The sharing economy in five words is the commodification of excess capacity.
Or in more simple terms:
‘You using that?’
‘Can I borrow it?’
‘Sure. Five bucks an hour.’
A lot of our things tend to stand idle collecting dust most of the time. A lot of our things are exactly what other people want and need, but don't want the cost of buying them. The sharing economy allows havers of things to share them with needers of things.
In the sharing economy, resources that were long thought of as personal have become communal, or shared. I’m not using my house, car, bike, power drill, or parking spot, so someone else can rent it from me. I can make some money, while they get a cheap solution to an otherwise expensive problem — and together, we satisfy all our needs while producing and using less stuff. As an example, we use our cars roughly 5% of the time and can get around with a fraction of the vehicles we have — if we shared them.
The sharing economy is great news for the seller, the buyer, and for planet Earth. It’s also great news for investors, seeing that it’s projected to grow to $335 billion by 2025.
How does it work?
For the sharing economy to function:
- Buyers and sellers need to be able to find each other easily
- Goods and services needs to be delivered and paid for
- Both parties need to trust one another
Digital platforms do all of this, and critically, bring down the price for doing business to a point where both seller and buyer are happy to engage.
Platforms, which we’ll refer to as apps from here on, connect people offering things with people needing things. Things can be all sorts of things. It can be a place to stay via an app like Airbnb, or a taxi ride via Uber, food delivery via Deliveroo, and so on.
Apps are the enablers and the intermediaries. It’s their job to provide a secure and easy-to-use foundation for sellers and buyers to interact and transact.
Sharing economy apps provide people with more ways to earn a living beyond a traditional full-time job, while providing people on the other side of the apps with on-demand anything at a fraction of the price and hassle it would otherwise cost.
One thing people disagree on with the term ‘sharing economy’ is that it seems to imply everyone is sharing in the benefits of this new economy - and that just isn’t the case. There’s a dark side to the sharing economy, too.
What’s wrong with the Sharing Economy?
Some people mistakenly call the sharing economy the ‘peer-to-peer’ economy. This couldn’t be further from the truth.
The sharing economy app that enables peer 1 to transact with peer 2 works as the user-friendly face of an oftentimes less friendly corporation. The sharing economy today is peer-to-corporation-to-peer, not peer-to-peer.
Our data and money, as well as the power, influence, and reliance that comes with it, all travel through centralized software controlled by one or more giant corporations, which — despite their marketing departments’ best efforts -- don’t have your best interests in mind.
You may have heard of the term ‘surveillance capitalism’. Its author, Harvard professor and activist Shoshana Zuboff, defines it as “the unilateral claiming of private human experience as free raw material for translation into behavioral data.” In simpler terms, this is all about Big Tech capturing your private data and monetizing it without your knowledge. We’re talking about incredibly personal and intimate data, which allows someone with enough computational power to predict your behavior better than you could. This data is either sold for profit to the highest bidder, or used to feed you hyper-targeted ads that businesses are all too happy to pay for.
For as long as we follow the peer-to-corporation-to-peer model, we’re much like animals on a factory farm for Big Tech. For as long as we rely on Big Tech to provide these apps and platforms, an exchange is happening: We use the apps, they take your data and sell it.
Beyond Big Tech, there’s another big fear: Big Brother, the government's role in the sharing economy. The World Economic Forum notoriously said ‘you will own nothing and you will be happy’. I’d love to sit down with the people who thought publishing that was a good idea. Are we headed for a world where Big Tech and Big Brother team up to bully us into owning nothing and being happy about it?
So in summary, the sharing economy today may pretend to be peer-to-peer, but it’s the opposite. It’s highly centralized, meaning we have to trust corporations with our most intimate data, trust that they use our data in our best interests and not their own, trust that they don’t leak any data or get hacked, trust that they treat the buyers and sellers on their platforms well… I can see you’re raising your eyebrows, so I’ll stop there. You get the point.
How is Web3 fixing the sharing economy?
