4 Reasons Why Decentralized Marketplaces Are Inevitable

Here are 4 reasons why I believe decentralized marketplaces are coming and will be here far faster than most people realize.

  1. Throughout history middlemen have suffered a common fate. Markets like to be efficient and middlemen get replaced with more efficient alternatives, whether that is travel agents being replaced by Kayak and Expedia or expensive financial advisors being replaced by Wealthfront. The blockchain gives us a chance to cut out those rent-seeking middlemen, with revolutionary new business models that allow fees to go to ~zero.
  2. The blockchain is not owned or controlled by any central entity. There’s no single point of failure. This lack of centralization gives us censorship resistance — not only from governments that like to ban certain types of marketplaces, but also from centralized marketplaces which like to pick and choose who is welcome to use their platforms. Look at Uber and Airbnb as examples. Both companies have been banned or heavily regulated in cities all around the world. Likewise, those companies have a history of banning certain individuals for life from ever using their marketplaces.
  3. Decentralized marketplaces allow us to redistribute value to the people who actually contribute the most value in the network. Uber and Airbnb wouldn’t be here today if it wasn’t for the first 100 drivers or hosts, but what did those drivers or hosts get in exchange? Meanwhile, the early employees, investors and founders get filthy rich. New token economics give us a “better than free” business model that incentivizes people to use a platform that rewards early participants in the network.
  4. Blockchain powered marketplaces are instantly global. This is a non-trivial advantage over anyone who attempts to create a centralized marketplace and has to wade through the local laws and banking regulations for each and every jurisdiction in the world where they wish to operate.

We talk in more depth about these four arguments for decentralizing the sharing economy in the Origin Protocol product brief. I hope you’ll check it out.

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