How Blockchain Will Change the Sharing Economy

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Think of how the sharing economy has exploded in the past decade. If you’ve taken an Uber to the airport or rented an Airbnb, you’ve been a part of it.

We’re even at a point where renting out personal items is a viable business model. For example, Omni Storage stores items you’re not using — just like a normal storage company — but they also rent your items out to people. Skis, guitar, winter jacket. It’s all available for rent (with the owner’s permission) via an app.

We all hold onto certain possessions, because we plan to use them eventually. Or so we tell ourselves. Why not make some money off of our stuff instead of letting it go unused?

That question is at the heart of the sharing economy, and we’re going to be hearing a lot more about businesses like Omni in the next few years.

This is what it can look like if blockchain is involved.

Changing Value

Futuristic sharing concepts will only work if many other considerations are taken care of.

Each item has to be documented, proven authentic, assigned a current value, and even insured. And blockchain can be extremely useful here.

Say I register a guitar on blockchain. In theory, I would be able to access information about where it is, as well as its current worth and condition.

This isn’t as far-fetched as you may think. Seven years ago, a friend of mine sent me a business plan for a platform that allows people to rent out their art. It’s funny to look back on that now, because we’re actually at the point where a concept like that is possible. And renting or leasing is just a part of it.

Imagine the entire art economy on top of blockchain, where individuals could own fractions of a work.

We have the ability to attach microchips to items and register them on blockchain, making it feasible that someone could rent an expensive piece of art and keep it in their office for a few years. It just means assigning the rights values. Take it a step farther and once we have that link between the physical asset and the digital tokenized representation of that art, buyers and sellers can invest in a small percentage of the art. 100 owners. One Michaelangelo.

Shifting Responsibility

With this system of renting comes an inevitable question: What if something happens to your stuff?

Renting out a guitar you pluck on once a year sounds like a good deal, but what if it gets broken or lost? You’d need insurance on it first to have peace of mind.

We actually thought about this at Chronicled a couple years ago. We were talking to some people who had built a platform for filmmakers to lease out their film equipment. But film equipment is very expensive — a lens could cost $10,000. And getting insurance isn’t always a simple process.

So, we built a proof of concept that allowed people to authenticate high value assets, place a microchip on them, and register them on blockchain. That was the link between the record of its authenticity and the data about its condition. Through the mobile app, you could quickly purchase insurance on it.

To buy insurance on an item this fast, you need to have available data on what it is, what it costs, and what condition it’s in. But if that was all collected and stored on a blockchain network, you could build a platform to quickly grab this data and add insurance accordingly.

Letting Go Of Ownership

If this type of radical sharing economy were to emerge, it would constitute a major shift in the way we view ownership and material possessions.

And the storage facility concept is a great model for easing people into that thought process. You’ve already taken the first step by saying, “This isn’t important enough for me to keep in my home.”

When something sits idle for a long period of time, it becomes an underutilized asset. It makes sense to rent out items you own that simply sit in storage, costing you money.

Will a future sharing economy like this start moving us away from a consumer-based, materialistic mindset? Is it possible for people to be so accustomed to sharing that they change their attitude about ownership? Is it possible for tokenization and fractional ownership of possessions, art, real estate enabled by said tokenization to lead to a new concept of consumerism?

Maybe. Western society isn’t really built that way, so it would be a monumental change in how we view possessions.

But it’s not impossible to make that adjustment.

Adjusting Our Attitudes

It is possible to change your view on material ownership.

I know firsthand. When I first moved to San Francisco, my apartment complex was robbed by a maintenance worker. He took jewelry I inherited from my grandmother. They ended up catching the guy, but I never got the jewelry back. And after that robbery, I no longer had any possessions I cared much about.

That event makes it easier for me to accept the notion of the sharing economy. I don’t mind putting items in storage and letting other people rent them out, because I don’t feel attached to objects.

I’m sure some people don’t see things that way, but there are plenty of people who feel the same as I do.

That’s why I’m interested to see how far we can take the sharing economy in the coming years and how blockchain can help make it a secure, seamless system.

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