June 6, 2017    5 minute read

Coworking Spaces: How Office Rental Evolves into a Community-Centred Financial Ecosystem

Real Estate    June 6, 2017    5 minute read

Coworking Spaces: How Office Rental Evolves into a Community-Centred Financial Ecosystem

Working out of a noisy venue might seem unusual, but there are many people that are increasingly working as independent contractors, freelancers and need an office.

Coworking also opens up the possibility of the digitalisation of the real estate sector, something that is sorely needed given the complexities of buying and renting commercial property in various parts of the world.

New Technologies Change the Logic of Office Rental 

The property market as it is today is a system that has unnecessary complexities built in to safeguard buyers and sellers, but these complexities now extort a heavy toll in both time and money. Registration of titles, negotiating homeowner’s insurance policies, paying lawyers and the long waiting times are all issues that affect renters and property investors. 

Multiple middle-men and agencies compound the problem of delay and create the need to pay more for renting or buying. Property registries are also mostly manual, and mistakes are made while registering deeds. Disputes can and often do arise leading to additional cost and time wastage in the legal proceedings that invariably follow. 

Anything that can be done using paper can be done using a mobile phone, that is a law that now seems to be universally true, but there is a new emerging maxim, anything that can be done using a complex framework of lawyers, agents, escrow accounts and registries can be executed with a blockchain. Blockchain is an interesting technology; it is the same tech that makes the digital currency Bitcoin work. 

A blockchain is a distributed ledger which can be verified by peers. Some blockchains can execute ‘smart contracts’, and it is possible to create digital land registries that assign a unique identifier to each property and use the blockchain to identify property, owners and sellers. 

These registries can also utilise virtual currency tokens to execute the deals among buyers and sellers and to fulfil the need for escrow services etc. The extension of this technology to other areas of the real estate market is the next step. Shared offices are not always in use and while not being used others can utilise them and owners can squeeze out more value.

There is also a possibility that users may not need access to their shared office after they change jobs or move to another career and if they have a lifetime access to a shared office, then they may need to sell their shared office rights.

Distributed Workspace with a Community-Based Financial Ecosystem 

Working with blockchain to create land registries that are digitalised is already underway in many parts of the world, but now there is also a new digital currency that will exist solely for coworking spaces.

Distributed workspace for tech community called Primalbase is set to launch a digital currency in an Initial Coin Offer (ICO) of Primalbase Token (PBT). Primalbase has a shared working space at the Primalbase Werf in Amsterdam at the ready and plans to open more in Berlin, London, New York and Singapore by June 2018.

This token is built on the Waves platform and is compatible and interoperable with the Ethereum platform. Holders of this virtual currency can thus rent and sell their coworking spaces using just a mobile application.

This is certainly an interesting approach but is it needed? Says Dmitry Faller, Chairman of Advisory Board at Primalbase: “The entire Shared Workspaces model and the whole idea of constructing such a workspace does not need to implement blockchain – it has worked and is working successfully without the blockchain. However, it is a way to provide services and access to the infrastructure.”

Token-Based Community Membership

A digital currency can make renting a coworking office easier. It reduces the complexity of having to deal with physical entities: you can rent a cryptocurrency token instead of doing complex paperwork and as long as the token stays in your wallet, you have access to the property.

Primalbase has ensured that the token is not transferable to third parties and that there is a minimum 3-month rental. A transferable token can be used to sell the coworking space to a third party and thus transfer rights that users may have to them.

It seems that users are already pretty comfortable with the idea of a distributed workspace. Dmitry Tokarev, Chief Technology Officer of Dolfin, a UK-based investment company, and a member of Primalbase community, said, “At Dolfin we also provide a service to all sorts of clients from all over the world and it seems like such a great idea to have a place where you are guaranteed to have a productive time whilst on a business trip and the same level of service wherever you are.”

Complete Digitalisation Is a Way Off

At the moment, the complete digitalisation of renting out or purchasing and selling coworking spaces is not really possible. Blockchain and a possible future coworking token, such as one that Primalbase are creating will simplify things and add to the system.

They will also prevent misuse of the property through a mix of traditional measures and new-age technology. This system will also make it easier for people to access coworking spaces and reduce the number of middle men involved.

As an example, there is a valid question regarding what if one token holder was to completely dominate a working space. The Chairman of Primalbase reassures that he is “matching classic economy and crypto economy, and therefore the office space is divided into a part rented out to companies in a classic commercial property kind of a way plus a part with a special set of infrastructure for the members with PBT token.”

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