Blockchain’s Killer Apps are Marketplaces
In order to be fair venues for exhange, marketplaces need operators that act as neutral third parties. A level playing field for buyers and sellers is critical, especially in digital venues where the ability control the flow of information will naturally result in monopolies.
There are several features of distributed ledger “blockchain” technologies that make them excellent venues for the fair exchange of digitized goods. One of these features is the ability to facilitate peer-to-peer exchange, without the need for middlemen. And one of the best teams building the tools to create these peer-to-peer “decentralized” marketplaces is the 0x Protocol. Their short explainer video (1min48) depicts the current state of affairs.
A middleman stands on the bartering table between the buyer and the seller. Because he sets the rules and controls the flow of information and payments, he wields too much power and takes more than his fair share of the bargain. Because his centralized marketplace is mostly opaque to the participants, the middleman might be incentivized to:
- Hide fees
- Play favorites
- Fix prices
- Look the other way when fraud occurs
- Cannibalize the most profitable participants using his venue
- Skim off valuable business intelligence and sell it without compensating participants
Using the 0x Protocol, we can remove the middleman and let the buyer and seller exchange any kind of digitized good or service directly.
Microsponsors is creating a “trust-minimized” marketplace for sponsors and advertisers so they can take control of their marketing budget (and its supply chain)… and for creators and publishers to get paid for their work. While it may sound counter-intuitive, the radical innovation of trust-less and trust-minimized markets is that there are fewer (if any) centralized middlemen who we must trust in order to transact with one another.
To provide a fair and level playing field, Microsponsors is removing middlemen and automating trust — and that’s a good thing.
As we get started, some of the functions of the marketplace operator will be centralized out of necessity: verifying participants, establishing a reputation system, relaying orders, fraud detection, etc. But over time, we will seek to minimize Microsponsors’ involvement in the operator’s functions and replace them with software and even better: market participants who can perform these functions instead, so they can also participate in the economics of this dynamic multi-sided marketplace.
Over time, part of Microsponsors’ mission will be to simply get out of the way. We think this is a radical business innovation that will help fight centralized monopoly power and realize the most democratic ideals of the internet, and the markets built on top of it.
If this sounds interesting to you, please reach out so you can participate in our Limited Alpha release. Email hello\@/microsponsors.io or hit us up on Twitter: https://twitter.com/microsponsors
