In the pre-mobile world, in the time before the Uberization of every conceivable service, the gig economy existed — just not in the highly organized and monetized fashion as it is today.
In fact, Head Blockchain Engineer Stan James at decentralized blockchain marketplace provider Origin told PYMNTS in a recent conversation that the central locus of the pre-digital gig economy was the community bulletin board. Generally made of cork and full of 3×5 cards or homemade printouts, it was housed in libraries, diners, YMCA’s and coffee shops nationwide — wherever one headed when they had a service to list or needed to book a service.
In the mobile era, there are, of course, many such “bulletin boards” gone digital, and they are super specialized. There are boards for drivers, homeowners, nannies, babysitters, dog sitters, dog walkers, therapists, doctors, massage therapists, hair stylists, yoga coaches — the list goes on and on. If one has a digital 3×5 card to hang, and they are in a major metro area, odds are good that there is an “Uber of” digital bulletin board to hang it on.
However, James noted, those modern sharing marketplaces — the digital bulletin boards — of today, are quite different from their analog forebears in a critical way: They are costly to use.
“It is very much as if the bulletin and the one restaurant in my parents’ mountain town said that ‘if anyone purchased anything as a result of seeing it on our bulletin board, we are taking a 30 percent cut of that transaction — or because it is our bulletin board, we are going to charge you anytime you put something on there,’” he said.
That’s good for the third-party marketplaces that get to collect those 20 percent to 30 percent transaction fees, James noted, but not as good for the drivers, hosts or other service providers that are essentially paying them. Origin, he explained, is an attempt to take that middleman marketplace out of the equation by building a decentralized marketplace protocol on the Ethereum mainnet. Instead of a central business to facilitate the connection and transaction between users and vendors, Origin seeks to use blockchain-generated smart contracts.
“We think one of the really useful things someone might want to put on the public ledger is gig-like services,” he said. “The amazing thing about the blockchain is that it is now possible to have a virtual bulletin board that no one owns, no one controls and [where] no one can take a cut off the top.”
How It Works
Currently in mainnet beta, Origin’s basic offering functions like a blockchain-powered Craigslist. Users who have goods or services to offer — or who are looking for one — can create a profile and connect their Ethereum wallet to the account. Once on the platform, potential buyers can browse listings and arrange via messaging transactions through smart contracts.
Today, transactions are paid in Ethereum. However, in the future, James said, the goal is to make transactions payable with any Ethereum-compatible coin, including the customer token that Origin is developing. The bigger goal for the Origin protocol will be to allow developers, with a minimum level of familiarity with the blockchain, to quickly build their own sub-marketplaces for specific services like dog walking, house cleaning, ridesharing and more.
“We are open source,” he said. “Anyone can read our code and watch how we develop it. And we hope that people use us in much the way they use a service like WordPress — they can deploy our code and spin a marketplace up. Our job is to make it really, really easy for them to do that. We want it to be [so] that a developer [who] doesn’t really know anything about the blockchain can decide they want to use Origin and write a few lines of code, and — voila! — they are able to build out their marketplace.”
Why Use The Service
The average Uber driver, dog walker or hairdresser probably isn’t a casual blockchain enthusiast, which begs the question: Why work with a high-touch product like Origin when they can just sign on with a platform service that requires little other than making a profile and downloading an app?
Part of it, James said, is simple cost. If one is working on an app that takes 20 percent of their earnings, and they find there is another service that works just as well in booking rides, but doesn’t take the cut, they are “likely to become a big fan of that alternative.” However, he noted, a service like Origin also allows for marketplaces to be built where the big players like Uber and Airbnb aren’t interested, or to build for market segments that definitely exist, but are more niche.
“There are good ideas that aren’t going to be a billion-dollar unicorn business, but if someone could spin up using Origin, we might be able to see some new marketplaces emerging that would not have been possible. And we think that will draw users because the only game in town has a lot going for it,” he said.
The Challenges And What’s Next
Today, Origin is in beta, and James noted that the company has a lot to do through the rest of this year and into 2019 as it tries to build the best open-access software it can. That means critically improving the buyer interface because, right now, transacting on Origin is “still quite a bit harder than the just-pull-out-your-card-and-pay method” that customers are used to on other sites.
Overcoming that friction, he added, will be significant work.
There is also the challenge of making both vendors and shoppers on the marketplace comfortable enough to trust each other through transactions. One benefit of mediated platforms is that when transactions go wrong in one of the many ways they can, there is a central authority to appeal to so as to straighten the issue out. Decentralized marketplaces, very definitively, do not offer that in the same way a centralized platform can.
There is a lot of work and research involved in building things, like arbitration and dispute resolution, directly into the blockchain transactions themselves, but James did admit that, at this phase, the capacity is not “baked [into]” the technology itself. Instead, Origin serves as the external arbitrator in disputes — and, in the case of things like escrow, that is handled directly on the blockchain itself with funds held in the smart contracts until the transaction is complete.
It is much work to do, and some of it could take years to perfect, according to James. Yet, Origin has amassed a sizable war chest through investor funds to take on the challenge. The firm has raised $3 million in Seed token sale funding from Pantera Capital and another $6.6 million through a CoinList token sale. Plus, it raised another $26.4 million in traditional venture funding from Pantera Capital, Foundation Capital, and a series of entrepreneurs and business investors, including Garry Tan, Alexis Ohanian, Gil Penchina, Kamal Ravikant, Steve Jang and Randall Kaplan.
Of course, James said, much of the success on Origin’s platform and protocol will not only be based on its own efforts, but on what others can use their technology to build.
He concluded, “Of course, our main goal is getting partners building on us, and we can’t wait to see what customers can come up with using our code.”