2008 was a dynamic year for cultural change both nationally and globally, and was a catalyst to today’s growing peer-to-peer (p2P) marketplace economy. The Great Recession, Presidential Election, and newly emerging Sharing Economy companies all demanded attention from Millennials in particular, and the result was a shift in Millennial values from those established by their Baby Boomer (or Gen X) parents: In 2008 conspicuous consumption was out. Sharing resource access is favored over personal resource ownership.
Historically, a marketplace is an arena of commercial dealings; it is the world of trade and value exchange facilitated by currency. At the most fundamental level, a marketplace is a meeting of resource supplier and resource procurer, and is immediately responsive to change on either or both sides of the supplier-to-procurer relationship.
In 2008, both sides began to change as the trend of hyper consumption of both consumers and enterprises was rebuffed. At the same time, the Satoshi white paper “Bitcoin: A Peer-to-Peer Electronic Cash System ” was published to The Cryptography Mailing list at melzdowd.com (providing new p2p transaction abilities and greater supplier protections). On November 4th 2008, three days after the white paper was released, Barack Obama was elected to become the 44th President of the United States. Millions of tuned in to view his historic acceptance speech. Obama earned 365 electoral votes to the 173 votes earned by John McCain, and exit polls showed that 62% of voters considered the economy to be the top issue of the election .
The 2008 presidential election occurred on the heels of 2008’s global Great Recession. The recession was catalyzed by the U.S. subprime mortgage crisis that resulted from the decline in home prices, resulting mortgage delinquencies and foreclosures, and associated devaluation of housing-related securities. Subprime loans are those offered to borrowers at an interest rate above that charged to the most credit-worthy customers, as such borrowers have a higher likelihood of defaulting on debt repayment.
In 2003, 8% of total mortgage loans issued were subprime mortgage loans, and in 2005 and 2006 the rate reached 20% . As housing prices declined and mortgage interest rates rose, many subprime borrowers and housing speculators defaulted on debt repayments. Serious delinquencies skyrocketed in late 2006 through 2007 . The demand for subprime mortgage backed securities halted  and these securities, held widely by financial firms worldwide, lost most of their value. Credit markets constricted and the Great Recession was inexorable.
Home foreclosure fear, unemployment fear, and job loss was widespread. Foreclosure filings surpassed 3 million in the U.S., and unemployment rose from 5.0% to over 7.5% . Housing prices fell, the stock market tumbled, and the net worth of households and nonprofit organizations declined from over 65 trillion in January 2008 to less than 56 trillion in December .
While people managed the anxiety associated with these conditions, United States citizens were tasked to evaluate their beliefs and values as it was a contentious election year, and Presidential candidates Barack Obama and John McCain were polar opposites. All voters, but especially campaign-targeted New Voters and Swing Voters (groups comprised in significant part by Millennials), had much to reflect on in the months preceding their vote. In this way, Millennials were forced to be conscious and reflective.
As a result, the 2008 global recession profoundly changed consumption, and a younger generation’s thought on their own consumption. People began to define themselves more as Users and Makers, and less as Consumers. The preference to collaboratively share resources, set against the preference to singularly own those same resources, increased. Conscious consumption of resources was desirable, while conspicuous consumption was not. A widely reported presidential campaign gaffe centered upon this tension.
In an interview with Politico conducted on August 2008, presidential candidate John McCain said that he was uncertain of how many houses he owned in response to a question, “I think – I’ll have my staff get to you.” This inspired a Democrat campaign video titled Seven, for the number of houses McCain was immediately identified and then reported to own. McCain’s apparent inability to recall the residences he owned came to symbolize consumption for the sake of excess. Although the culture of previous decades may have admired this casualness of riches, it was out of step with the evolving culture of 2008.
Old guard subprime mortgage originator New Century Financial Corp filed for Chapter 11 bankruptcy (April 2007), followed by Bank of America acquiring Countrywide Financial in an all-stock deal (January 2008), The Federal Reserve Bank of New York providing $29 billion in financing to allow JPMorgan to buy Bear Sterns (March 2008), the U.S. government placing Fannie Mae and Freddie Mac into conservatorship (September 2008), and Lehman Brothers collapsing (September 2008), amongst other catastrophic events . Concurrently, Sharing Economy collaborative marketplaces Taskrabbit and Airbnb emerged in February and August of 2008, respectively. Sharing Economy crowdfunding platform IndieGoGo officially launched in January 2008. With the crises of old guard centralized institutions providing the backdrop, the internet enabled Sharing Economy emerged.
Similarly to the presidential campaigns, these sharing companies targeted Millennials. The (1) Economy’s, (2) Democrat’s, and (3) Sharing Economy companies’ message was to Millennials was consistent: hyper consumerism is old-fashioned and peer-to-peer collaboration is cool.
Peer-to-peer collaboration was so cool that it was leveraged and lauded for Barack Obama’s successful 2008 fundraising campaign. The Obama campaign organization reported that over 80% of donations made were from small donors contributing less than $200. Obama became the crowdfunding candidate of 2008.
In 2008, the popular Presidential vote split 53% for Barack Obama. Voters age 18 to 24 chose Obama 68% of the time verses McCain 30% of the time, and voters age 25 to 29 split 69% for Obama and 29% for McCain. In exit polling, first-time voters indicated an overwhelming preference for Obama over McCain, at a 72% to 27% split .
The early growth in internet enabled Sharing Economy companies continued in 2009, as popular peer-to-peer sharing companies Getaround, Uber, Rent The Runway, and Kickstarter launched. The Sharing Economy was on its way, and has continued to expand through 2014. As the Sharing Economy matures, the concurrently introduced innovation of Satoshi’s blockchain technology will be increasingly relevant as the peer-to-peer nature of the Sharing Economy gains prominence.
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