The Decentralized Marketplace: Bitcoin's Next Killer App
Bitcoin’s killer apps are coming soon. You can almost taste it in the air. Some big things are coming this year in the crypto-world, and they are going to shake up the globe. No one knows what these applications may be, but some are guessing.
Also Read: Toward Techno-Anarchy: Blockchain Tech Will Thwart Government, Transform Society
There are two concepts in the Bitcoin world that may change the paradigm of how we transact on the internet and in our everyday lives: decentralized marketplaces and remittances. This is the beginning of a two-part series in which I will cover both subjects with decentralized markets first.
“Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions.” — Timothy May, CryptoAnarchist Manifesto
Since the days of the Cypherpunks, the dream of a decentralized online marketplace (DM) has occupied the minds of many. A DM is a network of people who transact without the need for a centralized location or third-party arbitration. Various technologies and software allows users in a peer-to-peer atmosphere to work together in an autonomous and sometimes anonymous way. Instead of a third-party, the system relies on a distributed network run by its user base. Anything can be sold on this platform, and the money is typically protected by certain protocols such as multi-signature for wallets, escrow-based or Ricardian contracts, and zero-knowledge techniques.
One project that’s got the community waiting is OpenBazaar (OB1). The initial inspiration behind OpenBazaar was to build a Silk Road no one could take down. The project originally came from the dreams of Amir Taaki and was previously named Dark Market. OpenBazaar CEO Brian Hoffman forked the Dark Market project and began to create what became known as the decentralized eBay. Now, the team has a fair share of developers and volunteers building its inner workings. Furthermore, Andreessen Horowitz and other investors have injected $1 million of funding into the OpenBazaar project and development is steady. Also, Openbazaar’s CEO doesn’t want it to be the next Silk Road as it wants to include everyone from everyday eBay sellers, to those selling on Etsy, and artists who want to monetize their material.
OpenBazaar will operate in some unique ways that help push forth pure peer-to-peer decentralized markets. The system employs an escrow system like the Ricardian contract solution mentioned above. The concept was first discussed by Ian Grigg in a paper he published researching the Ricardo payment system with Gary Howland. The network uses this escrow system to make sure the wealth is not in the hands of a third-party at any time. The software also uses 2 multi-signatures technologies to complete transactions and ensures funds are kept safe within its protocol.
There have been other attempts to create decentralized marketplaces that operate with sound security and escrow like systems. Syscoin, BitBay, NXT, and others have also moved towards the decentralized market holy grail with their own versions and using their own Altcoins. For a while, there will always be developers trying to handle decentralized marketplaces within both black and white markets. Right now darknet markets (DNM) are also still very much centralized and have fallen like Agora and the Silk Road. There hasn’t been a decentralized marketplace that can handle the black market nor anything in between. Most trading exchanges, online markets, and wallet services are still completely centralized, and the point of accessories is to emulate the hosted currency.
The NXT FreeMarket is another form of a decentralized market running over the NXT blockchain. The platform is similar to the eBay model but more laissez-faire with the website stating, “because you should be free to trade.” FreeMarket claims to hold a superiority over eBay by enabling people privacy. There is no registration and no third party involved as the system is not kept up by centralized servers. The NXT marketplace is resistant to takedown they say as the operations are done via the blockchain. Using the service does involve very small fees of the NXT digital currency. The listing fee they set at 7.77 NXT, a complete sale costs roughly 10 NXT. Payments via NXT are built right into the distributed ledger. It also encrypts messages between buyer and seller.
Whatever the case may be, strides are being taken to create a Silk Road that cannot fall to demise and also a white market with decentralized features as well. One very much secured like the network of nodes and miners in the Bitcoin ecosystem that runs 24/7. Whoever creates a market that pushes this envelope will succeed in the next step to creating a true laissez-faire. The legacy of the cypherpunks are made by both people on the forefront of activism and also just merely writing code. Eric Hughes told the world that these technologies were coming by people who were tired of the State corruption and its invasive tactics. Way back in the day before Bitcoin was born he said “We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money.Cypherpunks write code.” They sure do.
What do you think of decentralized marketplaces? Let us know in the comments below!
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