Imagine if instead of paying for a car in full yourself and leaving it parked for more than 80% of the day you can buy a car by paying only a part of it and sharing it with your friends, peers or neighbours. In such a scenario, one would be able to own a car at a much cheaper cost than he can today.
This is one of the examples of shared economy. Shared economy is the future and we have started seeing this in real. People rent out rooms in their homes to strangers to earn some extra bucks and for travellers, they get a chance to see and interact with the local culture and that too at a more economical price. The concept of the shared economy is going to spread across the breadth and length of our lives but for that what we require is a more robust, secure, transparent system that can act as an enabler to make this a reality.
Blockchain and IoT systems are the solution that can provide the required decentralized and peer-to-peer platform that we have been looking for all these years. These systems will allow communities to have a transparent and equitable framework which will be much more energy and resource efficient as their resources will be utilized in a more optimal way. Instead of burdening a single individual, the cost will be equitably shared and so will be the value. Idle time will be reduced and fewer resources will be spent to meet the ever-growing needs of the human race.
Further, the implementation of smart contracts will ensure that the devices are getting used by individuals in the intended and the accepted way as pre decided in the smart contract. Machines connected through IOT and managed with smart contracts and blockchain are predicted to rule the future of the shared economy. This holds true especially for high ticket assets as businesses would be able to get the maximum value for their investments on these assets. Introduction of such a platform will offer the dual benefits: Number one convenient fractional ownership and second a sharing marketplace which will lead to a reduced ownership cost and maximized utilisation.
Let us examine it through some real-life examples for a better and clear understanding: Let us take the example of farm machinery which is very expensive and Farmers are required to pay a large sum of money upfront to buy the machinery. But as the machinery remains idle for a significant time of the year it leads to a decrease in the profit margins of the farmer. A farmer needs to buy a tractor for his fields but he doesn’t want to bear the full cost of the equipment.
Therefore he approaches 3 of his fellow farmers and they together decide to share the ownership of the tractor and use it cooperatively. With the help of Blockchain and leveraging IoT device sensors installed on the tractor, they will be able to view the real-time location, usage and performance of the machinery which was not possible before. With the help of this real-time data, they will be able to better judge the share of maintenance cost, based on usage of the machinery by each individual. Thus bringing trust and transparency in the system. This platform can even be used for renting out the tractor on a marketplace.
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With the help of smart contracts, the terms of accepted and intended use of the equipment can be predefined and when someone hires the tractor or any other other machinery from this platform the smart contract will be signed by the lender and borrower and will be recorded on the blockchain.
A smart lock functionality can also be provided with the help of these smart contracts that can lock or unlock the tractor based on the payment status. This would make renting of the high-value equipment and machinery much easier without the intervention of the owner.
Further, this renting or sharing can even be applied to other scenarios as well. For instance, machine to machine sharing can be done using the blockchain and smart contracts. For example, one device can temporarily rent out its disk space to other devices. As blockchain enables micropayments, borrower device would pay the owner device for the fraction of the disk space used. In simple words, every device will have its own account on the internet, and it can get compensated through these micropayments for lending its resources to other devices whenever required.
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