There are a handful of names that are practically synonymous with e-commerce, but all of the mainstream platforms come with strings attached – which is why we think there’s a big potential market for BitBoost.
There are already a number of well-established e-commerce platforms and payment processing services, most notably Amazon and eBay, which also bought PayPal back in 2002. These have significant network effect and will not easily be unseated from their place at the top of the pile (Amazon was in the top 10 Google searches for 2017, to give an idea of its ubiquitous web presence). And yet, e-commerce as it currently exists has many drawbacks. BitBoost’s marketplace aims to address the most serious of these with a blockchain-based platform on which buyers and sellers can interact directly. So what, exactly, can BitBoost offer than conventional e-commerce cannot?
One of the biggest problems with mainstream e-commerce platforms is the fees. Many consumers will be unaware of these, since they are hidden from buyers. For sellers, though, it’s a different matter. Fees are how e-commerce sites make their profits, but the commissions can be punitively high – up to 20 percent, in some cases, and often well into double figures depending on the product. This represents a real problem for small businesses, who have their own websites and sell direct to customers but who need the exposure of a large marketplace in order to reach a wider audience. The high commission fees erode the benefits of accessing more customers, but there is very little choice in it for businesses.
Additionally, there are charges associated with credit card fees. These can also be relatively high, and are a particular problem for high-turnover, low-margin businesses. Again, their impact is generally hidden from the buyer.
BitBoost’s platform will not charge any fees for users, beyond the small fees paid by sellers after a successful sale (there are no up-front listing fees; the cost to the seller is 0.9% of the price of the item sold, or a flat fee of $0.10 USD if the price is under $10). Additionally, there are almost no charges associated with payments. Transaction fees on the Ethereum network are very low compared to credit card companies and international payments via the banking system. The overall savings can be shared by buyers and sellers, with cheaper prices and higher profit margins.
Centralised platforms like eBay and Amazon always require users to register and log in, typically with an email address and usually far more extensive information about themselves. This personal information is used and abused in a variety of ways. Aside from being the basis of the ads you receive (along with other browsing data), it may be shared with third parties, used for wider marketing, sold or stolen by hackers.
The only way for an e-commerce platform to keep personal data safe is not to collect it in the first place. BitBoost’s app can be used without any registration or personal information at all being shared. All that is required is an Ethereum address, which can be created when the user first accesses the platform. Crypto addresses are pseudonymous, and when used carefully there is no easy way to trace them to a real-world identity. In fact, buyers can use a separate address every time, if they want. They can also use their own Ethereum node to broadcast transactions, should they wish. This ensures a high degree of privacy when using the marketplace.
Online marketplaces mediate every relationship between buyer and seller. They enable buyers to find (or not find) certain stores; they handle communication between them, with oversight of every message sent; they manage payment, taking a fee; and they handle any arbitration necessary in the case of a dispute, which is often resolved without a full understanding or appreciation of the circumstances. The software itself is hosted on a centralised server, so from time to time it may simply be inaccessible and users cannot open their accounts. Alternatively, if an account is suspended for one reason or another, there is little the user can do. They are forced to wait while the platform administrators go through their policies and processes – and there is no guarantee an account will be reopened at all.
BitBoost’s marketplace ensures direct contact between buyers and sellers at every stage. There is no unnecessary moderation, mediation or interference. Escrow ensures safe payments without intruding into the process, and the only time a third party is introduced is in the case of a dispute, when arbitration is necessary. Because it runs on the blockchain and uses smart contracts, there is no downtime, and accounts cannot be closed – there is no central authority who can block accounts.
Effective protection for buyers and sellers
BitBoost features escrow for payments and arbitration by a third party in the case of a dispute. The arbiter is independent, agreed by both buyer and seller, and is not a representative of BitBoost or the platform. This removes the conflict of interests that exists with mainstream e-commerce platforms. eBay, for example, is notorious for siding with the customer in the case of a dispute, because their business model is predicated on attracting as many buyers as possible to the platform. Thus sellers may unfairly be hit with chargebacks if a customer fraudulently claims that an item never arrived, and has their payment reversed.
Growing network effect
BitBoost isn’t exactly starting from scratch in terms of its user base, thanks to its existing token sale community, but the plan is to bootstrap adoption with a series of merchant partners. This will help build network effect quickly. We also anticipate that the marketplace will appeal to particular demographics, including the crypto community in general, the large Ethereum community more specifically, and those who struggle to access traditional e-commerce platforms for one reason or another, perhaps due to their location or available banking facilities.
BitBoost’s marketplace is the first of its kind: a decentralised platform where buyers and sellers can meet directly and conduct e-commerce. The peer-to-peer approach is fundamentally different to conventional e-commerce solutions like Amazon, eBay and PayPal, and there are good reasons why users would want to opt for BitBoost rather than one of the mainstream platforms. Chief amongst these are the low fees, lack of intervention, privacy, and direct access to customers for sellers. There is no unnecessary mediation, just free trade for anyone who wants it.