I wrote this article July 1, 2017 to be featured in Parking Magazine, but since it may not come out until the middle of next year (if at all) I figured I’d share it online as cryptocurrency market caps are rising to new heights. If you don’t know what the hell the blockchain is, or how it could help your industry, this might help. If you are technical and have been geeking out for months or years on the blockchain, maybe skip down to the bottom to chat philosophically. The parking industry (rightfully so) is one that is a slow adopter to new technology, so the blockchain’s impact on your industry should relate.
All of the recent hype on cryptocurrencies like Bitcoin could be leaving you with a big question mark over you head. Don’t be distraught, as many feel like this. Just like the internet or smartphones, the technology is coming, and it will support a lot of changes in the parking industry.
Some of the changes we can see in our industry have the potential of being built today.. As an owner or operator you can now accept payments without paying a credit card transaction fee, which could save your business hundreds to millions of dollars. As a parking owner or operator you can create a decentralized app which would allow you to cut out third parties to sell and manage your parking, giving you a direct relationship with your customer. Lastly this new technology could be a means to raise new funds for your organization.
This article is for informational purposes only and should not be taken as legal, financial or investment advice. Please talk to an expert before making any investment decisions.
In the past couple of months Bitcoin and Ethereum, two popular blockchain cryptocurrencies, have reached record numbers in price and market cap. At the time of this writing one Bitcoin is now worth $2,458.29 and one ether on the Ethereum blockchain is worth $277.48. They have market caps of $41B and $27B. If you would have purchased $1,000 worth of bitcoin on January 1, 2017, it would now be worth $2,458.29. If you would have purchased $1,000 of ether on January 1, 2017 that would now be worth $33,674.75.
So, what is a cryptocurrency?
A cryptocurrency is digital currency in which cryptography and a peer-to-peer network are used as an added measure of security. It is operated without any central issuer, bank or authority.
Some coders and lucky investors are getting excited about their recent fortunes, but it seems the actual technology behind Bitcoin and Ethereum, the blockchain, is what’s truly moving these prices up and getting technology enthusiast excited. In this post, we’ll go through some basics of what Bitcoin and Ethereum are, and how (if at all), they may impact your parking business. And if you really want to geek out, how you can possibly build a project on top of the blockchain.
Bitcoin was the first cryptocurrency made on the blockchain with the idea of using the blockchains decentralized structure and ledger to create a new type of standard for the internet. It was made by one person or numerous people under the alias name Satoshi Nakamoto and it allowed customers to actually transact online in a decentralized and anonymous way, which quickly took off.
Ethereum was proposed in late 2013 by a cyrptocurrency enthusiast, Vitalik Buterin. It is different than Bitcoin because rather than just being able to make transactions on it, you can actually add smart contracts that are Turing-complete and can have any amount of code built on top of them. This means that software engineers and developers can build anything humanly possible on Ethereum’s blockchain.
So, what is the blockchain?
The blockchain is a decentralized group of blocks that is continuously growing. The blockchain is an open distributed ledger. Any transaction or block that is added to the blockchain must be validated by a peer-to-peer network, timestamped, and is nearly impossible to ever alter. Once added to the blockchain that record is always public like a fly in amber.
To explain a little difference between Bitcoin’s blockchain, and Ethereum’s blockchain, let’s use some examples. With Bitcoin, you can simply make a secure bitcoin payment. If you go to the Farmer’s Market and want to pick up freshly squeezed juice but the Vendor only takes cash or bitcoin. You can scan the vendors QR code and get their unique bitcoin key to send them bitcoin through an app like Coinbase, or through an online wallet.
With Ethereum, since it’s Turing-complete, you can add any code to the transaction too. So, for an example with Ethereum let’s make a bet between you and a friend. You want to bet on who will win the Stanley cup. You friend is taking the Predators and you’re taking the Penguins. You can write code into a smart contract that waits until a certain date, verifies the winner of the game from a third party site, and distributes the funds to the winner.
It is still the early days of applications and new types of smart contracts being used on the blockchains, but the possibilities are many.
I interviewed the CEO and Co-founder of CoinFund, an open research community for blockchain technology research, who will help us take a look into the future with possible applications to the Parking Industry.
Murray- How would you explain cryptocurrencies?
Brukham- Cryptocurrencies are a form of digital currency — fungible and transferable units of value — which are implemented on a worldwide peer-to-peer network and have no central issuer, authority, controlling entity, or parent company or owner.
Murray- Why were cyptocurrencies created?
Brukham- Technologies tend to be implicitly political. Satoshi Nakamoto created Bitcoin, which subsequently became the first successful cryptocurrency, partially as a technological breakthrough and partially for what seems to be a quasi-political reaction to the state of fiat currencies in our world today.
Murray- How would you explain blockchains?
Brukhman- Blockchains are the technologies which underpin decentralized (peer-to-peer) networks of value. They are essentially peer-to-peer globally accessible distributed databases which allow for the creation of a wide variety of scarce digital assets.
Murray- Why would a parking company benefit from accepting cryptocurrencies online?
Brukhman- Today, the main value proposition of accepting cryptocurrencies is lower costs to transact versus credit cards or banks. However, as the consumer adoption of cryptocurrencies grow, I think merchants and businesses of all types will find it expedient to accept cryptocurrencies as an alternative and more efficient form of payment in general.
Murray- Why would a parking company benefit by building an app on the blockchain?
Brukham- It’s not clear that they necessarily would. However, blockchains allow for interesting constructs of corporate fundraising and governance. One can imagine in the future a parking company funded and governed by its customers, for example. There also may be use cases today for keeping track of parking spots and ticketing on a transparent database such as a blockchain.
Murray- How could the parking industry utilize new blockchain technologies and cryptocurrencies that are coming out?
Brukhman- At a high level: for fundraising, governance, community ownership, and more efficient transacting.
So, What does this mean for Parking?
At Top Airport Parking we’ve tried to utilize this technology as much as we can. We currently accept over 50 cryptocurrencies through our website and distribute cash to our partners. All of the payments we receive with these cryptocurrencies have negligible fees compared to our current credit card processing companies. Other use cases that could be created right now would be building a decentralized parking app on Ethereum. A decentralized parking app would connect people looking to park directly with the parking facility. Through the smart contract a parker could park their vehicle and the money goes directly to the facility. A last use case would be to raise funds. The final use case would be a parking company that owns its assets conducting an initial coin offering (ICO). Similarly to a Kickstarter program, all funds would be raised in advance and can be used to build a system on the blockchain. Once the product is built, these tokens could then be used in return for parking their vehicles in spaces, with the safety of being built on the blockchain. More simply put, a company could raise millions of dollars in an ICO and use that money to build out a new product, and to pre-sale parking for future use.
The more we all start having conversations on what to build on the blockchain, the more we’ll see this amazing technology push its limits. What are some ways you think the parking industry or your industry could build on the blockchain?