Will the blockchain allow to create trust without having to build a brand first?
Photo: jbosari / Flickr
The sharing economy is often described as “peer-to-peer”: you have a car and I need a ride, you have a spare room and I need a place to stay… a way of sharing assets directly between individuals. In practice, however, all this sharing happens through marketplaces. Of course, you could argue that marketplaces are needed because they are the place where supply meets demand, where prices can be set and compared, and that people need a single, organized, place to go, very much like Yahoo and then Google structured or allowed to search the content chaos that was the early internet.
But the real reason for the marketplaces to exist is trust. The level of trust that needs to exist to step into a stranger’s car or to invite someone you don’t know into your house is higher than the level required to order goods online and have it shipped to your home by a trusted transporter (the usual eCommerce use case popularized by Amazon).
Therefore, companies in the sharing economy space, like Uber or AirBnB, had to build that trust. And to build that trust, they had to invest a lot of money into marketing (anywhere between $250M and $300M yearly, according to this information)
Getting traction through network effect is critical for plaforms, but the cycle of “get more users to get more revenue” is actually contradicted by the cost to build the brand, hence the fact that most sharing economy platforms today lose money.
There has been much speculation if blockchain solutions, that are naturally decentralized and don’t require a central third party would be able to provide the same sense of trust than platforms from recognized brands.
What we propose with XFAIR is to enable this trust, not by building a brand, but by aligning the interests of all stakeholders:
- Owners benefit quickly from a new type of network effect, a sustainable network effect that drives success and adoption of the platform because of quality and added value, not because of smart (but costly) marketing.
- Contributors are providing services not just for financial gain, they have the possibility to share the success of the platform, and hence tend to provide great service and go the extra mile to drive the platform’s value.
- Customers are benefiting from the innovation of the distributed rating mechanism based on -and verified by- consensus. They know that the quality of the reviews can be trusted (which is a real issue in today’s platforms). Also, every effort is compensated on XFair platforms, including leaving reviews and rating services, so customers are also contributors and can be paid for reviewing (and remember consensus vetting prevents trolls from leaving biased feedback or abusing the system)
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