Blockchain Use Cases in Social Marketplaces
Blockchains could takedown the marketplace stack by changing the way we pay for goods in marketplaces. Paying with bitcoin, or any blockchain-enabled currency, can allow users to pay almost instantaneously, with very small transaction fees and without requiring any financial intermediary. This would completely change the overly long value chain of Internet payments (the front-end processor, …the acquiring bank…the card association…the payment processor…the issuing bank…the clearing house network… this complexity driven by the fact that banks don’t operate on the same database).
Self-enforceable (“smart”) contracts
Many vertical marketplaces have started growing once they’ve been able to act as a third-party guarantee, either holding the funds before the transaction is completed (escrow) and/or guaranteeing the quality of the goods/service sold through their marketplace.
Using cryptographic trust, which is at the core of blockchains’ smart contract capabilities, the conditions required for a transaction to happen, could be written in code. Funds’ release could also be unclenched automatically by predefined triggers written in code.
The simplest example of how automatic contract execution would work is a contract for sport live betting. Instead of having to rely on a third-party guaranteeing that the score is exact and then releasing funds, two players could sign a contract, mutually agreeing that the results provided by any Sports API would be considered as valid. Once results are available, this API would send the results as an input to a contract. This input would unclench automatically the release of funds. This seems a bit far fetched, and somehow specific to something where conditions are available on the internet. That said, the advent of the IoT could change this radically. Think of a container connected to the Internet, which arrival at a port could unclench automatically the release of funds between the importers and the exporters.
A protocol with built-in data
A protocol is a “specification of how entities should communicate”. TCP / IP is the decentralized protocol over which any internet application is built today. Bitcoin itself is a protocol to exchange value and data. Interestingly, the blockchain lets developers create new protocols on top of the bitcoin blockchain, or a based on a new blockchain, and customize it for a specific purpose. Colu’s coloured coin is a protocol built on top of the Bitcoin blockchain to issue and represent any assets digitally.
Blockchain technology allows users to store and decide at their will if they want to share their personal data with others. In other words, users’ data would not be stored on marketplace operator’s servers on AWS, but on an instance owned/managed by each user. More interestingly, we could own our personal data on one unique blockchain-enabled platform and use it on multiple marketplaces.
We would then be moving from a paradigm where each user would have a separate identity and reputation on each platform to a paradigm where users would have a single identity owned and controlled by himself (and stored in the blockchain).
- Create a global network of trust,
- Increase trust on each of the platform individually and
- Prevent marketplaces’ ownership of our ability to transact.
What about social markets
With everything mentioned above, there’s a new exciting startup who got everything figured out and can even do it socially.
From the early days of history, trading has been a social phenomenon. Historically, people have assembled into the marketplaces and bazaars in order to exchange pleasantries and trade with items that were imported from the different parts of the world. Today, the situation has changed remarkably.
The majority of the C2C-trade happens in internet platforms, such as eBay, which offers its users a ”one-stop-shop” platform to list items for trading and bartering. However, the contemporary platforms have deviated from the historical standpoint of trading as the people are usually hidden behind the anonymous usernames. Thus, the current platforms merely offer a forum for trading without any features that would facilitate social interaction.
The lack of social interaction between the users removes an important element, something which has been a natural part of trading and exchange since the beginning of the economic activity between human beings.
This does not reflect the current market trends and based on our research, there is a huge demand for a platform that will unite trading and social interaction between the users. This is where Soma stands out from the crowd. The fundamental purpose of Soma is to bring the social aspect of trading back into the digital marketplace. Soma implements all the widely recognized social media concepts in its platform, such as liking, following, and sharing.
Users are encouraged to engage in these actions by getting a reward in Soma Community Tokens (SCT) as a compensation for the user’s contribution to the social capital of the community. Thus, Soma provides an environment that guarantees a fair distribution of wealth for the members of the community.