DIGITAL CURRENCY: THE
DIGITAL CURRENCY: THE AIRBNB AND UBER KILLER The digital currency Ethereum allows people to run so-called smart contracts, potentially creating a decentralised sharing economy, and could be the beginning of the end for firms like Uber and Airbnb. By Nikolaj Nielsen Virtual currencies may one day challenge the dominance of digital giants such as home-rental app Airbnb and ride-sharing app Uber. platforms and skim fees off their users around the globe. It is a business model that has earned them tax and labour rights. Destroying that business model - while keeping the service with the same level of trust when things go wrong - could be the next big step in the so-called sharing economy. The vision of a decentralised sharing economy has gripped people who see virtual currencies as a driving force behind what today remains very much a niche movement. Aaron Wright, director of the Blockchain project at the New York City-based Cardozo School of Law said "I think it is very early days," referring to the new wave of cryptocurrencies. and down over time. Despite internal turmoil among its user base, Bitcoin traded above the market price of one ounce of gold Many similar currencies have since followed Bitcoin's release, with a total combined market cap value of around € 27 billion and growing. BLOCKCHAINS AND ETHEREUM Not all virtual currencies are the same, but one thing all of them share is the underlying use of blockchain technology. Blockchains store information across a network of personal computers. It means no company, government, or person owns the system. Information on blockchains cannot be altered, reversed or changed. And everyone helps run it. Bitcoin is by far the most popular virtual currency on the market. But two years ago, Ethereum appeared and has since become Bitcoin's biggest rival. 32 — SHARING ECONOMY & EUROPE MAY 2017
Unlike Bitcoin, Ethereum is also able to transfer information and value of any kind. "It [Ethereum] resembles a new level of understanding of what cryptocurrencies can do," said Walid Al- (ISOC). Sometimes described as a decentralised world computer, Ethereum can run programmes, exchange information and value. SMART CONTRACTS that may one day rival more traditional online currency that allows for so-called smart contracts. "We can use this new database that nobody owns. That means Uber doesn't own it, that means Airbnb doesn't own it," said Wright. Wright said people then started thinking about how the blockchain could be used in the sharing economy. happen in 20 years," he said. THE INNOVATORS Some are already trying. the smart contract and Ethereum concept into practical applications. A smart contract is a small programme that acts as a digital middle-man, gets money from multiple people, and provides designated services. Placed on a blockchain, which is immutable and transparent by default, it could create the trust people seek when they sign up to services like Airbnb and Uber. According to the company's website, Slock.it wants to give everyday things, like work space rental, the ability to receive payments and enter into complex agreements and transact without intermediaries. In March, it secured some million in seed money to develop its Universal Sharing Network (USN) project. Photo: BTC Keychain SHARING ECONOMY & EUROPE MAY 2017— 33
