The sharing economy is a community-centric economic and social model that involves shared access to goods, services, data and services facilitated through online and often peer-to-peer (P2P) exchanges.
Sharing economies enable individuals and groups to monetize their idle and underused assets in a way that wasn't possible before.
For example, Airbnb is a part of the sharing economy that allows real estate owners to rent out their unused apartments or empty rooms to other community members in a way that benefits both parties. The renter can make money, while the rentee has more choice about accommodation and can get a more traditional 'local' experience when traveling.
Blockchain and the Sharing Economy
Blockchain-based platforms have also emerged for exchanging various goods and services in the sharing economy. For example, Golem allows users to exchange idle computing power with other users who need to do substantial computation and don't have access to enough computing power.
The difference between blockchain solutions and the earlier sharing economy businesses such as Airbnb and Uber is that blockchain solutions do not involve trusted third parties - they are decentralized. This provides some practical advantages as well as disadvantages.
Advantages of blockchain solutions include lower cost, greater transparency, permissionless participation, and platform security. Trusted third parties - also called middlemen - cost more, don't necessarily operate transparently, can exclude people from participating on their platforms, and are generally more vulnerable to hacks.
However, trusted third parties have the advantage of providing arbitration in the case of disputes between users. They can reverse transactions, manage reputation systems, and otherwise maintain stability within their community. All of those features are more complex to implement in decentralized systems.
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- DecentralizationProcess of redistributing or dispersing functions, powers, people or things away from a central location or authority
- EconomicsSocial science that analyzes the production, distribution, and consumption of goods and services
- Cluster: Blockchain & cryptocurrencyA cluster of topics related to blockchain and cryptocurrency.
- AirbnbAirbnb provides an online platform for listing, searching and booking rental accommodations.
- Golem (cryptocurrency)Golem is a decentralized network of computers around the globe that provides access to a decentralized sharing economy of computing power to the public.
- SALT (cryptocurrency)SALT is a lending platform designed for blockchain-backed loans.
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