Decentralized marketplace – this term has been buzzing around every nook and corner of this world for the last few years. Can you remember how often you have heard of it in recent times? Well, that might have made you think that decentralization has come into vogue afresh. But the reality might shock you!
The Coexistence of Decentralization With the Internet
You remember the day when the world wide web came into existence? The concept of decentralization was established back then only. Yes, the internet was built with a motive of allowing every person to participate equally. The structure of domain and servers owned individually on a shared network was made keeping the value of decentralization in mind.
But things did not work out like it was supposed to be. A handful of bureaucrats turned it more like a centralized place where users have to depend on third-party platforms for a fruitful outcome. However, with time, the market has realized that there are hidden security risks with the existing process. And thus, today, the initiative of building up a decentralized marketplace has been reincarnated.
What Is a Decentralized Marketplace?
According to Investopedia’s definition, this market structure involves a network of several technical devices, creating a marketplace that is not centralized. It eliminates the necessity of any third-party exchange. Investors come across a list of bid prices through which they can directly sign the deal with others.
Decentralization is independent of any central authority, which means there is no governing body to control the transactions in such marketplaces. Its facility of direct peer-to-peer connection makes the system more transparent and reliable.
How Does Decentralized Marketplace Work?
Blockchain technology is another buzzword of today’s digital world. Though for many, blockchain is another word for cryptocurrencies, that’s not the actual fact. This technology is also the developmental core of a decentralized marketplace.
Blockchain revolution defines blockchain as “… and incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Just as the name implies, this marketplace creates blocks of information in a chain with cryptographic language, which is tough to tamper. These blocks are transparent to everybody whoever participates in the transaction.
Even though everything is decentralized, the validation of transactions and storing the data call for a structured rule to make the participants aware. Blockchain takes care of this by consensus protocols. It is like an agreement done between nodes describing the terms and conditions of what to store and their truthfulness. These governing rules bring all the devices spread across the globe into a consensus as to let go of any corrupted activities.
For a better understanding of the workflow of the decentralized marketplace, let’s take the example of one of the most popular sites – BitBay.
On BitBay, sellers enlist their goods and services just like any other traditional platform. Here, users are also enabled to hold auctions opposite to the given prices, competing to become the supplier. BitBay has an escrow system of double-deposit, knocking out any dishonest attitude.
Five (More) Examples of Decentralized Marketplace
- FundRequest – It is an open-source, decentralized marketplace for software development. Requesting for developmental tasks such as bug fixing, implementing new features, or security audits, have been made smoother and safer with this platform. FundRequest connects software development organizations with the developers, where both the parties gain significant profit with the help of the peer-to-peer networks. Project funding has been made easy with the usage of tokens such as ERC-20 and ETH, enabling users to purchase the developmental tasks directly through their wallets.
- Mainston – Being a newbie in the industry, Mainston has already made its mark with its uniqueness. It is considered to be the first decentralized marketplace that allows for worldwide transactions. By using Ethereum blockchain technology, it lets users both buy and sell products across the globe. The operation takes place with Mainston blockchain, where users can directly communicate with each other. With the implementation of smart contracts, Mainston keeps the transaction tamper-proof. If you want to migrate your listings from any other platform, this blockchain-based marketplace also allows that.
- OpenBazaar – OpenBazaar is one of the most revolutionary marketplaces equipped with decentralization. One can buy and sell anything on this platform using more than 50 cryptocurrencies. To ensure its activities to be free from any central authority, it requires you to download the program. OpenBazaar has disabled any sort of scamming with the usage of Bitcoin’s escrow feature of multi-signature.
- beBee – We call beBee as blockchain’s LinkedIn, which is used for branding – both professional and personal. Hubspot, Oracle, Deloitte are some of the companies involved with this platform. Users can market their portfolios on this marketplace to get connected with professionals and improve their careers.
- Sanjh – Being the brainchild of Muvi, Sanjh is the world’s first decentralized content marketplace, where creators or owners list their content copyright to sell them to interested buyers. Its smart contract powered by blockchain technology guarantees a secure and transparent transaction.
Why Is Decentralized Marketplace Important?
Taking into account the eCommerce platforms like that of Amazon, eBay, Alibaba, and so on, every day, transactions worth millions of dollars take place. These companies, being the central authority for both buyers and sellers, hide a certain percentage into the selling amount (generally 10%/item) to earn the profit. And it’s not only about charging these fees, but they also store user data for further proceedings. This, indeed, is risky, even though you have not faced any negative consequences so far. For instance, back in 2015, Amazon prohibited selling competitors’ video streaming equipment to enhance their own sales.
But all such negativity can be diminished with the decentralized marketplace. Here’s a walkthrough to the benefits of such platforms:
- No Middleman – There’s no governing body to control transactions, deduct fees, or collect data. Everything remains transparent between the participants; they, themselves, decide on the norms.
- Secure – Blockchain-based marketplace stores information in cryptographic hash and each block is linked to the previous creating the chain. Thus tampering, deleting, or availing any information is quite impossible. So, participants can be sure of keeping their data safe.
- Transparency – Decentralized approach keep participants updated about the new information. So, when a block is added to the chain, everybody gets notified. Thus the entire process remains transparent.
- Cost-effective – As there is no third-party involved in the transaction procedure, no additional payment is necessary. Direct peer-to-peer connection decreases the expense a lot – both from a buyer and a seller perspective.
- Global Presence – The moment you are entering into a decentralized marketplace, you can be sure of reaching a global market. You can avail of these assets from anywhere across the universe.
*Know how Decentralized Marketplace can woo the eCommerce Industry, here.
Decentralization is a rebellion in itself. Be it from a political perspective or from the perspective of stabilizing the world economy – it has brought back the freedom of the internet in every way. Along with keeping the benefits of centralization intact, they have come up with their own positivity, which is undeniable. And this blockchain-based marketplace is the future because of its amazing security and transparency.
So, go ahead and participate in the decentralized marketplace to make everything more efficient, just like the innovators of the internet imagined to be.
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