The Future of the Sharing Economy Is a World Built Like Bitcoin
The peer-to-peer economy has grown exponentially in recent years. Companies like Uber and Airbnb have the investor community charmed, with valuations comfortably in the multiple billions. They have also managed to leave regulators in a complete kerfuffle.
But according to at least one leading venture capitalist, as revolutionary as Uber and Airbnb are, they are only the beginning of a larger movement that is being powered by the connected world we live in. In his vision of the future, nearly all business will be conducted on a radically decentralized peer-to-peer level.
“Think about gambling without a casino. Think about stock trading without an exchange. Think about real-estate transactions without deeds. Think about transactions without clearinghouses. That is a world we are heading into,” Fred Wilson, the founder of New York City venture capital firm Union Square Ventures, told an audience earlier this month at the Collaborative, Peer and Sharing Economy Summit held at New York University’s Stern School of Business. and co-hosted by the Berkeley Entrepreneurship Center for Innovation.
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Companies in today’s peer-to-peer space still have a skeletal corporate hierarchy that supports them, a central nerve axis that runs their marketplaces. For example, Airbnb’s corporate staff runs the Internet infrastructure for the apartment rental marketplace and Uber’s corporate staff runs the web application that allows drivers and passengers to connect through their smartphones.
But in the next 10 years, as people become even more connected to one another through the technology in their pockets and the technology itself evolves, Wilson believes the peer-to-peer economy will thrive without the need for a centralized authority. “Peer networks are the most powerful networks of all — meaning that everybody is a peer in the system, meaning there is no hierarchy in the system whatsoever.”
The most widely recognized decentralized system right now is Bitcoin, the cryptocurrency built on open-source software, Wilson says. There is no central repository and no single administrator of the Bitcoin payment network. Rather, Bitcoin is built with what is called a “block chain architecture,” a digital public ledger for all transactions within the system. Wilson predicts the same technology will have far reaching implications beyond Bitcoin.
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“The ultimate sharing economy is the sharing economy without middle men, without somebody taking a fee. When somebody can drive you where you are going and they capture 100 percent of the dollar value of that transaction and pay nobody for that, that is a truly distributed system,” he says. “When you think about a system that is truly self-governing and self-regulatory, you will not need regulators. And what will regulators do when they see systems emerge that literally do not need them to regulate them?”
When we get to an economy where we are interacting in a peer-to-peer marketplace without a centralized axis of power — and for Wilson, it’s a question of when, not if– then we as a society will have to confront some fairly fundamental belief systems that may no longer be relevant.
“What is the right ownership model for that kind of a system? Is it a corporate system or is it something else? What is the role of capitalism in that system? Will there be venture capitalists?” he asks. “What is the role of government? What is the role of capitalism? What is the role of corporations? I think those are real questions that we are going to have to grapple with in the next 10 or 15 or 20 years.”