In a previous article I introduced the idea of dark retailing and the consequent dystopia that will be a direct consequence of blockchain technology. The same technology will also enable new business models.
By new, I mean old, but different.
Facebook is the way we now share stories around the campfire. Tinder is how we go to the pub to meet girls or boys. In retail, the business model that will make a comeback is bartering.
Of course bartering exists already, and I am familiar with Bartercard. But bartering predates the existence of currency, and it is the natural way humans (want to) trade.
Human beings want to transact with other human beings and exchange things of value. Currency was introduced to accommodate specialisation of labour. I will farm chickens and you will milk cows and someone else will erect fences.
The problem with specialisation of labour is that not everybody gets to do what they really want to do, and we end having to take a job simply to earn the currency that will enable them to participate in an economy that allows them to live.
Only so many chicken farmers in a community, right?
But what if I could do what I really wanted and that there was an unlimited number of people who wanted what I have? Blockchain now makes it possible for me to swap the eggs from my chicken farm for almost any other thing.
It is not practically possible to barter for absolutely everything because we don’t live as simply as we once did. But bartering on a more limited scale is not only possible, it is happening right now.
This format of retail transactions is set to explode because there are four shifts that are converging, creating the right environment for effective bartering.
- The technology is now available to help determine the value of an item offered for barter quickly and accurately. (The challenge with bartering has always been that, in many categories, it is hard to determine the value of the goods to be bartered. Especially services, but also things like art and the like.)
- Ebay has been the pioneer in proving to people that a system of trading can be built that relies on mutual trust and reputation management, and we are now conditioned to accept that strangers can safely trade with each other.
- The logistical infrastructure is widely available to transport almost any kind of product across the world (thanks to e-commerce) and the technological infrastructure and technology is available to deliver services in virtual environments that was previously subjected to geographic limitations.
- The technology to manage (track, record and control) large scale, complex hybrid transactions over long periods involving multiple parties is available (blockchain). That is, if I want to get my photocopier serviced, I may need to supply eggs to two employees, a servo who supplies fuel to the company and three days of electricity. I could supply those eggs to multiple third parties to get the (credits for a) service I require from another party, but if my obligations and my performance is 100% traceable it is easily done.
If I could get a haircut in exchange for a dozen eggs, why wouldn’t I do it? No tax, no drama, and we both get what we want. And not only do I get the haircut and the barber gets the eggs, we also both get to do what we really love doing.
Bartering will be a much bigger thing in the future – maybe even the next big thing.