Simard chief executive Don Birch highlights ‘three key benefits and two pieces of magic’
Guest Post: Decentralised marketplaces - what’s all the fuss about?
These days, people ask me What is so special about Decentralised Marketplaces? What makes them any different from the Central markets that we all use everyday.
Enabled by Web3 distributed ledger technologies, or blockchain to you and me, decentralised markets are first and foremost ‘permissionless’, which means anybody or any entity with the right credentials can become a user. Any Supplier who wants to sell or any Buyer who wants to buy.
Decentralised marketplaces are self-governing and have no controlling authority. To be more accurate, they are governed by their communities, much in the same way as common land is managed in the traditional English village ~ the ‘Commons’. This is of course where fairs or markets were held as long as 700 - 800 years ago. Like so many things in life, we have come the full circle.
In layman’s terms decentralised means no intermediary to collect market rents, no owner to decide whether you can join or not, no single controller to impose their self-serving marketplace rules.
Decentralised marketplace relationships are peer2peer, buyer2seller and if desired, uniquely tailored for each transaction. This is made possible by so-called Smart Contracts, another feature of blockchain. Smart Contracts are nothing more than self executing programmes that are designed to transact when certain conditions are (or are not) fulfilled. Selling and owning property is making big strides with this tool, but that is another story.
For those of you who work in travel distribution, all this mumbo jumbo means three key benefits and two pieces of magic
- In an Open marketplace, there are no intermediation fees or commissions:
a. This is serious news in particular for hotels, ground transport, tours & activities
- Every transaction is personal. Transact what you need, not a standard bundle ~ reserve that room with the walk-in shower, or secure carparking and forget the telephone call to the front desk
- Both buyer and seller own the same single data record:
a. Buyers can verify that they have received all contract features
b. There is no need for journey reconciliation as both parties have the same story
- Network effect:
a. Once connected to the Marketplace any buyer can transact with any seller, so you benefit from connections initiated by others and they benefit from connections generated by you. No more laborious and time consuming one on one API integrations
- Migration not big bang:
Following the runaway success of Decentralised Financial (bye bye unreasonable bank fees, bye bye days to transfer money), new decentralised markets are now emerging in sectors all over the economy and travel is no exception.
Starting initially with Corporate travel, we can expect this new freedom to work its’ way into the leisure travel market in the months and years ahead, giving the traveller more choice and better value.
Welcome to Travel3 ~ enjoy the journey