Now that we’ve touched on potential use in general, it might be helpful to go one step further with a specific example. Riggs Eckelberry recently wrote an article for Forbes.com that offers an easy way for most of us to understand how industries can be disrupted by this emerging technology. That article uses Uber in an excellent explanation which is paraphrased below, but you can read the full article here.
Uber Business Model
Uber blew up the taxi industry using a phone app and smart data systems to dispatch available drivers to ready passengers. Their business model allowed anyone possessing the necessary qualifications to become a driver, and anyone using their app to become a passenger. Huge success for Uber now worth about $72 billion, and passengers, not so much for Uber drivers who make little despite providing the most critical piece of the business model – the car and their time. Granted, Uber is providing the connection with passengers, but let’s face it – without drivers who own cars, there would be no Uber.
Crypto-Uber Business Model
Imagine the same model using a cryptocurrency called RIDE, which is by nature smart and secure that cannot be copied. To become a provider, same as Uber a potential driver must access DApps (distributed decentralized applications) to verify insurance coverage, prove a valid drivers license, provide bonding proof, undergo a background check, and provide vehicle data. The DApps would be provided by certified vendors and validations performed by expert third parties. Drivers would be designated as “available” on the network automatically once all qualifications were met. No human intervention required and drivers verified instantly vs. one to two weeks.
Passengers only need a RIDE coin wallet app. When opened, the app would ping every available driver within a certain radius. All drivers would have the ability to bid on the job. The rider selects a driver based on price, rating, available time, etc., and a smart contract is instantly created to tie the two together. The fare is held in escrow until the destination is reached, at which time the driver is paid and both parties rate their experience with each other.
There is no middleman involved to take a piece of the profit. The passenger pays for the ride directly to the driver with RIDE coins. The issuer of the RIDE coins would provide the infrastructure and security and receive micropayments on each transaction.
Uber and similar organizations that are gatekeepers facilitating interaction between providers and consumers are prime candidates for disruption. Just as Internet giants Prodigy and AOL lost their grip when the Web opened simple access without the need for gatekeeping, we could see the same with blockchain and DLT technology if some current giants fail to adapt business models. Forbes.com recently identified 10 of the most likely industries to be disrupted.
- Banking/Financial Services
- Real Estate
- Rentals/Ride Sharing
- Charities and Aid Organizations
Other sources add publishing, music, supply chain management, cloud computing, insurance, messaging, identity management, digital advertising, credit-based services, trading, energy, job marketplaces, fishing, hedge funds, and human resources or recruitment industries to the list.
The point is, change is afoot and once a technology is discovered it cannot be “undiscovered”. While the technology is in the early stages, many are contemplating how it bodes similar to the effects smartphone applications have had on various industries. It did take a while for apps to catch on, but once developers realized the potential it just became a matter of programming and launching. The door was opened for individual developers to achieve what previously required large corporate development teams and resources.
There are sure to be hurdles to clear before anyone knows where this will all lead. Perhaps the disruptive power of blockchain and distributed ledger technology will open more doors for those without the advantage of endless resources to compete, and promote a higher level of democracy.