Web3: Decentralize Shopping

When now that major retailers are in control. This is true for both the physical and online world. E-commerce is growing, topping $8.8 billion. We all know the names like Amazon and Alibaba.

Here is where we encounter a major problem.

Companies that are selling on these platforms are completely at the mercy of these major entities. Couple that with the control Google and Apple exert over anything done on mobile and we quickly see how this is a centralized system which has extractors at every level. This cuts into the profits of the sellers while adding cost to the buyers.

Just look at Apple charging 30% fee on anything purchased on it store.

It is why we need to set up decentralized systems.

Source

Extractors

Few take the time to think about all the different entities involved in a transactions. This is true whether we are discussing commerce or finance.

With the latter, people seem to think the returns people get based upon the present system is where the Web3 world should be. The idea that 20% is unsustainable is based upon a grounding in what is "normal" within the existing system. What is overlooked is all the extractors that are amounting to multiple percent.

The same is true with commerce. While Apple's cut is extreme, it is not the only one in the process.

For example, Visa and Mastercard charge merchants a certain percentage of every sale. The same goes for PayPal. These entities are pulling in billions in revenues. The .5%-3% fees really add up.

Then we have to add in fees. These do not seem like much but, again, over time, when spread across the entire system, it is billions. All of this is before we get to the banks, who naturally have their hands out.

Anything to do with finance has extractors. That is the system. These entities have inserted themselves in positions where they are now cemented in. Commerce is tied to this since, of course, there are financial transactions involved.

Lack of Brand Control

When dealing with major corporations, they are in control. This is a major challenge when you have a company that is dependent upon brand positioning.

There are two levels to this problem.

The first is the inability of entities such as Apple or Google to be accurate. They are dealing with millions of products floating through their networks, hence making it impossible to get everything right.

On top of this, we have the likes of Amazon which is known for its basic abuse of those selling on the platform. It doesn't take much time with a search engine to find horror stories. The company is also known to compete with its sellers by promoting its products first. As stated on a number of occasions, the review and comment system is on their platform, subject to total manipulation.

All of this makes it near impossible for a seller to control the brand being presented. These entities are at the mercy of Amazon, how it wants to present them.

One bot running through leaving terrible comment or manipulating the voting can ruin the reputation of a company immediately.

All of this omits how the algorithms work. Facebook is known for destroying the sales of companies simply by changing that. Again, we can find a large number of stories where an entities lost 90% of their traffic overnight due to this change.

Changing Ownership

The major challenge is when you are on a platform, you are at the mercy of the company behind it. No matter who that is, or how benevolent it might be, you obey. Your interests come secondary to the platform's.

Ultimately, one has to question what he or she owns. The concept of brand really exemplifies this. How can a company proclaim to be in control of its own brand when the likes of Amazon can completely alter that in a heartbeat? The reality is that it cannot.

Web3 is all about ownership. We see this happening in the financial but it actually extends much wider. The basic premise starts with information. On Web3 platforms, the information is housed on a decentralized, public database. That changes things completely.

There is also transparency. Here is where we see the second layer of operation. With centralized platforms, a lot takes place "behind closed doors". Few decisions are publicly discussed. Instead, people simply receive a pop up telling them to agree to the new TOS.

Finally, all incentives are aligned for the platforms. In other words, everything being done is to their benefit, first and foremost. All else is secondary, including the user and merchants.

Web3 flips this model on its ear. This begins with the idea of =network ownership. If we use this as the starting point, we immediately separate ourselves from Amazon, Facebook, and X. Those networks are not owned by the users. With Web3, there is stake in the network, which means added incentive.

Next up is the platforms or applications. They can also be structured where the users have stake although it is not necessary. Either way, there is a great deal more control since all data is open to anyone. If one does not like a particular platform, or it is not serving the public, it can be altered.

Decentralized Shopping

The big advantage to Amazon is that it is the go to location. This is no different than the idea of the shopping mall in the past. They became popular because one could simply park and find most of what was needed.

We saw this idea expanded with the likes of Walmart. That entity was designed to put as much under one roof as possible. Amazon is really just a digital representation of that.

Here is where the change will take place.

Instead of heading to a site, people will be focusing upon their favorite network. Again, the future of Web3 is abundant networks. People are going to have lots of choices.

That means the focus will be on the services that are provided. When it comes to commerce, this means establishing applications that serve the needs of the users AND merchants. Removing the intermediary is crucial to this process.

As noted in this article about Amazon, it provides the model to follow. That does not mean the company is supported. Instead, we are referring to the effectiveness of building something that became one of the silos of the Internet.

Web3 is best served by mimicking that, at least to start. From that point, we can expand the areas of penetrating, bringing more utility to each network that adopts this concept.

For now, a primary focus should be commerce. Shopping is big business and is in dire need of decentralization.

---

What is Hive

Posted Using InLeo Alpha