Ever since the arrival of online marketplaces like Amazon, eBay and more, buying and selling goods took a new perspective, bringing in a great experience for shoppers. Disrupting this amazingly performing market comes to the amendment called Blockchain. The Blockchain technology is being widely implemented in almost all areas of growth and this has now also set its foot in the digital marketplace.
Did you know? a Blockchain Marketplace is a decentralized end-to-end network which directly connects the producers, sellers and the consumers. It removes the need for mediators while making a purchase and it also promotes transparency. Did it sound any different from the promises that a normal digital marketplace ideally makes? Not Really. But the key features listed below explains why the adaptation of blockchain is actually a good idea.
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[item title=”Why should you start a blockchain powered digital marketplace?“]
It’s the idea that anyone should start selling their products instantly without the barrier of a huge initial investment made digital marketplace a success. Each year a certain percentage of traditional brick and mortar businesses around the world are going online to grow their sales. Blockchain-based digital marketplaces are no different where users can visit your site on a browser, browse through the products and make a purchase. The difference, however, lies in the underlying technology that offers scalability and purchase protection to the buyer and the seller where each purchase is secured by a smart contract. At this point in time, a large number of people are open to purchasing goods, both digital and physical through digital marketplaces. You already have ever growing customers base. [/item]
[item title=”How does Blockchain powered digital Marketplace make money?“]
Digital transactions are prone to disputes no matter how well organized or transparent the process is. Blockchain has a solution to these surprises too, and they are the Smart contracts. Smart contracts help resolve disputes and it basically has two modes of operation.
The first way to overcome disputes is using Smart Contracts bundled with Escrow Accounts. Upon agreement with the contract terms, the consumer initiates a purchase with the Seller by making payment for the goods/services to be received. This payment made is held in escrow accounts which will release the funds only after the consumer receives the product and also only if the consumer is happy with what was purchased. An unhappy customer is given the rights to request a refund and this action sometimes angers the seller because to them it is unfair and is likely breaching the contract.
Smart Contracts and a Trusted Third Party mechanism was created to play fair even with the sellers as the refund privileges given to the end users irked their spirit and also discouraged business growth. In this method, a trusted third party is introduced into the transaction that holds the keys to an encrypted agreement that took place between the producer/seller and the consumer. This third party gains authority to decrypt and access the communication in case of any disputes. The third party is trusted to enforce justice, a resolution. Here, a third party can be any individual taking part in the transaction or the marketplace owner itself.[/item]
[item title=”What are the Features?“]
- Decentralized Architecture
Transactions done over a distributed and decentralized network is transparent and secure. It also has an advantage of round the clock support as the peers can/are spread all over the world. Costs involved to maintain a central host can also be avoided in a decentralized environment
- Payment and Charges
Payments are done over the blockchain uses cryptocurrency or some native tokens and it also imposes fewer fees comparatively. Blockchain attracts providers with low fees and this in-turn reflects the product prices which obviously becomes less. Additionally, payments can be quickly and easily done because it doesn’t require any third party or a financial institution to approve transactions and check for its authenticity. Businesses made in the traditional online marketplace involve risks and high processing fees which can sometimes be hidden too
The Blockchain style of operation helps bridge the gap between the service providers and the consumers. This promotes transparency and the direct feedbacks can encourage quality business
- Information Security and Privacy
Data inside a blockchain ledger cannot be tampered with and hence this ensures security. Information gathering or sharing is not applicable for transactions over an already established network of nodes (peers), thus privacy is maintained
- Flexibility to All
Producers need not pay to host their products in the marketplace until the same is purchased. Sellers are free to choose which products they wish to sell or in what way their product promotions are styled. Consumers enjoy the liberty of choosing from a wide variety of different products available, and at a best attractive deal
- Irreversible Transactions and Unbreakable Agreements
Transactions over a blockchain network are irreversible and the agreements regulating the purchase are smart contracts which are untameable. But when it comes to normal digital market purchases, it involves a third party to formulate agreements and contracts which are subject to changes if required[/item]
Frequently Asked Questions (FAQs)
[item title=”What is Blockchain?“]
The blockchain is a network of nodes (devices with an internet connection). It is a distributed and decentralized ledger technology which was re-introduced to support transactions of a digital asset called Bitcoin cryptocurrency. Now blockchain is used by many industries to implement their online businesses on a trust network like blockchain which keeps track of every single transaction and thus will eliminate redundancy, double-spending or duplication.[/item]
[item title=”What are Smart Contracts? When and Why are these prominently used?“]
Smart Contracts are self-executing contracts, these are programs (code) which when executed will check for pre-set contract clauses to be met.
On successful acceptance of the agreement terms, the service/ product will be provided to the customer. Smart contracts can be used when transferring anything of value over the blockchain network, such as money, property, shares and more. Smart Contracts hence avoids the conflicting and time-consuming middlemen services.[/item]