Since the evolution of the Bitcoin, a group of people began to work to get rid of the centralized system established by the government authorities. The revolution of decentralization was intended to avoid the extra fees, imposed terms, and need of middleman for any transaction or trade. It’s been a decade since the inception of Bitcoin. The blockchain sphere has been significantly changed since then and the blockchain community has achieved considerable success in eliminating the use of central authority for processing of monetary transactions and payments through the development of different blockchain-based digital currencies and payment systems. However, the dominance of central authority in trade and business is still the same. The Decentralized marketplaces are aimed to create a trustless, permissionless, and transparent marketplace without need of a central authority.
What is Decentralized MarketPlace?
The word decentralization is in circulation for a long time, however the true effort to bypass the central authority and create a transparent system has been started after Satoshi Nakamoto’s creation of Bitcoin. A decentralized marketplace is one of the significant applications of blockchain technology. The market place built on a decentralized system will allow buyers and sellers to trade without the requirement of a central agency or involvement of a middleman to meet the buyer and sellers. It will enable the traders around the world to indulge in the buy-sell of any sort of service and product without trusting a intermediary.
The dream of a decentralized market would be achieved with the help of smart contracts. A smart contract is a protocol developed on blockchain and aimed to digitally facilitate, verify, and complete a transaction. The transaction will automatically execute without any intervention once a pre-defined set of terms meet. Furthermore, the transactions made on smart contracts are irreversible and trackable, several people witness and verify the transaction to eliminate the chances of any error. If a person wants to buy a certain item from the decentralized marketplace, they will have to provide the required money to the system and complete all the requirements to buy the specific item. Based on the ‘If-then’ principle, the smart contract will pass on the ownership of that item to the buyer once the money received and all pre-programmed requirements meet. The entire process would be much smooth, transparent, and quick in comparison to the traditional system. Moreover, trade on the decentralized marketplace will not have a trust issue. Hence it saves a huge sum of the amount that spends as fees to the intermediaries.
Popular Decentralized marketplaces
Openbazaar is a leading and one of the popular decentralized market place. This platform offers a great user experience and support listing of items from the sellers throughout the globe. It does not charge any monthly fees, platform fees, or listing charges. Furthermore, a wide range of cryptocurrencies is accepted for the payment to eliminate the dependency of the bank account or credit card and make it truly free from any restrictions.
Blockmarket is a blockchain-based decentralized marketplace. It was developed on smart contracts and used Syscoin cryptocurrency. It is currently available on Desktop and offers custom token creation, escrow service along with the decentralized marketplace. It has a high rate of transactions; although it has its own blockchain, it uses a technology called Syscoin Bridge to make it compatible with other blockchains.
Origami Network: It is not technically a marketplace but a project that helps create smart contracts and standards. It facilitates the creation of own decentralized marketplaces on the Origami network based on Ethereum. Origami network has all the attributes required for a completely decentralized marketplace such as open-source and creation of smart contracts. ORI is its own ERC20 token used for the regulation as well as payment within the system.
Current Challenges and Future
The traditional marketplace, like eBay and Craiglist, is still dominating the market despite numerous cases of fraudulent transactions without any help from their customer service. The requirement of the intermediary resolves the faith issue but creates a lot of issues along with the burden of fees and charges. The blockchain technology is still at its early stage. People around the globe are still learning about the usages and benefits of blockchain technology. The reduced number of users due to unawareness about this revolutionary technology is a major obstacle in mainstream adoption. Although people are getting interested in trading and investment in cryptocurrency, such marketplaces are being used by a very low number of tech-savvy individuals. Moreover, the current system has many loopholes and technical glitches and not immune to hacking. However, developers around the world are working to refine the existing system to develop an ideal decentralized marketplace eliminating the existing technical and other drawbacks. If the adoption of cryptocurrency continues to expand with the current place, these blockchain-based marketplaces will soon dominate this segment due to its immense advantages on the conventional marketplaces.
Pritam is a Digital Entrepreneur and keen follower of the Crypto and Blockchain world. He has spent five years working as Digital Marketing Manager where he helped finance professionals and Fin-tech startups build an audience and get more paying clients online.
Pritam enjoys exploring the latest technology and news related to Fintech world. He is a go-to person with a positive attitude towards life.