Decentralized Reputation: What is it Good For?
Almost all online marketplaces and communities have their own version of centralized reputation. For example, marketplaces like eBay and Listia have a positive, negative, or neutral seller feedback rating system, while others like Amazon, Etsy, and Yelp use a 5 star rating system for their businesses and service providers.
These systems already work very well within their own ecosystems, but imagine if services opened up their reputation systems and allowed customers to take that reputation anywhere! eBay users would be able to use their reputation and sell more reliably on other marketplaces like Craigslist, while Amazon vendors could instantly start selling their products within other eCommerce portals without needing to rebuild their credibility. This is obviously great for the sellers and businesses, but arguably not as great for the marketplace that owns your reputation. Currently, this reputation is a competitive advantage for them and it is often the main reason they are able to justify the high transaction or listing fees that many marketplaces charge.
So, if there’s little incentive for existing marketplaces to open up their reputation systems, then there is a huge opportunity here for someone else, like Ink Protocol, to step in and create a decentralized reputation protocol that any marketplace can hook into and any individual or business can use.
With such a reputation protocol, you’d be able to earn feedback and reputation for transactions no matter where they occur and then display that reputation proudly everywhere. Imagine selling a few collectibles on eBay or Listia with positive feedback, running your small business on Etsy with more positive feedback, and then displaying that 100% positive reputation on Craigslist when trying to sell your couch or car. This sounds great, but technically we could have decided to build a third party centralized reputation system and achieve the same thing. So, the question becomes.. if a centralized system could be good enough, then what additional factors would drive people to prefer using a decentralized one?
In a fully decentralized reputation system:
- Nobody can tamper with your reputation, because nobody owns your data.
- Your reputation and history are censor-proof.
- Reputation would be portable across marketplaces, platforms, and geographies and nobody can prevent you from earning or using it.
- No central authority can require you to give up personal information in exchange for storing your reputation.
- No company is directly profiting from monopolizing your reputation so marketplaces must compete more on fees, thus lowering them for everyone.
- No company can force you to pay additional fees or sign up for premium services to selectively show or hide reputation you have earned.
The promise of being able to earn and use reputation everywhere is going to be a huge deal for users. Ultimately, we think it will stimulate competition among marketplaces, improve the quality of service everywhere people transact and long term contribute to the rise of new, fully decentralized marketplaces.