Let’s hope so. It’s like watching a soap – we’re all desperate to know what happens next. So, what if the combo of blockchain and the sharing economy trashes the business models of Uber and Airbnb, among others? And they could…it’s already started.
The success of these and some other platform companies is largely due to people trading assets they own and are paid for, but from which new value could be derived, explains Associate Professor, Hussein Dia, from Swinburne University of Technology, Melbourne, Australia, in The Conversation.
And they release this value by using platforms to match up sellers of the extra capacity – whatever it may be – with buyers. Further, they collect data about transactions “for further commercial gain”. Indeed, arguably all companies’ main line of business will be data – and we’re a long way down that line already.
But wait. What if blockchain enabled those buyers and sellers to work peer-to-peer and cut out the middleman/data aggregator and seller?
Our prof asks, “Can technology be used to bypass the third party and allow direct peer-to-peer collaboration within a distributed governance structure? What could a ‘peer-owned’ and ‘peer-run’ marketplace look like?”.
I dunno, but I’d like to find out. First though, here’s the science bit about blockchain and why it has the potential of a wrecking ball…
So, as the prof so neatly puts it, “You can think of blockchain as the second generation of the internet – a transformation from an internet of information to an internet of value.”
All parties –suppliers, consumers and competitors, share a decentralized, digital ledger on which every activity is recorded and validated by every participating system. The assets described in each blockchain transaction can be financial, legal, physical or electronic and its algorithms ensure data integrity and authentication of transactions. So far it has proven totally secure – when you hear about bitcoin fraud (which of course is where blockchain or distributed ledger technology originated), it’s not the core blockchain that has been compromised, but dodgy associated services.
Right back to the action
So if you have a secure, foolproof decentralized system, why do you need an Uber or Airbnb if you and all the communities you belong to can do it for yourselves, without anybody collecting, analyzing and selling data about you?
Or as the prof explains, “The technology’s trust protocol allows autonomous associations to be formed and controlled by the same people who are creating the value. All revenues for services, minus overheads, would go to members, who also control the platform and make decisions. Trust is not established by third parties, but rather through an encrypted consensus enabled by smart coding.”
The transformation has started
Interesting, eh? And the transformation has already begun, as the article outlines:
- Arcade City, a global community of peer-to-peer services, is planning to offer a ride-sharing service on the blockchain. To catch a ride, the user buys digital currency (known as tokens), creates an offer and commits funds for the ride. A driver claims the offer, matches the funds to signal their commitment to provide the service, and picks up the passenger. The blockchain releases the funds as soon as the user acknowledges completing the ride.
Arcade City has a city council, which will overlook the system for three years until it is fully decentralized and up and running.
- The same concept of using distributed public record technology can be applied to a range of urban applications. For example, an energy startup in Perth is looking to trial a peer-to-peer technology solution that would allow consumers to offer excess energy, available through their solar panels, on the blockchain. Clever code matches the suppliers with consumers without the need to go through the energy provider.
Join the revolution
Yeah it’s early days and all that jazz, but you know, the riffs on platform-based activities and blockchain seem endless. What if telcos offered platform as a service bundled with blockchain…then people could do what they liked with it, quickly, easily and cheaply? OK, I might be getting just a touch ahead of us here – certainly there’s a lot to think about.
To help you get started, we’ve just published this free ebook, Platforms: Join the revolution, which is yours to keep. And believe me, you’ll want to because it tells you how your company can participate in and benefit from this revolution and outlines the roles communications service providers and their partners can play in the platform economy.
Then we’re starting work on blockchain. Join us at Action Week in Lisbon in February to get in on the ground floor, or if you can’t make it, but want to know more, contact Craig Bachmann, Senior Director, Open Digital, TM Forum.