February 20, 2017 Chris Riddell

Future Trend | Blockchain is disrupting Trust

What does disruption mean in 2017?

There is no doubt at all how fast things are moving when it comes to new on-demand platforms. We’ve got more choice than ever before and the power balance has shifted well and truly into the hands of the consumer, literally.

We get into cars with people we’ve never met, and millions of people sleep in beds of people they’ve never met, and probably never will. We are even hiring impersonators to help us be in two places at once (yes this is real…), all in this world of everything being instant.

It’s the continuing rise of the on demand, the ‘I want it now’ economy, but there’s a flaw that’s becoming ever more exposed as consumers demands outstrips the providers ability to keep up.

Yesterday meets Tomorrow and creates Friction

The main issue at hand here, is we’ve got new world platforms such as the likes of Uber, AirBnb, Airtasker and TaskRabbit operating under old world structures and it’s getting frictious. There’s many cases where we’ve seent this breakdown and cause absolute chaos in almost every country around the world.

 

Uber and Taxi Drivers rioting in Marseille (2016)

 

Already this year we’ve seen clashes breaking out in Rome between Uber and Taxi Drivers over an ongoing dispute over regulations and laws. In almost identical scenes, just last year France again saw rioting on the streets of Marseilles over the same issues. Incredbile vision was streamed around the world of Uber cars being set alight with riot police being deployed to stem the violence.

On the AirBnb side of things, it’s not all a story of happily ever afters. Whilst there hasn’t been any reports of hotels and hosts rioting in the streets, the inevitable horror stories behind the curtains of many AirBnbers is one that is building momentum by the day. You can easily find numerous of forums online and see the swathes of people complaining about not being paid, houses being emptied overnight or worse being trashed. When the host isn’t able to recoup the losses, insurance unsurprisingly won’t step in.

These issues are fundamentally coming from where processes, legislation and structures that were put in place hundreds of years ago, are now creating conflict with a world moving at lightning speed. The two together simply don’t work, and they never will.

You see – it’s a trust thing

In a world many moons ago, if you booked a Taxi, you had a really good reason for being confident the drivers, and taxi operators had been vetted and checked, and were who they said they were.

The same went for Hotels. When you checked in, you had a level of service you would expect, because of the ‘brand’ and also that government regulation meant that numerous standards were being adhered to. On the rare occasion things would go wrong, you’d have either a head office to complain to, or a government department to get help from. In the most simple terms, you used to have trust in the institutions of our world, and that was expensive and came from an era of excess.

To put it very simply. You had ‘trust’ in the institution. Trust was expensive, and came from an previous era of excess.

The big change we have seen now, is that ‘trust’ over the last few years has moved from the institution, to the individual.

We trust hosts on AirBnb by their ratings, and drivers on Uber by theirs. If the number of the stars next to the providers name isn’t up to our liking – easy, we can simply walk away from the transaction and find someone better.

So far so good, but there’s two inherent flaws in this system. The first is that the trust system is open to fraud, and can be manipulated with the right intent and skills. You’d have to do a bit of work to do it, but it’s possible, and that means without doubt it is being done.

The second major flaw in this ‘trust system’ is so far it is very linear and one way. The trust is designed to give the consumer the confidence, that they are dealing with a reputable provider. There is very little validation provided for providers to have true confidence in the customers they are providing services to. This becomes a particular issue with sharing economy platforms such as AirBnb where entrepreneurs are opening the doors to their homes and investment properties to strangers.

Trust Reinvented

There’s a technology in town called Blockchain which has been around since about 2011 and it’s going to change the game in ways we can’t yet even imagine. It’s far from mainstream yet, but it’s moving fast, and it’s going to impact everything from the way we bank, buy music, insurance, movies, house share, literally anything and everything will at somepoint connect into the blockchain network. It’s that big.

To explain what this is more easily, Blockchain is a ledger of records arranged in data batches called blocks that use secure, encrypted validation to link themselves together. Put simply, each ‘block’ references and identifies the previous block, forming an unbroken chain, hence the name.

Put like this, a blockchain just sounds like a list or database with built-in security—which technically it is.

The real power of blockchain however is that the ‘database’ is not stored in one master location or managed by any institution or organisation. Instead, it is said to be distributed, existing on multiple computers, all at the same time in such a way that anybody with an interest can maintain a copy or access it.

Even better the blockchain validation system ensures that nobody can manipulate the records. Rather, old transactions are preserved forever and new transactions are added to the ledger irreversibly. Anyone on the network can check the ledger and see the same transaction history as everyone else.

The other power play behind Blockchain is that the information within it, is accessible day or night, by anyone in the world. What this means for all of us, is we can instantly be verified and validated when we access services from providers.

It will act as a common thread between businesses and consumers, in any country, and of any shape and size.

The limitations of old world currencies, systems, and countries will become obsolete, allowing us to truly transact in realtime, and with trust.

This is now more critical than ever, as more individuals and entrepreneurs are starting up their own businesses, and need to create relationships with customers and partners at the click of a button, and around the globe. We live now in a world where time is more precious than it has ever been, and trust needs to be established in a fraction of an instant.

It’s the next wave of disruption

AirBnb have hired a team of Blockchain experts, so they don’t get disrupted by this new wave themselves. It’s an innovate or be disrupted time for AirBnb, and they’ll be working hard to see how they can deeply embed Blockchain into the DNA of the business, to ensure their more than 17 million users continue to grow with them.

Imagine for a moment, paying for your AirBnb property through a blockchain transaction, and that very instant having access to the property through your smartphone. No third parties involved, no having to wait around for someone to check the payment – it’s quite literally instant. This is just one example, and it’s already a reality being developed by German firm Slock.

Blockchain quite simply is the biggest wave of change to our modern world since the dawn of the internet in the 1960’s

In other industries, theres much talk about blockchain, with the volume getting louder and lounder. The banking community in particular is acknowledging that this technology is going to be the biggest change since the dawn of the internet all those years ago.

If you’ve got your own stories to share, drop me a line at [email protected]

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