Why Blockchain Technology is a Perfect Fit for the Sharing Economy
--reported by Markets Insider
SEATTLE, Jul. 19, 2018 /PRNewswire-PRWeb/ -- According to a report released in April by insurance company Lloyd's of London, the economic value of the global sharing economy is expected to reach $335 billion by 2025. That's a substantial increase from 2014 when it was just $15 billion.
But according to the report based on a survey of 5,000 consumers, including 2,000 in China, 2,000 in the U.S. and 1,000 in Britain, many people remain skeptical about the sharing economy. The respondents identified a variety of concerns as their reasons for being wary of engaging in the sharing economy. Consumers cited personal safety (52%) as their greatest concern, but also said that they worried about quality of service (42%), damage to assets (42%), theft (40%), and lack of sufficient safeguards in the event of a problem (38%).
As a relative newcomer, the sharing economy is still working out the kinks. And thanks to new technological developments, some of the shortcomings of the economy are being addressed. Among these new technologies is blockchain. The technology behind buzzworthy cryptocurrency, bitcoin, is being applied to many other financial sectors and seeing positive results.
Blockchain is a distributed ledger where data is stored in blocks. And ShareBlock, a Seattle-based tech company, is applying it to the sharing economy. ShareBlock is the first company to build blockchain infrastructure specifically for the sharing economy. So far, they've partnered with sharing economy startups, including YiRental, a one-year old house rental platform with thousands of listings and over 100k users already in North America.
The game-changing nature of blockchain makes it a perfect partner for the sharing economy where companies like Uber and Airbnb have disrupted the transportation and lodging industries. Here are three reasons why this new technology is a great match for the sharing economy. First of all, the technology can sidestep financial institutions and middle men, thereby reducing the transaction fees dramatically. Secondly, the transparent and irreversible nature of blockchain increase the cost of being evil. Last but not the least, the smart contract, a self-executable program running on blockchain, can provide arbitration when there is a dispute, which guarantees neutrality.
The heart of peer to peer sharing is decentralization. Blockchain is a perfect technical solution to cut out centralized organizations and truly sharing from peer to peer. With all the innovations and constant evolutions in the space, we are likely to see more and more quality sharing economy services on blockchain in the near future.
