There’s no hiding from the blockchain media frenzy, but what does all the hype mean for the coworking market? First and foremost, blockchain-based tools have the ability to enhance coworking operator processes such as membership agreements, procurement and digital visibility through a more secure, more efficient and less costly system. Secondly, there’s a new cohort of coworking operators who are dedicating their spaces specifically to blockchain communities and ecosystems. Thirdly, there are movers and shakers in the market looking to reform shared workspace through the use of digital tokens.
Demystifying Blockchain Potential
The big question: what is blockchain and what systems and tools can it offer coworking operators? Simply put, it’s a super secure distributed ledger system. This means information is recorded in a public system ‘decentralized’ from individual data storage systems. Don’t worry though, just because it’s public doesn’t mean it’s easily accessed. Blockchain is virtually impossible to hack due to the crypto technology which binds blocks of data together and strictly reveals information only to those with permission to access it. Whilst Bitcoin might be blockchain’s most famously valuable application, Ethereum is blockchain’s second most valuable implementation and has the power to reinvent the property sector.
The main benefits of blockchain centre around lease transactions and property management, as is shown by Deloitte’s latest Real Estate paper. Since coworking spaces are one of the most dynamically configurable models in the property market (due to their shortest lease lengths and high number of tenants), coworking operators are arguably one of the strongest contenders in the real estate market for effective blockchain application. Here are some of the ways in which coworking operators could benefit from utilizing it:
Smart Contracts: Most operators issue either paper-based memberships agreements or electronic contracts using software providers. Smart contracts, on the other hand, go further than both mechanisms as they have the ability to automatically execute membership agreements as soon as pre-conditions are met. This means payment of deposits and membership fees are automatically initiated using bank accounts, a payment interface or bitcoin, saving Community Managers and Finance teams an incredible amount of time issuing invoices, chasing payments and managing cashflows. Transactions are automatically and officially recorded and it’s not just membership contracts that can be enhanced through smart contracts; building management processes such as the procurement of cleaning contractors can also benefit.
Smart Identities: Digital identities for individuals, companies and propertiescould reduce time and money spent on due-diligence when operators sign leases with landlords, when operators vet vendors for facilities management and when companies sign membership agreements with operators.
Verified Trust: Information stored on the blockchain could help to verify potential members in terms of their financial track record when it comes to ensuring membership fees get paid.
Improved Discovery: Blockchain allows a transparent property listing system (known as MLS; multiple listing services), where coworking spaces can be listed allowing visibility for companies seeking new space. It might look similar to platforms such as Hubble, which currently list available coworking space, but it would be a public version with fewer costs for the provider or landlord. Details such as location, membership rates and tenant details would be displayed, thus making the search for shared space search much easier and more trustworthy. Rex MLS is the company currently testing this technology.
Real-time Data Analysis: The recording of payments and transactions on the blockchain could improve decision making capability of many coworking providers using appropriate analytic tools. Coworking providers could also have the ability to very easily track the demographics of their members and how they are using their workspace.
Multiple Database Modification: With all information stored in one place, landlords, coworking operators, members and service providers would no longer have to duplicate documentation or store records in different places.
Implementing the above on a world-wide, cross-operator basis is not something coworking providers can execute on their own; adaptation depends on progress made by the property industry as a whole, in addition to government databases, laws and regulations to support and regulate implementation. So how can the coworking industry move forward? Deloitte concludes their paper by suggesting the best steps towards implementation are to educate, facilitate and collaborate, which leads us to the work many providers are doing now to achieve exactly that.