How can Distributed Ledger Technology improve peer-to-peer marketplace platforms?

  • Security,
  • Privacy,
  • High fees,
  • Trust, and fraud.

Smart Contracts

Smart contracts are self-executing contracts. These contracts are only executed once all the conditions of the contract have been met. The terms of the agreement are written into lines of code, so, the application of smart contracts to marketplace platforms is extremely beneficial for both the buyer and seller; because they facilitate transactions/purchases with an added layer of security. Additionally, smart contracts authorize transactions without any need for an external enforcement mechanism such as a central authority or legal entity. In this way, transactions facilitated by smart contracts are immutable, traceable and transparent.

Lower fees and lower costs

No third parties involved in the transaction process which means lower fees for both the buyer and the seller. Sellers can position themselves more competitively within the marketplace because their bottom line is not affected by high payment processing transaction fees. This means that sellers can benefit from higher profit margins on each sale. Buyers can bene t from a market which is more competitively priced overall, allowing them to purchase the best products at the best price.

Providing more decentralization and value creation

DLT increases decentralization and connectivity between participants. The more people who can be directly connected means an increase in the opportunity to share value. As such, connectivity is the key to increasing significant access to value creation. DLT maximizes the number of participants in the sharing economy because it makes transacting with others more direct and simple, all at a lower cost. Currently, there are about 1.7 billion people around the world who have been excluded from the modern financial system. DLT has the unique ability to include the huge number of people who do not have access to banks or credit cards and therefore cannot currently participate in the modern financial system.

Increasing levels of trust

DLT has often been referred to as the ’Trust Protocol’. This is because the technology provides a more efficient, quicker and secure way to establish trust and verify data/information. In a peer-to-peer marketplace, it means that participants can verify a user is who they say they are and verify proof of ownership of goods/products. This can help mitigate fraud and increase trust between users within the network.

Improved security

Due to the decentralized nature of DTL, it means that there is no central point of attack for hackers or malicious network actors. A copy of the ledger is distributed across each node within the network which means that in order to hack the network over 51% of the nodes need to be hacked at the same time, which is virtually impossible. Similarly, the complex cryptographic hash functions mean that the odds of guessing someone’s private key in order to steal funds is the same as winning the Powerball (lottery) 9 times in a row. Finally, DLT encrypts users data so that their sensitive information is not compromised.

Instant Transactions/Settlement

DLT allows any anyone with an internet connection to transact directly and instantaneously. Settlement time using traditional at can take days and even weeks for a transaction to be processed and cleared. DLT allows the seller to receives the true value of the sale right away.

Cartam

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Magna Numeris

Magna Numeris

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Magna Numeris is a startup developing solutions for cryptocurrency users, pushing the boundaries of conventional platforms to help grow the peer-to-peer economy