplus electricity to neighboring homes via an electricity grid and earn money instead of electricity companies?
- What about renting the extra disk space we have on our hard drives or an additional 20 GB of internet data from our monthly package that we never use?
What is YOUR "What if?" It is here that the entrepreneurial spirit can flourish and make a living.
Currently, it's easier for people to buy their own plans and own hard drives (whether local or cloud-based). And if there were practical and affordable options to rent those unused services that you still pay?
Micropayments are essential to the inclusion of any type of asset or service in the sharing economy.
It has not always been easy to implement payments on small items where transaction costs are a much larger percentage of the asset you pay for. The introduction of Bitcoin as the first application of the blockchain has shown a new possibility for micro-payments. Previously, these were hindered by the transaction costs borne by traditional credit card companies.
Cryptocurrencies were considered as the new solution to pay per article on a multimedia site. Now, they are much more.
For just a few cents, other small purchases available suddenly expand the possibilities of peer sharing. Despite the problems that some block chains face due to network congestion and rising costs, many companies are still working to improve networks. These people strive to create instant, close, or nil transactions.
One of these companies is IOTA, which uses a large distributed book called Tangle to enable fast, secure and void payments. Soon, this quick transaction can be applied to any connected device. This is exactly what we will need to allow users to easily pay for goods and services. This action will finally allow connected devices to share and use services with each other.
It is estimated that in the next 10 years, more than 50% of the global economy will be created from the main sectors of the collaborative economy.
We will assist with personal loans, music and video streaming, auto sharing, house sharing and online endowment. This traffic saving can be significantly greater as we develop current and future technologies to improve accessibility. The increasing accessibility to what we can share with each other will increase with the ability of individuals to share it. As others grasp the vision of this ability to earn a living and have the ability to live better, we will see a much faster rise in the way that will be developed.
At a time when we use too many resources on the planet, this could be a solution to over-consumption and waste of resources.
We will also see a shift in the distribution of the economy as technologies, such as blockchain, allow daily users to capitalize revenues from their own assets. The expensive fees of the center giants have already nibbled these assets – but this consumption of our asset – can become the past – quickly.
Of course, we still have to develop rules, security rules and policies – as we develop what the sharing economy will really mean. It is clear that consumers now have more options to choose their products and services. We can give lenders (us) the opportunity to offer their unused goods or services to a much larger audience.
The economy works or the supply and demand, and it will always do it. The introduction of more services available through individual people will bring more competition. This will inevitably continue to foster greater innovation in sharing economies and large cities. .