Many trends on the horizon offer opportunities that could transform our cities. From self-driving vehicles and the sharing economy through to cloud computing and blockchain technologies, each of these trends is quite significant on its own. But the convergence of their disruptive forces is what will create real value and drive innovations.
Take blockchain and the sharing economy as an example. Bringing these two forces together can potentially disrupt established companies like Uber and Airbnb. The success of these companies is largely due to their ability to make use of existing assets people owned, that had been paid for, but from which new value could be derived.
Effectively, these companies set up digital platforms that harnessed “excess capacity” and relied on other people to deliver the services.
The same applies to other so-called “sharing economy” companies that merely act as service aggregators and collect a cut off the top. In the process, they gather valuable data for further commercial gain.
But can this business model be challenged and enhanced for the benefit of those who are delivering the service and creating the real value? Can technology be used to bypass the third party and allow direct peer-to-peer collaboration within a distributed governance structure? What could a “peer-owned” and “peer-run” marketplace look like?
Blockchain technology could just be the answer.
You can think of blockchain as the second generation of the internet – a transformation from an internet of information to an internet of value.
Blockchain allows suppliers and consumers – even competitors – to share a decentralised digital ledger across a network of computers without the need for a central authority.
The assets that can be described on the blockchain can be financial, legal, physical or electronic. No single party has the power to tamper with the records – sophisticated algorithms keep everyone honest by ensuring data integrity and authentication of transactions.
But the impacts of blockchain go well beyond financial services and transactions. Its real value is in establishing trust-based interactions and accelerating the transfer of governance from centralised institutions to distributed networks of peer-to-peer collaboration.
The impact can be profound: a centralised institution acting as intermediatory in a transaction of value is now at risk of being disrupted because the same service can be provided on the blockchain through peer-to-peer interaction.
Blockchain gives service providers a means to collaborate and derive a greater share of the value for themselves. Smart agents on a blockchain could do just about everything provided by a service aggregator.