With the advent of e-commerce primarily introduced by websites eBay and Amazon as early as 1994, the manner in which individuals buy and sell goods has forever changed. Despite the fact limitations existed for marketplaces that preceded the Internet, the early establishments opened a wide gamut of opportunities for consumers, producers, and sellers. These shook the fabric of the mom-and-pop shop and brick-and-mortar retailers, urging every owner to shift some if not all of their business to an online presence.
Yet today, the world is witnessing a brand new cycle of development with the growing emergence of a technology known as the blockchain. After being introduced into the global economic system, the blockchain has disrupted nearly every single industry by forever altering the manner in which transactions are made in everyday lives and online.
What is “Blockchain”?
The blockchain is a decentralized technology operating as a platform; implementing ledgers that record, track, and verify all cryptocurrency contracts and transactions between one or more parties. Consequently, these marketplaces are defined as peer-to-peer networks; directly connecting to sellers and consumers without a single intermediary as commonly seen with traditional banking transactions. By definition, a decentralized marketplace is composed of three users; including consumers, producers, and sellers.
What are the key advantages of Blockchain over the Traditional marketplace?
The network of the blockchain marketplace is decentralized and directly supported by nodes or users that contribute computing power; enabling maintenance and availability on a constant basis. Conversely, the traditional marketplace regulates and owns the network via a third party; requiring that the users of the platform comply with the terms.
Payment and fees are handled directly under the blockchain structure with tokens known as cryptocurrency, which are often subsequently exchanged for fiat or Bitcoin. Transaction fees are often very low if not entirely free for security validation. On the other hand, traditional marketplaces handle the majority of transactions with credit cards whose assets are backed by centralized banks. Furthermore, they often charge a percentage for every single transaction and this typically differs depending on the marketplace.
Without any needed intermediary, payments and transactions are instantaneous with blockchain, unlike traditional marketplaces that require third-party services. Data is considered immutable via blockchain, making it impossible to change or delete, and the marketplace provides full transparency with respect to services in products. As a result of the aforementioned comparison, it is clear that blockchain represents a superior alternative to traditional marketplaces.