There are already over 1174 listed cryptocurrencies on CoinMarketCap as of October 2017 and that number grows every week (1). And while the vast potential of blockchain technology is known in the ‘crypto’ world, many people do not necessarily appreciate the potential that this technology has to completely disrupt longstanding companies and institutions throughout the world. This becomes doubly true when talking about sharing economy services like Uber and Airbnb — the distributed ledger that is the blockchain is well-suited to take over the types of transactions that happen within these services.

I fully expect blockchain technology to create a better, less-costly, more transparent, decentralized versions of these sharing economy services in the coming years.

There are several new kids on the block(chain) already poised to do just this. One pertinent example is The Bee Token, which aims to innovate the short-term housing rental space and put more power in the hands of the renters and guests by utilizing the blockchain.

I’ll let the experts explain more on how companies like these are poised to shake things up.

Interviews have been edited for length and clarity.

Expert Panel:

Greg Wolfond - CEO of SecureKey

Ali Nazem - VP of Business Dvelopment at ShoCard

Tiana Laurence - former Co-founder and CMO of Fatcom

Greg Wolfond:

Greg Wolfond, CEO of SecureKey - Greg is the founder of SecureKey and brings more than 30 years of experience in fintech, security and mobile solutions to his role as CEO. Greg is a serial entrepreneurial whose earlier ventures include Footprint Software Inc., a financial software company he sold to IBM, and 724 Solutions Inc., a wireless infrastructure software provider he took public. He sits on several boards and has been recognized as one of Canada’s Top 40 Under 40, Entrepreneur of the Year and one of the 100 Top Leaders in Identity.

Q: What challenges are there in adapting blockchain tech to the sharing economy? What are the inherent weaknesses?

A: I think it’s going to be relatively straightforward.

We want privacy. We don’t want something tracking where we want to go. Blockchain provides a modicum of privacy – every time my data is shared I should consent to share for each party for a specific purpose. The network in the middle shouldn’t be tracking me in the middle to follow me where I’m going.

Q: Why is blockchain tech advantageous for sharing economy services (Airbnb, Uber, etc.)?

A: When you’re a landlord renting on Airbnb – you don’t care if it’s John or Fred or Steve who rents it. You care that it’s a real person, that they can pay rent, and that they won’t destroy your place and leave it in shambles. If users can do that in trusted and frictionless manner, then those new economy services are going to love it. Those services don’t want to collect more data than they need to. On the other end, users don’t want to send a full credit report to someone they’re staying with for a week.

Q: How might an Airbnb-like platform based in the blockchain be able to capture some of the market?

A: I think right now, verifying identity online is broken, and I think in this blockchain world it’s going to get fixed.

Ali Nazem

Ali Nazem, VP of Business Development at ShoCard, a blockchain-based identity management solution. Ali Nazem manages Business Development and partnership efforts for ShoCard. Nazem is an advertising industry veteran in both traditional and digital media, with experience working with a variety of consumer and technology businesses.

Q: What challenges are there in adapting blockchain tech to the sharing economy? What are the inherent weaknesses?

A: Shared economy companies are inherently open and willing to take advantage of blockchain technologies, because by nature they are usually disruptive entities in their own right with a given marketplace or ecosystem. They are fairly new and don’t have the burden of adapting or complete replacement of legacy systems.

Inherent weaknesses in general for sharing economies and others include: control, security and privacy. While solutions exist, there are still cybersecurity concerns that need to be addressed before the general public will entrust their personal data to a blockchain solution.

In addition, there may be cultural adoption issues.

From a cost perspective, blockchain offers tremendous savings in transaction costs and time, but the high initial capital costs could be a deterrent regardless if you are traditional or shared economy business.

Q: Why is blockchain tech advantageous for sharing economy services (Airbnb, Uber, etc)?

A: We remove the dependency on having a central authority. The problem of giving management of security of user authentication to any trusted party is the potential of breaches, as we’ve seen in numerous examples with larger retailers and credit cards, as well as service providers with and login credentials/information.

Using a distributed ledger and no trusted authority, this problem can be solved, especially in a large or vast economic system in which assets or services are shared between private individuals over the internet.

Q: What is the most exciting part of adapting blockchain technology for use in the sharing economy?

A: There are many exciting aspects of blockchain technology that can be particularly effective and exciting for sharing economy companies, providing the ability for various parties to make an exchange data without the oversight or intermediation of a third party.

From a privacy perspective, users are put in control of all their information and transactions, which remains on their mobile device. From a security standpoint, there’s no central database that can be hacked or breached exposing millions of records, like the recent Equifax debacle.

Tiana Laurence

Tiana Laurence is the former Co-founder & CMO of Factom, a blockchain-as-a-service company based in Austin, Texas. Under her leadership, the company recently secured a grant from The Gates Foundation and a partnership with the Department of Homeland Security to work on blockchain projects using Factom's technology. Tiana has a column on TechTarget where she writes about blockchain and IoT. She is also the author of the recently released Blockchain For Dummies book, a #1 Bestseller on Amazon.

Q: Why is blockchain tech advantageous for sharing economy services (Airbnb, Uber, etc)?

A: Blockchain technology is at the front of everyone's minds because it allows for the disintermediation of intermediaries. The current issue is building the gateways that make Blockchain technology easy and useful for the average person.

Intermediaries such as Facebook, Airbnb, and Uber play really important roles in our lives because they are the trust-layers and connection-layers between two parties that don't know each other and would like to interact. They handle the tricky stuff, like personal information, payment, and technology improvement.

Some blockchain platforms, such as Ethereum, have Turing complete programming languages within them. That means that anything that can be programmed can be created within a blockchain. It is then possible to rewrite Twitter or another website for that matter, but the key questions to ask are who will build, maintain, and improve the platforms especially if no value can be harvested for their creation.

Q: How might an Airbnb-like platform based in the blockchain be able to capture some of the market?

A: It is reasonable that new businesses will pop up, built on blockchains, that will gain market share because they are improving on service and found a way to retain some of the value that they created.

Consolidated industries are most vulnerable to them because they have lost natural competition that kept them lean and customer focused.

What are your thoughts? How do you think current industries will cope with these new emerging technologies?

References:

Cryptocurrency Market Capitalizations | CoinMarketCap. (n.d.). Retrieved October 16, 2017, from https://coinmarketcap.com/

Full disclosure: I am an advisor for The Bee Token.