5miles, a top e-commerce marketplace in the USA, has started to migrate and record its operational data, including new product listings and anonymized reviews, onto the CyberMiles public blockchain. It is the first step toward the vision of decentralized e-commerce. Eventually, the entire 5miles marketplace, with over 15 million users in the USA alone and $100+ billion USD in GMV, will operate as a Decentralized Autonomous Organization (DAO) on the CyberMiles public blockchain.
5miles’ data on the CyberMiles public blockchain can be readily viewed via the 5miles Data DApp in the CMT Wallet. If you know the listing ID, you can easily view the corresponding data and images in the DApp, hence bridging the closed 5miles database to the open CyberMiles public blockchain. If you do not know any particular listing ID, the DApp lists 10 significant milestone listings during 5miles history for casual visitors to learn about 5miles.
The very first applications of cryptocurrency are all in e-commerce, when early adopters used Bitcoins to buy food and products from the Internet. In recent years, “Shop to earn crypto” has been a popular tactic to attract buyers to newer, less-well-known shopping websites. Blockchain applications in e-commerce now ranges from tracing product origins / authenticity, to making cross-border payments.
Dr. Lucas Lu, founder of CyberMiles, envisions that the blockchain transformation of e-commerce will occur in three stages.
First, cryptocurrency enables a decentralized incentive mechanism, encouraging users to take ownership and participate in the development of the marketplace. Take the shop-to-earn-crypto tactic because of the expensive users acquisition: all user actions such as browsing, clicking “like”, writing reviews, etc. can earn the user certain amounts of points (or tokens). Blockchain technology makes this token incentivization transparent, preventing random points inflation and unfair play. At the same time, blockchain tokens can be applied across platforms.
Second, using cryptocurrency for payments is a widely-recognized use case. JP Morgan, for example, recently announced that it will use cryptocurrency for instant settlement between institutional customers, thereby addressing systemic issues such as foreign exchange controls that, in turn, can improve efficiency and increase cost-savings. CyberMiles has partnered with cross-border e-commerce companies, Blocktonic and LightInTheBox (NYSE:LITB), both accepting CyberMiles Token (CMT) payments.
Third, decentralizing e-commerce organizations is the most complex, exciting and truly in line with the spirit of blockchain technology. Anyone can buy and sell things freely, while users have privacy protections and not only can control but also monetize their own data. There are no “middlemen” or undue fees within the marketplace, thus lowering the prices of products today.
However, the paths to those goals are full of challenges – both technical and economical. As a public blockchain optimized for e-commerce, CyberMiles’ goal is to address these challenges head-on and foster a truly decentralized e-commerce ecosystem.
The Horror Show—and Glory Days—of Silk Road, Open Bazaar
Building free, as in freedom, e-commerce marketplaces is a long-held dream of the technolibertarian community since early days of the Bitcoin. Before CyberMiles, the (in)famous Silk Road, as well as Open Bazaar and other crypto projects have blazed the trails.
Silk Road, a notorious, now-defunct black market is an early Bitcoin-based e-commerce marketplace. Buyers and sellers on Silk Road were able to connect with each other covertly, trading drugs, firearms, counterfeit dollars, and much more while evading government regulators. Silk Road was designed and optimized for black market buyers and sellers, as users could not access it with traditional online search engines but rather via special software known as the dark web. It was a completely underground website. The Silk Road marketplace earned $1.2 billion in two years before it was shutdown by the government. There is proven demand for a free marketplace, although the Silk Road approch is mis-guided.
Next, enter Open Bazaar, a more recent and legal iteration of decentralized e-commerce funded by Venture Capitalists. The peer-to-peer, direct-trade model renders middlemen obsolete. Initially, Open Bazaar only allowed Bitcoin payments, but has a self-governance model that stayed on the legal side of the trade. Internet users could search any product on Open Bazaar via a simple search engine provided by its partner, Bazaar Bay.
While Open Bazaar utilizes Bitcoin for payment transactions, it does not use blockchain for its peer-to-peer infrastrcture. The homegrown infrastructure means that it cannot take advantage of the fast development of blockchain technology in recent years. All Open Bazaar users must install its desktop PC software first. The user experience is iffy, and it can be difficult for buyers and sellers to complete a deal. This is one of the primary hinderances to further development-and mainstream adoption-of it.
A recent review of Open Bazaar
A Better Solution for E-Commerce Has Arrived
Since 2017-18, blockchain technology has become a household name. Meanwhile, investment in research and development of blockchain technology marches on, despite a dip in cryptocurrency prices. Bear market or not, blockchain technology continues to develop rapidly. With a global market size of $1+ trillion, e-commerce is widely seen as an important area of application for this technology.
CyberMiles has built blockchain infrastructure components that are optimized for e-commerce applications, such as a high performance Ethereum-compatible virtual machine, a safe smart contract programming language called Lity, crypto payment gatways, a smart contract search engine, among many other features.
With 5miles’ data migration onto its blockchain, CyberMiles makes the first step in creating a Decentralized Autonomous Organization (DAO) for e-commerce.
How does this work? For starters, a seller can list items for sale on the CyberMiles public blockchain by deploying a standard smart contract template. A Decentralized Application (a web application known as a DApp) provides one-click deployment of such smart contracts on-chain. A buyer can browse and search all listed items via search engine providers in the DAO, use cryptocurrency to pay sellers directly or through an automated escrow, resolve potential conflicts by engaging in other DAO members anonymously, and thus complete decentralized trading.
With real-time payments, automated and transparent escrow, no fees, decentralized arbitration and more, the blockchain DAO is particularly well-suited for peer-to-peer marketplace activities. But how is this different from Silk Road? In our case, product listings are open and transparent, and can be searched by anyone through search engines, which is exactly the opposite of the dark web.
CyberMiles’s goal is to “shine a light into the darkness” through a DAO. Organizationally, a DAO’s self-governed community is key as rules are pre-determined by blockchain-based smart contracts. Community members ensure self-governance, with everyone playing a part in maintaining the marketplace.
In the event that a buyer feels a particular product is not appropriate and should be removed, he or she can report the listing to the arbitration and mediation arm of the DAO through a DApp. The arbitration DAO smart contract automatically and randomly selects a committee of arbiters. These arbiters will evaluate and determine whether a product should or should not be available on the marketplace. Unapproved items will be removed automatically by rules in the smart contracts. (The same principle applies to trading disputes that may arise.)
Will the decentralized trading platform envisioned by CyberMiles be the “good guys” alternative to the dark web? That is up to the community members to decide. However, Dr. Lucas Lu, the founder of CyberMiles, feels optimistic. “We apply community autonomy and, I believe, most users are rational and objective.”
From the (thankfully) bygone days of Silk Road, to the public blockchain designed for e-commerce, and the community-owned blockchain DAO, blockchain technology may not replace centralized e-commerce like Alibaba or Amazon immediately. But, given $100 billion USD per year market size for peer-to-peer e-commerce, it is one of the most promising applications for blockchain technology.
The blockchain technology can-and will-make the world a better place.
*Download CMT Wallet to browse the 5miles producets in the 5miles data DApp.