Two-Sided Marketplaces And The Blockchain
Two-sided marketplaces and the blockchain
The emergence and evolution of blockchain technology offers viable solutions to the challenges of online platforms and marketplaces. Marketplace pain points include delayed transactions due to the verification of funds or authenticating users with a third-party, such as a clearing house or infrastructure weaknesses. These solutions will bring new marketplace opportunities that will not only deeply impact payments and trust, but stand to disrupt existing business models as well. Here’s how.
Blockchain Technology’s Impact on Payments and Trust
Establishing trust is a crucial part of driving online platforms and marketplaces. However, trust is difficult to establish with marketplaces’ overly simplistic business models with small or stacks of interaction—think of Craigslist, where buyers and sellers are connected through an online platform, but have no history of buyer or seller transaction ratings or reviews. However, blockchain technology opts to offer a bridge for establishing trust by utilizing a decentralized system of end user data. This provides an opportunity for FinTech companies to disrupt existing businesses as well. For example, marketplaces that use cryptocurrency, such as BitCoin, can harness the power of blockchain technology to save time and verify if funds are available right away rather than wait on answers from decentralized banks that can take days to verify the availability of funds. Moreover, blockchain technology can bring power back into the hands of the users by decentralized payment systems.
Disrupting Existing Business Models
While the adoption of blockchain technology still has a way to go, innovative companies that embrace it are set to disrupt existing business models. Blockchain technology can bring forth marketplaces founded on the technology. Businesses can also utilize the technology to create better efficiency within their enterprises. For example, blockchain technology can be used in logistics marketplaces to help drive the verification of transactions forward. This is vital for logistics marketplaces as blockchain technology is set to impact these online platforms next.
Implementing blockchain technology in your business strategy can help you innovate your business to stay ahead of your competitors by leveraging a network of trusted users to automate transactions.