Decentralization is not a luxury. This is a necessity. In a forward-looking article in The Atlantic in 2012, science fiction writer Bruce Stirling called Amazon, Facebook, and Google “stacks” and predicted a malicious takeover that has taken place over the past decade. As tech giants spend more and more of our lives, the fact that the technologies that enable us to deal with them are not only reassuring: they are important.
Since Bitcoin (BTC) began the process of decentralizing payments in 2010, we have seen brokerage canceled in many sectors, from decentralized identification and digital asset management to gaming markets and decentralized forecasts.
However, there is one sector in which it has so far been impossible to break free from the grip of monopoly power: the world of commerce. The registration of physical assets on the blockchain has been possible for some time, but this alone was not enough for the emergence of a fully decentralized trading system.
Why do we need this so much? Is the current trading system run by centralized firms no longer meeting our needs – as the COVID-19 pandemic has demonstrated? Now we are used to the idea that it is possible to order something online and deliver it the next day or even the same day. If there is anything wrong with your purchase, we can have reasonable confidence that the problem will be solved by a company that brings buyers and sellers together.
On the subject: How has the COVID-19 pandemic affected the crypto space? Experts answer
It is sometimes difficult to imagine how the next iteration of technology will improve our lives, especially if today’s technology seems to be working as it should. We’ve all heard Henry Ford’s quote about “faster horses,” and it wasn’t until Bitcoin – and then the decentralized economic ecosystem, how inefficient and inefficient the ancient financial markets were.
The advent of decentralized Web 3.0 networks is arguably one of the most powerful metainnovations in human history. This technology can not only increase the number of innovations, but also accelerate technological development and economic growth to such an extent that we will fundamentally solve the problem of innovation. This will lead to a supra-systemic transition to post-scarcity, post-capitalist cryptoeconomics in abundance, while eliminating negative externalities that threaten species.
Related: Multi-functional tokens for Web 3.0 activation, offering more than one cash equivalent
So what are the benefits of a decentralized trading system? The truth is that the great inherited systems of human action are the enemies of innovation and progress. Centralization can create systemic bottlenecks and flaws, while top-down management means many interesting new ideas don’t disappear from the drawing board.
Opening up these areas of organizations by offering merchants of all sizes the same tools, data, and capabilities that are currently only available to a subset of the largest and most unique groups allows offering a range of products, services and payment systems as well as “wisdom”. out of the crowd ”quality reviews and recommendations that are hard to imagine today. Decentralized value chains are inherently more efficient because in such a system value flows freely, without the need to redirect resources to rent seeking intermediaries.
If this is a vision, what are the practical imperatives of such a system? A fully functional decentralized trading network, or “digital commerce,” should provide automated mechanisms to replace centralized transaction coordination, and a data marketplace running on Web 3.0 to replace the data warehouse.
On the subject: How DeFi Can Improve the Ecommerce Sector
When it comes to coordinating transactions, current decentralized systems can eliminate intermediaries and the need to rely on third parties, but for a fee, by introducing a kind of arbitrage that leads to cost and friction. These costs can mean that transactions of less than $ 100 violate the business model as the arbitration fee cannot be reduced below a certain threshold. The problem with decentralizing protocols is how to coordinate trade between buyers and sellers in such a way that trust is decentralized, but reduces arbitrage, with all its external factors, so that trade can be effectively automated.
Thanks to innovations in this area, transactions can be made using coupons for non-perishable tokens, which effectively convert them into futures contracts, reducing the need for human arbitration and allowing seamless integration with the rest of the Web 3.0 ecosystem.