
Decentralized Blockchain-Based Electronic Marketplaces - rbanffy
https://cacm.acm.org/magazines/2018/1/223888-decentralized-blockchain-based-electronic-marketplaces/fulltext
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joshfraser
There are four reasons I think decentralized marketplaces are inevitable:

1) Throughout history middlemen have suffered a common fate. They get squeezed
out at every opportunity. We have a chance to cut out the rent-seeking
middlemen, with revolutionary new business models that allow fees to go to
~zero.

2) Blockchain technology gives us a censorship resistance. Not only from
governments that like to ban certain types of marketplaces, but also from
centralized marketplaces which like to pick and choose who is welcome on their
platforms. Just look at Uber and Airbnb as examples. They have been banned in
cities all around the world & have likewise banned certain individuals for
life from ever using their marketplaces.

3) We can redistribute value to the people who actually contribute the most
value in the network. Uber and Airbnb wouldn't be here today if it wasn't for
the first 100 drivers/hosts, but what did those drivers/hosts get in exchange?
Meanwhile, the early employees, investors and founders get filthy rich. New
token economics give us a "better than free" business model that incentivizes
people to use a platform that rewards early participants in the network.

4) Blockchain powered marketplaces are instantly global. This is a non-trivial
advantage over anyone who attempts to create a centralized marketplace and has
to wade through the local laws and banking regulations for each and every
jurisdiction in the world where they wish to operate.

~~~
UncleMeat
I consider network censorship to be a feature, not a bug. I want airbnb to be
able to enforce that hosts are not able to deny service to black people. I
want my uber driver to have insurance and a quick background check. From the
perspective of somebody in the marketplace I _prefer_ having people who break
the social contract removed. Now there can be marketplaces that screw this up
and perhaps there is some place for a truly censorship immune marketplace but
they will be niche rather than taking over existing systems.

Development is not free. Users generally want new features over time. A
distributed 2000-era netflix service where people mail each other dvds
wouldn't survive in 2018. Who does development without a middleman? Part of
the reason why something like uber works is because drivers do not have the
technical capacity to build their own system.

The idea that cryptoassets and associated systems is going to bring about a
revolution that frees people from capitalism is insane to me. Wealth is
amazingly concentrated among early adopters and difficulty curves are
generally weighted hard towards benefiting a few early people. Why would a
distributed marketplace suddenly bring the power to the people? You still need
the capital to buy a car to be a distributed-uber driver after all.

~~~
dane-pgp
The feature you are looking for is not "censorship" but "reputation metrics"
(in fact, they should be "uncensorable reputation metrics"). If a trusted
third party (not necessarily Uber) told you whether a given driver had
insurance, then your decision to transact with the driver could be based on
that. (More likely, whoever made the app you use would do the "has insurance"
check for you, and not show you any drivers that don't have insurance, and
they would list this filtering as a feature of the app).

As for who is going to pay for this, the users can still pay money for the
individual apps (perhaps they would get a commission from each ride they
enable, unless a Free Software alternative emerged), and the app makers could
pay a licensing fee to the third party that provides the insurance check or
other reputation metric.

The real unsolved problem is how to decentralise a reputation system without
it being subject to Sybil attacks or breaching people's privacy.

~~~
adrianN
This only shift the responsibility. Now those with the authority to provide a
good reputation decide who gets to sell their goods. For example you would
probably have a problem with dangerous electronics in a decentralized market.
Only experts can tell you whether the USB charger you're looking at is safe,
so whoever moves first to become the defacto authority for electronics safety
in that marketplace effectively controls who can sell.

Not that I think that this is a bad thing. As a consumer I want somebody else
to take care that the things that I can buy don't kill me and I wouldn't trust
some random commenters on the Internet for that kind of information.

~~~
sharemywin
The world/internet as a whole is trying to figure out how to manage delegating
authority(trust) aka fake news etc.

I think we are in the process of transferring from institutional authority to
algorithmic authority.

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sktrdie
Aren't you guys tired of this whole blockchain thing? I'm a bitcoin proponent
and love the technology, however it's becoming a truly "fake news" type of
environment where new cryptocoins are so complicated to understand that only
the creators know how they work.

I'm mind blown by the fact that none of these new-cryptocoins are getting
hacked - there's an enormous bounty out there for who's able to figure out how
to double-spend these things! How's it possible that they all work well, but
are based on different principles? My conclusion is that there are hackers
that are currently double-spending to their advantage: without telling anybody
and without making it clear that it's happening.

