What do Uber, Airbnb, TripAdvisor, PayPal etc have in common. Right, they are super successful and highly valued and …. ?
Uber and Airbnb fall in the category of Shared Economy. Paypal has changed the way financial transactions are carried out and TripAdvisor makes the rating and booking of hotels and trips easier. So, what is the common theme? The common theme is that all of these are centralised, they control (we can debate this) what gets published and who gets the maximum attention (we can debate this as well). So say Airbnb decides tomorrow that person X in San Francisco should get better hits than person Y then they have the potential to do that. Again, I am not way suggesting that they are doing this but they do have the right (well, err ..?) and the potential because there are like a central authority now. For that matter, we have made them almost like banks, governments and visa.
Ok, and who can disrupt this business model. It is Blockchain.
So what is Block chain, as a starter, it is completely decentralised. It is not stored on any central location. It is distributed across volunteer machines in a true P2P fashion across the world. It is encrypted with public key and private key and is impossible to tamper with (well, until you implement it incorrectly, see DAO hack)
Let us see how it would work for say Uber. So now, instead of centralised Uber, we have an Uber in which all the people who want to drive a car for living attach that meta with their profile in the Blockchain. So say there are 10,000 people in Toronto who register on the distributed block chain (remember no centralisation here) their intention to drive when hired. Now when a passenger wants a ride, there is a filter which finds the city and the driver on the basis of reputation on the Blockchain and gives us the result. Further, if along with driving I also put my intent to rent out my extra room on the block chain then if someone wants to book a room then they specify the filter in the same way on the blockchain and get back the listing of all the rooms that they would be interested in.
So once I use the blockchained car service or the room then I can leave a ranking of the service. With this data being IMMUTABLE, without any CENTRAL control and co-exists on several thousand computers across the globe in an encrypted format, there is NO WAY in which I could go and change the ranking. Some of the central aggregators would always face challenges for this. Blockchain on the other hand makes it virtually impossible ( in the absence of central control to get into frauds like this). Since the block chain is immutable for someone to go back and change anything, it would have to be done across thousands of machines and when other machines find a change in information on a set of machines which does not match them then they would start blacklisting those machines.
Uber, Airbnb and TripAdvisors are great central aggregators which help with automating workers on the periphery. What does that mean? It means that if you want to drive a car, you connect with Uber and it would automate your job of finding customers. Likewise for Airbnd and TripAdvisor. Whereas, Blockchain automates the centre of the ecosystem. Hence instead of putting a Cab driver out of job, it would put Uber and aggregators out of job since it would be connecting the consumer directly to the service provider.
Blockchain replaces this central system with a decentralized ledger of chained records. Each record is connected to the one before and the one after it, yielding a traceable history of every transaction. No record can be deleted and no existing records can be altered.
There are other instances where there is a direct attack on the central guardians of information or man-in-middle. Lloyd Marino suggested,
For instance, Mycelia, started by English singer-songwriter Imogen Heap, is developing a way to encode a blockchain contract into songs, so fans would pay the artist directly, without going through a record company. A blockchain e-reader could download ebooks directly from the authors, bypassing both publisher and bookstore, or even Amazon.
Hence, there is an amazing amount of interest and possibilities of what we can do and what we can achieve with Blockchain. Stay tuned!