Blockchain Buzz
One sentence came up over and over again during the OuiShare Fest 2016"I want to go to this panel about the blockchain… I really need to understand this thing." Everybody seemed to be keen on getting a better understanding of blockchain technology - no matter if experts in their own field or just a curious participant.
At the largest European conference on the collaborative economy, the diversity of the collaborative movement showed in many ways. While some people gathered in a tiny tent to discuss the application of Permaculture in our daily lives and our own organisations, many stayed at the main stage to hear about the next big thing - the blockchain - and how this somehow is really important for the future of the collaborative economy.
As a newbie to anything that has to do with "tech" I am intimidated when the conversation revolves around bitcoins, blockchains, smart contracts, and DAOs. So for everyone who feels the same let's get a grip of what's going on in this parallel world and why it matters to the future of the collaborative economy.
What I found was enlightening and somewhat disenchanting. The blockchain is much more a technology than anything else. I set out to understand, truly grasp what it is about, but what I have come to realize is that you do not have to get behind the ins and outs of how a technology works to understand what you can use it for. And that's what's key regarding blockchain technology. In the collaborative economy we have to understand the potential and opportunities that blockchain technology offers. I see it much like the internet. I don't know how exactly information gets transmitted, I don't know why I can write a blog and make it available to millions of users within seconds, however, I can use this technology for the sake of knowledge creation and networking, for example.
Still I take on the challenge and share my humble understanding of blockchain technology and its meaning for the collaborative economy. First of all, current transactions within the sharing economy, say like borrowing a mountain bike for one day, require a sharing platform to bring two people together and find an agreement and - most importantly - trust each other. This latter aspect is still subject of controversy for users of collaborative platforms. Fans of blockchain technology point out the fact that the "blockchain way" of doing business is essentially more reliable and trustworthy than traditional trust-building mechanisms. It offers ways in which users can be verified and transactions can be undertaken without any broker.
How does this work out? The technology makes use of information on all transactions that ever happened within a network, verifies users this way and recognizes the exact amount somebody should pay for a certain service. Information on transaction is stored in decentralized computers that are connected to the network and can communicate if information is necessary. The blockchain is often described as a network's ledger. For me, this wasn't insightful enough, so I looked into the definition of the word ledger. It is "a book in which the monetary transactions of a business are posted in the form of debits and credits." But, differently from a traditional track keeping system, this ledger is not based on any one organisation or company; it is decentralized by storing information on a multitude of computers. This way, the mountain bike could for example have a lock that is connected to the network, that unlocks only once the verified and trusted other user attempts to open the lock.
The chances and opportunities people see in this technology is that it could solve a key issue within the collaborative economy - trust - in a way that does not depend on a central organisation or a subjective means of reputation. It is thus independent from large companies stake, and in this way embodies what the collaborative economy stands for, independent individuals that cooperate and collaborate. Information about user reputation could in the long haul even be transported to other collaborative platforms.
What's more is that this way of verifying information about an individual could also assist in creating fair contracts between somebody offering a service and someone delivering it. The time spent with my borrowed mountain can be verified by "blocks" of information that are decentrally stored on computers connected to the network, through smart connected locks for example. This information can then also be used to determine how much I owe the bike owner.
How about the safety of this technology? If this enormous amount of information is stored somewhere, how to make sure the system doesn't get attacked? Here again the crucial aspect seems to be the decentralization. While one single server is very vulnerable, a multitude of computers, essentially any single member's device, increases the system's resilience. If one device is attacked, still the other x million keep working. As for data safety, the information is in essence stored in an encrypted way on many devices and only becomes available to identified users and a specific moment in time and only in relation to the required transaction. Although I cannot not fully judge if it is actually safe to make my personal data available to a system that operates in this way, the fact that no single one device, server or company owns my personal data is somewhat soothing.
So far so cryptic. The real challenge for this technology, especially in the realm of the collaborative economy is to show the users that it works. And that it is indeed trustworthy and reliable, without a person or organisation steering it. Because thus far people's mindsets still prefer to trust an "actual" person or organisation, despite the shortcomings in efficiency but also due to centralization of power.
And finally, what I noticed while learning in a tiny tent about permaculture: At OuiShare Fest I met so many people coming together seeking to reconnect with communities and to build personal relations. But at the same time the complete opposite side of the spectrum, advocates for efficiency and technological advancement, were just as present. And they all came together at OuiShare Fest. To me, it is the beauty of these events to get a glimpse of this diverse sharing spirit.
Personally, I am convinced that if we increase the efficiency and thus the impersonality of collaboration and cooperation, not much of this sharing spirit is left and the collaborative economy truly diminishes to what some have termed the "access economy". We do however need to appreciate the potentials of verification, reputation building, and smart contracting that blockchain technology offers, because this can assist in mainstreaming collaborative practices. Just that they cannot and should not replace human interaction. Because in the end what we trust most is another human face, a quick conversation, a shared moment.
By Paula Land