The sharing economy, where goods or services are shared through online platforms, has been a longstanding concept. Historically, communities shared limited resources rather than owning everything themselves.
The Internet’s Influence on the Sharing Economy
The internet has transformed the sharing economy, blending it with the gig economy. This allows individuals to make money from their unused assets like rooms, houses, or cars through platforms such as Airbnb and Uber, providing affordable transportation and accommodation options.
Changes in the Sharing Economy Landscape
While the sharing of smaller items like home DIY tools has not gained significant traction due to transaction costs and convenience favoring outright purchases, innovative technologies such as blockchain, the Internet of Things (IoT), and the Business of Life Things (BoLT) are starting to change these limitations, showcasing the potential of a true sharing economy for individuals, the economy, and the environment.
Overproduction vs. Underconsumption
In developed countries, there is still a strong inclination towards individual ownership. However, the increasing cost and space requirements of assets, combined with their underutilization, are prompting a shift. For example, private vehicles are estimated to go unused for 95 percent of their lifetime, suggesting the consideration of alternative transportation methods such as car rentals.
Traditional Platforms and the Emergence of Blockchain
Traditionally, third-party platforms were essential within the sharing economy to establish trust in transactions. However, the emergence of blockchain technology, with its features like decentralization, transparency, immutability, and security, is challenging the need for these traditional platforms, providing a more trustworthy and cost-effective environment for peer-to-peer exchanges.
Companies like Beenest are using blockchain to enhance the house-sharing economy by facilitating direct connections between hosts and guests, eliminating the need for centralized intermediaries and addressing concerns related to data privacy and transaction costs.
The Role of IoT and Blockchain
Smart contracts, a component of blockchain technology, are simplifying trust between parties in the sharing economy by automating the execution of agreements. Companies like Slock.it are developing applications for the sharing economy that leverage blockchain and IoT to enable autonomous access to shared resources, reducing the need for third-party intermediaries and operational costs.
Expanding the Potential of the Sharing Economy
The increasing connectivity of devices, with an estimated 23 billion connected devices in 2018, is enabling the sharing of a wide range of assets and resources, from physical spaces to intangible services. This includes the potential for individuals to share electricity generated from solar panels, unused hard drive space, or excess internet data, fostering greater innovation and entrepreneurial opportunities within the sharing economy.
Facilitating Microtransactions
The introduction of blockchain and cryptocurrencies has opened up possibilities for microtransactions, enabling the sharing of small-scale assets and services. Companies like IOTA are developing distributed ledger technology to facilitate fast, secure, and zero-fee payments, further expanding the potential for peer-to-peer exchanges and asset sharing.
The Future of the Sharing Economy
Technological advancements are projected to drive significant growth in the sharing economy over the next decade, with peer-to-peer lending, music and video streaming, auto sharing, house sharing, and online staffing playing crucial roles. This shift towards a more collaborative and efficient use of resources has the potential to address overconsumption and waste, offering individuals greater opportunities for income generation through the sharing of their assets.
Regulations, safety measures, and policies will need to be developed as the sharing economy evolves, but the increasing accessibility of products and services through individual contributions is expected to drive competition and innovation within the sharing and gig economies.
