ChangeCoin, the company that brought us ChangeTip, Tipworthy and Tip.me, a mainstay in the community of Bitcoin and social tipping, was acquired by Airbnb, the disruptive home-sharing business worth a reported $10 billion.
What an interesting melding of two seemingly unrelated business models, or is it?
Bitcoin, a decentralized digital currency, has been a rallying cry for new-age businesses worldwide. The un-banked can send money without the high fees associated with bank remittances using Bitcoin with only a computer or a mobile phone.
What many large companies are interested in though is not Bitcoin itself, but the backbone on which it is built; the blockchain.
This is likely where Airbnb is seeing the most potential and kudos to them for being one of the first and largest Silicon Valley successful startups to make a big investment in this idea.
But what else might the future hold for integration of Bitcoin and other blockchain technologies like Ethereum?
We’ve seen a shift of big businesses moving away from favoring the digital currency to wanting to use it’s core technology, the blockchain, for new purposes that simply don’t exist in today’s work yet.
Blockchain technology essentially allows people to create systems where records are immutable based on the design of the system itself. Spinoffs of the blockchain concept have seen some success with technologies like Ethereum offering a decentralized computing system that can serve up trustless smart contracts that execute on their own.
While there’s been a lot of speculation about what potential blockchain technology could have on a variety of industries; mainly finance, insurance and entertainment royalties the fact remains that these industries are largely old, established and risk averse.
Think back to a few years ago when even the biggest banks were making their awkward transition into online and mobile banking. These types of industry players probably won’t be the first big players to act on using blockchain technology.
A few years ago many people couldn’t imagine a business model where people share their homes with others looking to stay for various amounts of time at scale. What we’re seeing here is Airbnb taking a long and hard look at how their already disruptive business model could become even more disruptive.
Changecoin built a great product and ecosystem around the concept of tipping small amounts of Bitcoin and also integrating social media to allow users to give and receive tips easily.
While the concept of integrating social tipping and Bitcoin might be an interesting addition to Airbnb’s functionality of hosts and guests, what the ChangeCoin team might bring to the table of the overall Airbnb product could go much deeper.
The “acu-hire” nature of the deal brings a team with deep knowledge of developing around Bitcoin’s functionality, including that of the blockchain it’s fundamentally built on.
There has been speculation in the past that an application for blockchain technology outside of the traditional industries mentioned above would be for an Airbnb model to have smart contracts between hosts and guests where there could be trustless interactions on both ends.
For example, the host sets up a contract and has a lock on their door associated with a smart-device system that unlocks when a guest pays their deposit and funds into escrow.
This could eliminate the need for human intermediaries almost entirely over time in transactions like this. While making the leap to this sort of technological scenario might be some ways off,
Airbnb has relatively little to lose and a lot to gain by fielding these sorts of ideas within their product development process and trying to get a working model for their customers to experiment with.
This is where the platform agnostic person must step back and see objectively where big businesses such as Airbnb would benefit most from blockchain technology. Granted, the next big decentralized smart contract app or Dapp will probably be built on Ethereum. However as we’ve seen with financial giants with the advent of R3 and the Open Ledger Project, big businesses don’t necessarily want to jump into public blockchains and many want to use their own development power to do the customized building on the blockchain that technologies such as Ethereum may or may not offer yet.
Regardless of what Airbnb wants to do with Changecoin’s core technology or team, if Airbnb has remotely considered building some sort of smart contract system or wants to have customer records immutably stored and processed, they’ve made a big and smart move in the right direction.
For those among us who are excited to see what the next steps will be for cryptocurrencies and blockchain technology, the results of this acquisition will likely be a lot more exciting and transparent compared to the financial institutions who claim to have a stealth mode internal incubator reportedly looking into blockchain solutions. Whereas banks will play the “wait and see game” it’s more likely Airbnb will play the “develop and deploy game” instead.