Commerce 3.0 Market Landscape: The Decentralized Future of Commerce
The era of Commerce 3.0 is upon us. With the introduction of blockchain technology and its use in creating token-based business models, the market landscape of decentralized commerce projects is growing rapidly. In the process, virtually all aspects of the commerce value chain are being decentralized — from broader platforms that power entire commerce networks to targeted vertical marketplaces and more specific solutions in payments, loyalty, and reputation.
What Is Decentralized Commerce?
Commerce 1.0 represented the age of physical retail, characterized by storefronts located close to consumers and addressing the needs of that local community. While small businesses continued to thrive, the big winners in Commerce 1.0 were the large retailers like Walmart, Costco, and other worldwide brands. With the introduction of the internet, Commerce 2.0 began and ushered in the low-cost, high-scale ecommerce business model designed to meet the needs of a global online audience. Commerce 2.0 has been dominated by centralized storefronts like Amazon and Alibaba that exert enormous influence over nearly every aspect of the commerce experience on their sites. Now, with the emergence of blockchain, Commerce 3.0 has started to take root, building the decentralized networks and structure that will define this next phase of commerce.
So what exactly is decentralized commerce? Both Commerce 1.0 (physical retail) and Commerce 2.0 (ecommerce) were centralized in structure, with large authoritative entities deciding each part of commerce for their business — product selection, pricing, commissions, promotions, payments, and so on. In some cases, local stores or franchises may get decision-making authority, but the limits of that authority are still decided and controlled centrally. Commerce 3.0 reconfigures that decision-making, removing the need for that central authority and, along with it, removing the cost of that centralized middleman.
This is primarily accomplished in two ways. First, blockchain technology enables two unknown parties to transact without having to trust each other. I will not go into the specifics of how blockchain technology works for this article, but by using blockchain, any two people can conduct a transaction without the need for a centralized middleman to be the trusted broker for the transaction. Instead, a large network of individuals share responsibility for watching over the transactions to ensure good behavior. Second, through the use of cryptocurrency or tokens, the value of enabling these trusted transactions and the economy it creates can be fairly shared among this network of individuals. In centralized systems, the middlemen take a cut to fund their business and reward their shareholders, but in this decentralized system, the value is shared among the individuals who are doing the work to protect and grow the system.
Commerce: A Natural Fit for Decentralization
As it has evolved, commerce has become ripe for decentralization. Centralized middlemen extract significant value as their reward for bringing buyers and sellers together, or for facilitating easy payment, or for maintaining customer purchase data. Ultimately, commerce is built on trust, and now decentralization provides that trust mechanism more reliably and at lower cost than central authorities. That lower cost structure is critical because consumers are price-driven. As decentralized commerce projects enable savings to be passed along to consumers, Commerce 3.0 is poised to scale.
Commerce is also shaped by macro trends, perhaps more so than any other industry. Current trends around consumer advocacy for non-exploitative products, customer data privacy and ownership, and general distrust for larger corporations all feed into the value proposition that decentralized commerce represents. Blockchain and a token-based commerce business model enable customers to own their own data and share it as they see fit, as Shopin and Carry are demonstrating. They allow affiliates and influencers to more easily connect with suppliers, as Spl.yt and SPIN Protocol have shown. They allow buyers and sellers to come together without middlemen controlling and extracting value from the experience across a wide variety of industries — from crypto exchanges like IDEX and collectibles marketplaces like Rare Bits to a “decentralized Airbnb” like Beenest and “decentralized Amazon” like OpenBazaar or Particl. Perhaps even more exciting is how blockchain and tokens enable the creation of entire decentralized commerce platforms like SesameOpen, OB1, and Origin Protocol that simplify the creation of decentralized, community-oriented marketplaces. The transition to Commerce 3.0 is well underway.
Commerce 3.0: A Better Business Model
Better technology does not always win, but better business models do. Commerce 3.0 marks an evolution of the commerce business model. The transition may not be immediate, but as more and more projects add fuel to the decentralized commerce fire, it will exceed the growth that ecommerce has seen. The higher value that is created and shared within each decentralized community will attract even more transactions, driving the network effect that will propel Commerce 3.0 forward. This Commerce 3.0 market landscape is just the tip of the iceberg.
SesameOpen’s token sale begins October 16th at Dcoin Exchange.
Until then, earn up to $200 in free token by inviting members to our Telegram group.
