The Advantages of Blockchain-based Marketplaces
Blockchain technology is changing how we buy and sell products online. Because blockchain technology is able to solve security, safety and transparency issues of traditional online marketplaces, it is able to offer a trusted environment for both consumers and sellers.
Problems with traditional marketplaces
With the internet came large online markets that connect buyers and sellers of physical products. These marketplaces also offer payment services that make it easy to pay for transactions. However, these marketplaces turned out to be far from perfect: because money is paid before goods change hands, they are likely to attract frauds. Even though online markets offer ways to guarantee buyers some kind of compensation in case something bad happens, they are far from ideal: buyers and sellers will have to comply with terms of agreements (that might change over time) and share personal data. They will also have to pay a fee to the platform when a product changes hands and use a third-party payment system that is linked to the marketplace of choice. Personal data from buyers can be hacked or stolen, and it’s unclear how a platform uses such data. This makes a traditional marketplace something of a “black box”, that functions as a third party between buyers and sellers.
How the blockchain solves security, safety and transparency issues
Blockchain technology was invented to solve problems associated with digital payments. By eliminating the traditional “middlemen” such as the traditional marketplaces mentioned above, a situation was created where buyers and sellers are connected directly. This would do away with many of the insecurities and dependencies that both parties have to deal with when using traditional marketplaces.
But that’s not all: blockchain technology was also designed to behave as both a secure payment mechanism and provide buyers and sellers with the information they need to enable a transaction, providing both parties with a “single source of truth” as a guarantee (or contract) that commits both parties to perform a transaction. Blockchain technology, in other words, combines a secure payment mechanism and a mutual agreement between buyers and sellers alike. This is possible as the blockchain automatically registers (timestamped) metadata about transactions, that is shared with all stakeholders so that it’s impossible to manipulate information without other stakeholders knowing this.
It is exactly this in-built security that makes blockchain technology a good fit for online marketplaces. It provides buyers and sellers the trust that is the weakest link in traditional marketplaces: transparency for both transactions and agreements is what makes blockchain technology unique, with additional security guarantees for both when realising a payment. That means that an escrow service, where a third-party that can intervene when a dispute happens, is no longer necessary because transparency is guaranteed, always.
Soar, the blockchain and drone photography
By creating a blockchain-driven marketplace for drone, aerial, and satellite imagery, Soar avoids the pitfalls of traditional marketplaces as described above. This was done by adopting the Ethereum platform, that runs on blockchain principles and brings decentralized protocols and tools to the world that empowers developers to produce next-generation decentralized applications and build a more globally accessible, freer and more trustworthy internet.
By using Ethereum’s blockchain technology, drone content can be verified and authenticated before it forms part of the Soar platform. This guarantees drone vendors that their imagery is “real” and not a duplicate of something else. Authenticity is a requirement for selling any kind of goods, regardless of being digital or physical. Whereas physical goods are tangible and therefore easy to verify as authentic, this is less easy with digital goods such as drone images.
However, the blockchain has already proven to be a valuable instrument in guaranteeing authenticity with regards to photography. As research points out, the blockchain can empower and educate clients, resulting in increased seamless transactions of digital images. In a similar vein, Soar adopts blockchain technology to record and add metadata to the blockchain in order to guarantee the image’s authenticity. As for guaranteeing a safe transnational environment for sellers and vendors of drone imagery, Soar uses Ethereum smart contracts, which are pieces of self-executing software that enable direct transactions to be made in full confidence and without a third intervening party.
