Airbnb is exploiting its users, but decentralized alternatives are possible

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Anyone who uses Airbnb knows that the company is resting as the first driver in the home sharing economy 1.0, but its dominance lies in exploiting the hosts and guests who actually share and create value. The guests pay too much and the hosts pay too little. The resulting situation is similar to feudalism, making hosts like serfs who rent their homes, clean things up, treat guests and do the actual work. However, the value derived from Airbnb’s peer-to-peer exchange goes directly to shareholders, who are many steps away from the action on the ground. It is nothing short of unfair.

There is a very simple reason why this is the case. Internet sharing economies like Airbnb and Uber are forced into what is called an extractive imperative. In the early days of these platforms, they were aligned with their users on both sides of the market, and treated both as partners to start networking efforts – similar to offering early grants to get people on the platform. The peer-to-peer element of the common economy was put front-and-center in brand marketing, and it seemed that a populist takeover of the travel industry was on the rise.

Related: Destination blockchain: Shake up travel industry and reduce costs

Share economy via web 2.0

It didn’t take long for us to realize that this vision of the sharing economy was a lie. Web 2.0 companies are driven by a model of growth-cost public, then they become forced to shareholders who demand a profit from that growth. To satisfy this model, these companies are forced to extract as much profit as they can from the users who are dealing with their market, in order to reassure shareholders and other stakeholders who are in fact not the users themselves.

Selling a myth of empowerment and conversation sharing, platforms like Airbnb are now at odds with their users because they need to take what they can from them to maximize profits and ensure their self-survival. Airbnb, for example, has gone from being well aligned to completely misaligned, and this has created a ripple effect across the entire market.

A prime example of a mismatch in the domestic division economy is the resources undertaken by Airbnb in the aftermath of the global pandemic COVID-19 and its detrimental effects on global travel. On the one hand, Airbnb has changed cancellation and refund policies in favor of guests to retain as many customers as possible, while placing the burden of disinfection resources and last-minute cancellations on hosts. This was a measure entirely guided by profit-and-loss margins that prioritized the needs of guests rather than of hosts, because ultimately the guests are the users who cause revenue. The hosts, however, who provide the possessions that cause the income, have lost, and as a result distrust has arisen.

Related: How has the COVID-19 pandemic affected the crypto space? Experts respond

Worse, most Web 2.0 sharing economies like Airbnb don’t work on solid foundations. Their numbers are extremely bloated, and their business models remain unproven. They had to raise countless funds to continue to grow, but in turn decrease the value they give to their community of users. While officials are tightening control and profit extraction, a tipping point is imminent.

Decentralization is the key

Users are well aware that they are being exploited – they just need a viable alternative. So how do we solve for the extract imperative, managers who take away the value of the value creators and in the hands of wealthy shareholders, and the lack of trust and agency that both hosts and guests endure when interacting with platforms like Airbnb? The answer is a decentralized marketplace provided and controlled by its users that acts as a device instead of an extracting cartel with unicorn dreams.

Home sharing is the ideal venue for a decentralized marketplace, as travel is one of the largest industries in the world, and anyone with a home or travel itinerary can participate. The underlying technology and infrastructure of blockchain is now scalable enough to accommodate the needs of such a market. And during the COVID-19 pandemic presented failures to the travel industry, we are already seeing a return of significant demand that will grow only in line with trends like remote work, digital nomadism and alternative housing.

Related: Remote work is not enough: Switching to a decentralized system architecture

If Airbnb is a feudal state, decentralized home-sharing markets are a common democratic economy in which those who create value retain value. They can create a better alignment between guests, hosts and the marketplace within which they deal. And the people who actually use the platform are the ones who make the decisions directly embedded in the valuable capture mechanisms of the platform.

Built on a blockchain infrastructure with proven models for a peer-to-peer marketplace with powerful built-in tokenomics, the decentralized alternative for the travel industry is here. And it means home sharing 2.0, travel booking for website 3.0, and an end to the exploitation of hosts and guests around the world.

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Luke Kim, originally from Tokyo and Seoul, is a co-founder of Berkeley Blockchain Xcelerator, a co-inventor of two blockchain public financial models in partnership with a U.S. mayor’s office, and a technology marketer. He builds the future of the domestic division economy as a genesis group of Dtravel.