Why Decentralized Marketplace is a Need of the Hour?
By Shubhi Tiwari on ALTCOIN MAGAZINE
Decentralized market is the harbinger of things the world has never perceived before. This is going to be possible only in the world of blockchain technology. This next phase of the internet is simply inevitable. People who truly contribute value in a network will be redistributed with value, in a decentralized marketplace. Since there won’t be any single data resource, the possibility of hackers will be reduced drastically. We will be able to see the utmost transparency in a transaction between parties who share mutually agreed data.
A decentralized marketplace will empower peer–to–peer transactions avoiding the fees taken by centralized authorities. Smart contracts and blockchain will verify sellers and ensure payments. Few decentralized marketplaces have been built on the Ethereum blockchain and the NEO blockchain as the DAG, so far. There will be few challenges that cognates with replacing already established marketplaces. But enormous opportunities subsist to create a new decentralized generation of marketplaces. Prediction markets, decentralized storage and exchanges, data marketplaces are some examples. Their business models are built around tokens. The buyers pay fees via tokens and sellers earn tokens by contributing to the marketplace.
The online marketplaces like eBay, AliExpress, etc. are big billion companies, but will eventually grapple to compete with blockchain based decentralized marketplaces of tomorrow. Independent parties use the 0x protocol to build decentralized exchanges on Ethereum. They are used to transact with cryptocurrencies in an easy and secure way. For instance, Origami Network uses the same protocol and avoids the involvement of a middleman. Marketplaces that are built with Origami offer payments instantaneously, have lower fees and are permissionless. Trustworthiness of buyers and sellers is established due to the decentralized reputation system. These marketplaces cannot be regulated or shut by any third party.
Another such marketplace is FundRequest, where buyers can safely request development work. It is used for open source software development and to fix bugs, for security audits, etc. On the completion of requests, developers earn funds. This decentralized platform supports ETH and ERC-20 tokens which makes things easier for users. Any project can smoothly fund their development tasks from their fund wallet. There are other decentralized marketplaces like OpenBazaar, ModulTrade, Blockmarket (Syscoin), Bounty0x, Ink Protocol (Listia Marketplace).
The blockchain fundament will connect and develop the entire world with global currencies. The middleman with their economic inefficiencies will be eliminated. Now, the question is, how soon will decentralized marketplace take over the world of e-commerce? We are uncertain of how soon will it disrupt the current centralized and established markets. As the percentage of online trades grows each year, it becomes beneficial for robust decentralized marketplaces to emerge to light. Either the products information will directly be placed on a blockchain and buyers can purchase by referencing the same blockchain. Or a network of nodes which can communicate directly can be created, like BitTorrent. A contracting system ensures the clarity of trade details. For instance, whenever a seller lists an item, it’s signed by the seller’s digital signature. The buyer also has to sign after agreeing to buy the item. The important details for the transactions to take place, along with the required signatures, are then appended to the contract. This creates an unchangeable record of trades, proving the participation and agreed details of both the parties. The system of fees gets completely eliminated here. No fee is taken by any middleman to list the products and no fee is required when the products are sold. The trade occurs directly between the buyer and the seller. There are no restrictions on the trade, nor any terms & conditions to be followed. Neither any registration is required, nor any data on the user’s spending is collected by any central authority. The only two things such a marketplace will require are owning a computer and an internet connection.
The unique concept of Bitcoin named ‘multi-signature transactions’ will prevent fraud in the decentralized marketplace. Instead of having just one sender, the control is divided between multiple senders. They must agree before the sending takes place. There are multiple multi-signature arrangements that are available. The law enforcement on decentralized markets is potentially a time taking procedure. This nascent technology is largely under development. Another quality is that such a market is not really bewitching to criminals or cyber-crime. All activities on the network can easily be monitored by law enforcement on some of the leading decentralized marketplaces. The truly internet based sovereignty can be seen once the decentralized markets displace the current dominance of the centralized system. Such a system is really a need of the hour.
