Ofo, the Chinese bike-sharing unicorn, has announced to establish a blockchain research institute on May 17th. They want to implement blockchain technology in a global scale to boost and enable the development of big data and IoT and build connections among enterprises, government and users. Ultimately, they want to solve the problem of how to best arrange shared bikes.
As a matter of fact, there are many rumors about ofo going to implement blockchain months ago. Li Xiaolai and Chen Weixing both have commentated that ofo will and have to leverage blockchain to make the future for sharing economy.
So, in the battlefield of shared bikes market, can blockchain bring hope for ofo?
Decentralization – the foundation of a true sharing economy?
Sharing economy, especially the bike-sharing market in China, is a fiery battlefield. Ofo and Mobike managed to survive and became the top players while a majority of other sharing bike startups have failed.
However, this battle has caused a new problem for municipal administration in Chinese cities. Tens of thousands of shared bikes swept the streets overnight and has made the sidewalks unbelievably crowded.
City government can no longer tolerate the unrestricted increase of sharing bikes and have been regulating sharing bikes since late 2017. The introduction of blockchain can in a way help ofo become more compliant.
First, blockchain can solve the trust issues between ofo and users. Leveraging blockchain to record user information and bike usage, ofo can have an accurate and comprehensive user profile out of those information and build a credit system for users. With such a credit system, ofo users can know how they have behaved on using the bikes and get rewarded such as deposit-free and bonus tokens.
Second, the user behavior information and bike usage data recorded on blockchain can be easily shared with bike providers and manufacturers. With those data, manufacturers can deploy their maintenance team more efficiently and no longer need to manually check the bike conditions.
Third, and the most important one is, by introducing blockchain into bike-sharing economy, every individual can be the provider and the consumer-to-consumer, or peer-to-peer model can be truly implemented.
Blockchain reshapes the bike-sharing territory?
As a matter of fact, the key for bike-sharing competition in China has always been money. Low-barrier of bike industry has made it easy for startups to tap into bike-sharing. But it’s not a business where you can generate positive revenues in a few months, you have to burn your budget to get more and more users. And the more users you have, more likely you will get fund from VCs to keep this going.
This somehow crated a vicious circle that bike-sharing is no longer a public service for citizens, but a money play in order to gain the favor of venture capitals.
By leveraging blockchain, ofo might have a chance to create a technology barrier for themselves. If they created a more efficient and friendly bike sharing system through blockchain, they could really have a chance to dominate this market.
Blockchain attempt on bike sharing
Ofo actually has implemented blockchain-based features on its overseas market earlier this year. They have co-launched an action called “RIDE AND EARN” with GSELab in Singapore and one of its features is mining through riding. Users can get GSE tokens by riding and good behaviors. The GSE token they acquire can be used to either purchase for ofo services or exchange for other Cryptocurrencies. Ofo wanted this model to encourage users to exercise more and choose more economic transportations.
oBike, one of the biggest bike sharing providers in Singapore has partnered with TRON last Decemeber to offer its own crypto tokens – oCoins. Users can also gain oCoins through riding.
Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.
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