How Blockchain Is Changing the Way You and I Do Business
Blockchain has the potential to remove the middleman from transactions, saving everyone time, money and headaches.
“It takes away the monopoly of knowledge from a few platforms,” he said in an interview with Skift’s Dave Montali. Jouseen believes that this kind of monopolist intermediary – “the middleman” – will find it increasingly difficult to defend their business case.
Jouseen speaks specifically about the travel industry and where he sees it heading, but the same shift is happening right now in all areas of commerce, and it’s fundamentally the changing the way you and I and everyone else will be doing business. (Want to learn the basics about blockchain? Check out An Introduction to Blockchain Technology.)
By any standards, business has already changed dramatically in the past decade. We just have to look at Uber, which disrupted the taxi industry, or Airbnb, which disrupted traditional hospitality. For many consumers, this was a huge “aha” moment, seemingly putting control back into the hands of the consumer. Yet in reality, this disruption – and it certainly qualifies for that label – only served to put a new intermediary in charge.
In both Uber’s and Airbnb’s cases, the disruption only served to create a new centralized middleman, concentrating power in the hands of a few. In the bargain, the end consumer may have the advantage of lower prices and ease of use, but it still leaves the intermediary in control of the overall transaction.
Why Blockchain Makes Us Think Differently
Now, decentralized marketplaces based on blockchain are disrupting things on a whole new level.
According to Jouseen, “Blockchain will break the almost-‘monopolistic’ hold that Priceline, Expedia, and Airbnb hold in today’s lodging and distribution ecosystem. That may be overstating their grip on distribution, but we get the point,” Montali writes.
How is this possible? Because blockchain – the technical backbone of cryptocurrency – has effectively taken the middleman out of the equation on just about any kind of commercial transaction out there.
Clearly this will impact more than just the travel industry. Last summer I wrote about five industries that will be using blockchain sooner or later:
- Smart grids, where building owners can sell back their excess solar capacity to the grid;
- Money transfers and microfinance, especially those that serve the billions of the world’s unbanked;
- Contractual agreements and real property, often bogged down in heavy paperwork and extensive fees;
- Gaming and entertainment, where players want seamless access across platforms; and
- Government and smart cities, which need a better way to manage their information superstructures. (For more on smart cities, see How Big Data is Helping Build Smart Cities.)
This is all happening in real time, as blockchain technology is being leveraged in all of these industries in ways that not only look good on paper, but make good sense for the end users.
We Are All Ready for Blockchain … Even if We Don’t Know It
Talk about blockchain and cryptocurrency at your average family gathering and you’ll get a lot of glazed eyes and confused looks. I know; I just went through this over the holidays. But talk about the benefits of using a blockchain-based tech, and you’ll see the lightbulbs start to go off.
For example, real estate transactions are burdened with a huge amount of friction, and are controlled by a centralized authority that tacks on fees, commissions and regulations. The idea of selling your own home makes even the smartest people balk, not willing to take the risk of missing a line or messing up a form. But that typical 6 percent selling commission sure is painful.
A similar friction exists in the rental market, keeping renters and landlords tied up in paperwork and excessive fees. In addition to first month, last month and security, renters in urban areas are often looking at broker fees as high as 15 percent.
Now, we can change the conversation about fees and regulation, with blockchain projects coming on as disruptors in this space. Not only is this decentralizing power from the industry middleman (eliminating the massive broker fees in the process), it’s solving a huge challenge in expensive cities by encouraging crowd funding of rental deposits and freeing up some of the $500 billion in assets current held as security deposits.
The Search for Personal Control
Some look at the current state of digital communication as mass control. Yet in reality, consumers are becoming increasingly adept at self-selecting what they see and consume. We actually have more control than ever, as mass market media gives way to micro-niche interests.
We like this shift, and we are looking for the same in the companies we do business with. We look at an industry that is rife with fees and regulations, and ask “Why?” We look at our bank statements and balk at the monthly fees. Increasingly, we want every transaction we make to be more personal, more transparent, and less weighted with fees we view as unnecessary.
This massive change in consumer behavior and expectation may indeed be the reason that blockchain is becoming the preferred solution in so many areas. The days of the intermediary are quickly coming to a close, and consumers are forcing the issue with every choice they make.