Also, the whole idea of "scarcity" (which was my main attraction to this
field) doesn't exist anymore because of forks: if a group of people decides to
fork the software, your coins are duplicated and aren't scarce anymore, so
it's not even like gold anymore.

Sometimes I wonder if we'd be better off without a blockchain, and instead
with a system where we trust lots of big entities to record the ledger in a
way that still allows us to get some level of freedom-of-use, anonymity,
censorship-resistance and anybody-can-enter kind of system.

~~~
ThomPete
Scarcity still exists because the fork creates another coin than the original
but a fork. Keep in mind that scarcity is due to trackability (history).

~~~
empath75
Scarcity doesn’t exist because anyone can start their own blockchain and
pretty much anyone who can has. There’s nothing preventing anyone from
relaunching an exact duplicate of bitcoin with all of its strengths and
weaknesses at any time other than inertia.

~~~
ThomPete
You are missing the point here. It's about the history of the individual coin
not about the technical properties of coin in itself.

You can build as many cryptocurrencies as you want to. They aren't bitcoin as
they don't have the history of bitcoin which means that they aren't the same.

Only bitcoin is bitcoin, because only bitcoins has the history they have.

~~~
ufo
Bitcoin forks like Bitcoin Cash and Bitcoin Gold use the same block chain
history as Bitcoin.

~~~
ThomPete
You are also missing the point here. You can't get the same for bitcoin cash
as you can for a bitcoin. So no they don't use or have the same history after
the fork and they aren't the same which is why one is 4 times more worth than
the other.

~~~
ufo
Of course you cant get the same for them! It is expected that a fork that
creates new coins out of thin air will lead to cheaper coins.

~~~
ThomPete
And so scarcity still exists which was the original point I made and which was
being challenged.

Each coin has a unique history. You can create as many forks of bitcoin as you
want it doesn't change the fact that there is only one bitcoin.

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SamPatt
A decentralized marketplace based on cryptocurrency already exists and has
thousands of users right now. It's called OpenBazaar.

~~~
gitgud
Another big decentralized exchange is BISQ

[https://bisq.network/](https://bisq.network/)

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protomikron
Ok, maybe I missed something, but can someone explain to me why a
decentralized marketplace is an important thing to have?

Apart from the fact that you can pay there with Bitcoin (which you can also do
at other e-commerce stores), it seems similar to Shopify from a merchant's (or
vendor in OB slang) perspective.

So I get that makes it simpler to use for products that are not simple to get
otherwise (e.g. drugs), because of censorship and outdated governing (I know
you can in theory buy and sell anything, but I just downloaded it and searched
around and most products were either tests products, or drugs and sex-
related), but I don't see what other benefits there are.

I mean most people who want to _sell_ stuff over the internet struggle with
the fact that nobody wants to actually _buy_ their stuff - the fees or monthly
costs don't seem to be the reason for the failure of these shops. Furthermore
I would guess most people go to a central place like Amazon, because they have
some kind of reputation (although expectations are getting lower) and their
support ("where's my package") is quite OK (from a customer's perspective) -
although the customers _could_ go to small indie shops and buy stuff there.

Outside of products and services that are illegal to sell or buy because of
jurisdictions (if these jurisdictions make sense is an orthogonal question I
would say) what is the additional benefit for buyers and sellers?

~~~
nora4
The logic is usually that decentralized system allow greater innovation,
faster development, third-party integration. By taking no centralized control,
allowing everyone be partly owner of the network, they will have much greater
network effect than the centralized counterparts. The analogy is usually the
free internet vs proprietary CompuServe, AOL, Prodigy systems.

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jvdizz
For a community of technology enthusiasts, it's surprising to see the amount
of misconceptions people here have about blockchain, as it pertains to
cryptocurrencies, as well as general angst towards a new technology with a ton
of future potential.

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SubiculumCode
A decentralized marketplace could avoid the problems with near-monopolies like
Amazon because the cost overhead on transactions could be made minimal. The
problem is that in order to not become the black market like OpenBazaar, the
decentralized market would need to be able to comply with local and regional
laws and regulation; laws and regulations which change over time. That is a
tall order, and in not easily reconcilable with decentralization.

~~~
zeptomu
How does a decentralized marketplace make transaction fees minimal? Currently
transaction fees are the hot topic and seem exorbitantly high.

I guess both customers and merchants want to buy or sell stuff and not read
about things like the lightning network.

~~~
SubiculumCode
You could be right, but I was mostly referring to the Amazon take.