The sharing economy built on Web3 is a decentralized sharing economy, as opposed to the centralized one we have today. The big difference is that a decentralized sharing economy actually is peer-to-peer, with no corporate intermediaries.
Imagine you could use the Uber app without having to rely on the Uber company.
Think about it…
Exactly. We thought so too.
In a decentralized sharing economy built on Web3 (blockchain), people can continue to buy and sell goods and services via apps the way they do today — without having to trust corporations who are notorious for misusing and selling our data, being hacked, and unethical business practices etc etc etc.
More than that, anyone, anywhere can use, work for, co-own, co-govern and earn from these apps, rather than being mere pawns at the whim of Tech Giants who can decrease their earnings and increase their cut whenever they please, a bit a lot like a pimp.
Blockchain technology replaces corporations at every level by removing the need to trust a third party at every level. The essence of blockchain is that we no longer need to trust central authorities because we can trust the permanent unalterable ledger which we all have equal access to and rights over, instead. This essence is now replacing the need for trusted intermediaries in the sharing economy.
A truly peer-to-peer sharing economy means lower fees for buyers and sellers since there are no more corporate third parties to pay or trust. Rather, buyers and sellers become the third party. Instead of corporate-owned apps, we have people-powered apps known as dApps, or decentralized apps.
With no intermediaries come less fees, and with less fees comes less friction. People will always choose the path of least friction, and financial friction is the most frictionful of all frictions (I know that’s not a word). Whether something makes sense to share or not depends on the price, and price is relative. One thing that makes sense to share in the Philippines may not make as much sense in Philadelphia.
Uber famously said they’re just a technology company bringing passengers and drivers together. Web3 dApp communities will say their open-source code is doing the same.
People are astounded at the rate at which Airbnb, Uber, and the like came onto the scene. When Web3 dApps providing the same services as Web2 apps, but cheaper, pop up on the scene, the behemoths of the centralized sharing economy will need to adapt or be replaced faster than they replaced the traditional firms before them.
What role does peaq play in the decentralized sharing economy?
At the beginning of this piece, we said that the sharing economy is a thing to begin with because of the platforms (apps) like Uber, Airbnb, and so on, which bring buyers and sellers together.
peaq is a platform of platforms. peaq is a decentralized platform on top of which people build decentralized platforms. That is to say that both peaq and the dApps being built on peaq are community-owned and -governed.
The peaq network is specially designed for people to build dApps for people to exchange goods and services involving connected things — i.e connected machines, vehicles, robots, and devices. dApps like vehicle-sharing, ride-sharing, delivery of goods, sharing of parking spots (via sensors) or green energy, and so on.
At peaq, we believe that we can only really call it a sharing economy when everything is shared, from the goods and services through to the apps and networks we use to buy and sell them. This is what peaq provides. On peaq, communities:
- Build, maintain, and earn from the underlying peaq network,
- Build, maintain, and use whatever dApp they see a need for, wherever they are,
- Own and govern the apps they use, contribute to, and/or are interested in,
- Own the machines and pools of machines that run in their community,
- Vote on and fund the machines in their community.
In today’s sharing economy, machines such as vehicles may be owned by individuals, but the value they create is controlled by one company. Doing things on peaq can break that model, allowing for communal funding and ownership of machines of all kinds. This can give communities, especially poorer communities, access to vehicles, machines, and devices that they otherwise wouldn’t be able to afford, simultaneously opening new markets up to manufacturers. Communities could co-purchase from manufacturers. This way, the barriers to access to new tech don’t keep out the less privileged.
The sharing economy represents us reverting back to something quite natural to us humans, even if it may feel foreign to some. We're going back to community-based living in a world that's grown lonely and polarized. To share is human. To own is human. We don't need to choose one or the other.
The sharing economy makes peoples’ lives better and is better for the environment. The decentralized sharing economy will build on this, making the environment, peoples’ lives, and society better.
The World Economic Forum said you would own nothing and be happy.
peaq says you can own everything and be happy.
So, where are you building?
Want to build the Web3 Economy of Things?
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