As the popularity of bitcoin is registering a significant popularity and many people have actively started using this new age currency we can say the Bitcoin has the massive potential to bring radical change in the currency market and economy.
There are a number of ways in which Bitcoin is being used by the businesses as well as the individuals. Some use it to buy online items while the others use the currency for booking hotels or paying for services. Many investors also trade Bitcoins in the market just like stock trading. Another growing trend of the internet is sharing economy. In simple terms, the sharing economy is the system where the private individuals share the services or products via the internet and a specific fee may also be involved for the same. One thing that is common between bitcoins and the shared economy is that both of them are based on peer to peer technology.
So, it would be interesting to know that if and how will the BitCoin affect the sharing economy and what developments we can expect when Bitcoin becomes an essential part of the sharing economy:
It can allow Peer to peer economy to meet its ”Real” objectives.
Multiple marketplaces constitute the part of the service ecosystem that is based on or influenced by digital capabilities/technologies like Airbnb, Uber, and Instacart.In this type of sharing ecosystem the peer to peer network plays the pivotal role and as Blockchain technology- the driving technology behind bitcoin, is essentially based on peer to peer technology, it is very likely that Bitcoin can affect the sharing economy and bring about some radical changes in the way it works.
Present Limitations Of Peer To Peer Economy:
- While the peer to peer model is the central idea behind the sharing economy platforms of the present era, it still requires a central authority for regularizing the operations and the major portion of rewards are exclusively harvested by this central authority that is essentially against the underlying values of peer to peer economy.
- Paypal, for example, earns a good amount as a fee for facilitating the payment among different individuals or entities and the most important thing is that the fees have to be borne by the individuals or entities involved.
- Besides the exchange rate offered by the Paypal is lesser than the market. Both these aspects reinforce the fact that peer to peer economy is still far from its real objectives.
How Can Bitcoin Help Eliminate These Limitations?
Due to its very mechanism that essentially rules out the role of any central authority to control the transactions or process, the Blockchain technology can effectively make the things more efficient, cost-effective and transparent. Besides, the extended independence will be enjoyed by all the stakeholders in the process.
Easy, Better Yet Transparent Way Of Transactions:
- The online payments and buyer/transaction protection are other two essentials advantages offered by the Bitcoin blockchain technology when we talk in the context of peer to peer economy.
- The online payments will not only be efficient and align with the better security standards but the person will also not be required to reveal the crucial details like bank info, credit card details etc.
- They can easily use the Blockchain powered Bitcoin currency that promotes transparency and doesn’t need to be hidden from the public, unlike bank details or credit card info. More importantly, they serve the same purpose as far as the transactions are concerned.
It is not shackled by geographical or political constraints.
Being the common currency the Bitcoin will also eliminate the political, geographical, and economic boundaries that prevent the easy transaction across different countries and economies. It will help save the best interests of the peer to peer economy.
The Challenge: Bitcoin Has To Work With (And Not Against) The Traditional Model:
However, when we talk about the revolutionary changes that the bitcoin can bring we are actually talking about enhancing the overall functionality of bitcoin by strategically combining it with the traditional systems instead of building a competitive network. However, the major concern here is to logically design the ecosystem where both the traditional systems and new age digital currency bitcoin can perfectly align without any clashes.