Amazon vs OpenBazaar
Just a thought. Would Souq.com (the leading Middle Eastern online marketplace) become obsolete if its blockchain peer OpenBazaar eventually delivered on its promises many years from today? Probably yes. We find the economic premise of blockchain ecosystems to be this: replace (centralized) firms with (decentralised) marketplaces. Historically, the former are needed to enable market participants to overcome the inefficiencies of traditional marketplaces (logistics, payments etc). What if market participants can now transact directly using code as a means of trust? What if this code is open-sourced and enhanced by a crowd of developers? And what if the market participants have a stake (token) in that ecosystem? Well, the rent extracted by the firm would return to the marketplace. OpenBazaar does exactly that and charges zero fees. Transactions are built as “Ricardian contracts”; each step of a trade is cryptographically signed with escrow payment arrangements; payment is released upon multi-signatures by the transacting parties and reputable moderators who are remunerated to resolve disputes. Put simply, the market no longer needs the firm as long as it can appropriate its IT department. Brilliant.