Decentralization is not a luxury. It is a necessity. In an insightful article in The Atlantic in 2012, science fiction author Bruce Sterling described companies like Amazon, Facebook, and Google as “heaps,” and predicted a subtle upheaval that had occurred over the past decade. As tech giants spend more and more of our lives, it’s not just reassuring that the technologies that enable us to encounter them are reassuring: they are very important.
Since Bitcoin (BTC) began the process of decentralizing payments in 2010, we have seen how de-brokerage works in many sectors, from decentralized identification and digital asset management to gaming markets and decentralized forecasting.
However, there is one sector in which it has not yet been possible to free itself from the grip of monopoly power: the world of commerce. Registering physical assets on the blockchain has been feasible for some time, but it alone has not been sufficient for a fully decentralized trading system to emerge.
Why do we need this so much? Isn’t it, as it has been evident during the COVID-19 pandemic, that the current trade system, run by central enterprises, actually meets our needs? Now we’re used to the idea that we can order something online and have it delivered the next day or even the same day. If something is wrong with your purchase, we can have reasonable confidence that the issue will be resolved by a company that brings buyers and sellers together.
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Sometimes it is difficult to imagine exactly how the next iteration of technology will improve our lives, especially if the current technology appears to be working properly. We’ve all heard Henry Ford’s quote on “Faster Horses,” and not many began to realize just how inefficient and profitable the ancient financial markets were with Bitcoin – and later the decentralized economic ecosystem.
The advent of decentralized Web 3.0 networks is possibly one of the most powerful meta-innovations in human history. Not only does this technology have the potential to increase innovation, but it can also accelerate the pace of technological development and economic growth to the extent that we fundamentally solve the innovation problem. This will lead to the superstructure transition to a post-scarcity and post-capitalist crypto-economy, while eliminating the negative externalities that threaten species.
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So what are the benefits of a decentralized trading system? Indeed, large, ancient human labor systems are the enemies of innovation and progress. Centralization can lead to systemic bottlenecks and shortcomings, while top-down management means that many exciting new ideas never come out of a vacuum.
Opening up these business lines by offering the same tools, data and features to sellers of all sizes currently available only to a subset of the largest and most privileged groups, it also makes it possible to offer a range of products, services and payment methods. As quality reviews and recommendations that are difficult to imagine today. Decentralized value chains are more efficient in nature because value moves freely in such a system without the need to redirect resources to rent-seeking middlemen.
If this is a vision, what are the practical needs of such a system? A fully functional decentralized commerce network, or e-commerce network, should provide automated mechanisms to replace the centralized transaction coordination and web 3.0-based data marketplace to replace the accumulation of data.
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When it comes to coordinating transactions, the current decentralized systems can eliminate middlemen and the need to rely on third parties, but for a fee by introducing some kind of arbitration, which will lead to cost and complexity. These costs may mean that transactions under $ 100 violate the business model, as arbitration fees cannot be reduced below a certain threshold. The problem of decentralized protocols is how to coordinate trade between buyers and sellers in a way that decentralizes trust, but reduces arbitrage, with all its external factors, so that trade can be effectively automated.
Thanks to innovations in this area, transactions can be executed using coupons with non-innate tokens, thus effectively converting them into futures contracts that reduce the need for human arbitrage and provide seamless integration with the rest of the Web 3.0 ecosystem. Imagine a world where you could go to a store in Decentraland and buy a custom board or guitar delivered to your doorstep in real life, or where the littlest vendor could compete at a Lifan level.