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Will Blockchain Set Us All Free?

Will Blockchain Set Us All Free?
Image credit: Courtesy of Stankevicius MGM
By Stankevicius MGM

No.

Though blockchain is a technological breakthrough that offers us low transaction costs and transparency, it is still just a tool that has to be used properly. Even the best 16mm wrench in the world won’t help you with a 12mm nut.

That is why crypto community has to implement blockchain technology where it is really needed. We need to find those “rusty 16mm nuts” – find obsolete mechanisms in the spheres of life where transparency, low transaction fees and public ledgers are needed the most.

Economy has a lot of such mechanisms. Though maybe we should not consider current clumsy and sluggish economic orders, and try to merge blockchain with peer-to-peer economy instead?

The traditional B2C economy is extremely difficult to tokenize. There, standard deals imply long transaction chains and to make the whole system work every link in these chains must switch to blockchain. If you try to make multiple companies sharing the same business processes switch simultaneously, it will take considerable resources and entail tremendous expenses arising from, among other things, downtime for the interim period while the companies are adopting the new model. From another perspective, even if some of the chain’s participants adopt blockchain, to successfully continue with common business processes the issue of converting fiat into crypto must be tackled, otherwise, again, both time and financial expenditure ensues, decreasing the incentive to adopt blockchain.

On another note, business processes in the shared economy imply minimum intermediaries, often times resulting in the buyer and seller being the only actors in any given deal. This allows to not only make the switch from fiat to crypto, but in the long run eliminates the need for conversion entirely: with the increase of supplier and consumer numbers within the P2P blockchain community we will see all the advantages of cryptocurrencies -- this time in practice rather than in theory.

The trendiness of both terms in the recent years may serve as additional stimulus for implementing blockchain in the shared economy. You may have heard plenty about blockchain already, so let’s rather take a look at the sharing economy for a moment.

Peer-to-peer economy came into being thanks to the changes in our value system. Just a few decades ago, most of the developed countries saw success as having a vacation house, a car and a yacht. But now people start to value freedom more. Instead of stability, people want to be mobile while maintaining high living standards. In many cases it is much more convenient and cheap to use carsharing services than buying a car.

P2P economy seems to be an idea to change the world as we know it. But it also seems to keep the shortcomings of its predecessor: high transaction fees, monopolies and even higher vulnerability to fraud.

That is why WONO project team is working on the most topical idea of today – merging blockchain with P2P economy.

WONO is a decentralized project designed to unite people worldwide in a P2P economy. Blockchain will help us create a transparent system for transactions, ratings and comments while minimizing risks. Both parties of every deal are protected by smart contracts and a unique crowd insurance mechanism. The system allows community members to step in as a guarantor, voting with their tokens for a deal to succeed. If the deal goes through, the guarantor receives a bonus taken from the insurance part of the commission fee. Otherwise the guarantors’ bets are allocated towards covering the losses of the adversely affected party.

On top of the convenience of being able to act as a supplier, buyer or guarantor, WONO community members enjoy a significant advantage over fiat users of sharing services -- low commission fees, brought about by the decrease of business expenses due to the decentralization.

In WONO, transaction fees will not exceed 5%. For example Airbnb, a peer-to-peer economy giant, charge from 12% to 23% for their service.

There is little doubt the new technology is successful due to the positive feedback from its users. However, for the new technology to continue moving forward the existing sharing economy characteristics must be improved and commission fees must go down. Strengthened security will come in handy as well, especially considering this issue will only get more and more relevant with the growth of the P2P community and in turn, the market capitalization of the entire sector.

The WONO platform is designed to combine the aforementioned elements and, perhaps, let cryptocurrency unlock its full potential as something more than just a speculative asset.

MVP is scheduled to roll out in October. Stay tuned for updates!

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