The sharing economy is big business. Platforms like AirBnB, Uber, WeWork, Upwork, and others in the industry have generated over $15 billion in 2015 alone, and the whole industry is predicted to grow as high as $335 billion within the next five years.
If you are a regular user of the internet, most likely you would have tried at least one or two of these platforms. Almost everybody knows how to use Uber to get a cheaper ride than yellow taxis. Almost everybody knows how to use Airbnb to rent a room or apartment.
While the industry has been pretty much welcomed by everybody, it has one huge problem that needs to be addressed – centralization of power. In the sharing economy industry, one winner takes all the market. “One winner takes all” also means that there are monopoly practices in the sharing economy ecosystem, and these platforms take full advantage of it.
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These businesses often take ridiculous amounts of percentage for the fees. Experience hosts in Airbnb don’t like the 20% commission fees they need to give to Airbnb but they don’t have much choice if they want to keep making money. Upwork freelancers also don’t like 10-20% fees that Upwork takes from them every time they find new clients. But, once again, it’s the place where they can find the most work.
Uber also charges two types of fees, a flat fee that varies by market and a variable fee that’s different all over the world. In some locations where Uber is uncontested, the fees might become much higher. And then, we also have WeWork, where the prices for their co-working spaces are often much higher than local competitors by 30-50% more.
Enter The Blockchain
For a long time, many people have been asking themselves if there are good alternatives to this lifelong problem with the sharing economy industry. Well, enter the blockchain. The blockchain allows decentralization to happen by cutting out middle-men and converting “the need of trust” into codes.
Unlike AirBnB, Upwork, or Uber, where you need to trust the developers of the platform, the blockchain allows you to review all the smart contracts, without the need to be dependent on any centralized entity for payments and services.
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There are some blockchain-based platforms that try to tackle the centralization of the sharing economy industry where they explicitly claim that their decentralized protocols would allow service providers to cut out all the super-high fees and still be able to maximize their profits from the users of the sharing economy.
By having this advantage, the service providers on these decentralized platforms can also charge less to the users and users will be able to find alternatives with lower prices than AirBnB, Uber, Upwork, etc. A win-win solution for everybody.
The Foundation For Decentralized Protocols
There’s a DeFi (decentralized finance) bubble right now. After Compound protocol introduced the concept of yield mining where borrowers and lenders in its platform are incentivized by COMP tokens, the hype around DeFi just blew up. Total Value Locked (TVL) in DeFi has grown to over $1 billion recently. This DeFi bubble has created a financial foundation for other decentralized solutions.
Ethereum and EOS are the top platforms to create these decentralized solutions. Without them, it was impossible to create decentralized protocols. For example, there’s TimeCoinProtocol, which is operating on top of the EOS blockchain. TimeCoinProtocol is specifically targeted on rebuilding the sharing economy market by utilizing the EOS blockchain. As mentioned on CoinTelegraph, TimeCoinProtocol is dedicated to building various DApps (decentralized applications) to cater to every niche in the sharing economy ecosystem.
One example of the first DApps on TimeCoinProtocol is eSportStars which is a platform to connect players from all around the world to create tournaments and compete against each other. Some top Japanese teams have even publicly agreed to join eSportStars to attract users. Not only that, but TimeCoinProtocol also plans to convert its popular TimeTicket platform to use the blockchain and become fully decentralized. TimeTicket already has more than 250K users in Japan alone.
Another example of this type of decentralized economy sharing solution is Origin. Origin Protocol is built on Ethereum and also plans to tackle the high commission fees that are currently plaguing the centralized economy sharing platforms. By making a DApp protocol on top of Ethereum, Origin believes they can help both service providers and users to cut out the middleman and make them transact in a trustless environment.
You can check out the full list of some of the top DeFi protocols available today on Defiprime, a media outlet and analytical service provider that conducts research and lists the best DeFi projects.
Decentralized Sharing Economy Is A Win-Win Solution
By providing a technology alternative to centralized sharing economy platforms, blockchain-based protocols will be able to help both service providers and users to avoid ridiculously high fees in the traditional sharing economy.
These decentralized solutions also help the users to protect their data as there’s no data reselling that would happen in these protocols. They are community managed and fully open source. Everything is much more transparent and trustworthy. The records on the blockchain are also immutable so you can trust the user background check on these decentralized platforms.
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An honest alternative to the sharing economy industry can only be achieved if the power of the platforms is decentralized in the first place. That’s why a decentralized protocol that tries to take aim at the sharing economy should be supported, as they are not controlled by one single entity. Not only that, but every record is also verifiable and immutable on the blockchain – which makes these decentralized protocols to be more transparent and trustworthy compared to the traditional sharing economy websites and applications.