A blockchain marketplace for NFTs or a decentralized digital marketplace is an online exchange platform that connects sellers and consumers without the involvement of intermediaries.
Simplifying it, imagine a large shopping mall where there are many single-brand and multi-brand stores, and customers can freely browse and make purchases using a shared global currency.
As you continue reading this article, you will find information regarding:
- What blockchain-based marketplaces are and how they work;
- The main current crypto marketplaces;
- The steps to follow to open a blockchain marketplace.
What is a blockchain marketplace?
A definition of a blockchain marketplace is that of a Peer-to-Peer (P2P) buying and selling platform that allows the exchange of goods and services between sellers and customers without any intermediaries.
Generally, blockchain-based marketplaces are divided into two categories:
- Open: offering various types of goods;
- Closed: specializing in the sale of a specific NFT.
Furthermore, there is a tendency to further divide NFT marketplaces into:
- Primary: where goods and services are sold for the first time;
- Secondary: where previously sold digital products are made available to buyers again.
Similar to traditional e-commerce platforms, the purpose of a blockchain marketplace is to provide visibility to sellers of cryptographic tokens, while adhering to compliance standards.
- Respecting the rights of the seller and the terms of sale for non-fungible tokens;
- Observing post-sale rules;
- Safeguarding the rights of buyers and intellectual property.
Moreover, NFT trading platforms must guarantee:
- Comprehensive information to protect sellers and buyers;
- Transparency in data reporting while respecting privacy;
- Protection against external cyber attacks.
Blockchain marketplace vs Traditional marketplace
Understanding the difference between a blockchain marketplace and a traditional marketplace may seem simpler than you think. Keep in mind that these two online selling systems represent a generational leap in the Web. From the centralized Web 2 platforms to the decentralized blockchain and Web3.
A traditional online marketplace is centralized, meaning that the entire selling process is regulated by third parties. The sale and transactions go through intermediary platforms that always retain a percentage, making the operations costly for the seller.
Imagine having a vacation home or an apartment to rent out. So, you decide to use a platform like Airbnb. The site is a currently global marketplace that connects property owners with potential guests.
To actually rent out your property, both you and the person staying at your place have to take actions that involve the insertion and use of personal data.
Additionally, to receive payment from those who choose your property, you have to pay a percentage to the platform. Similarly, the guest will pay a fee to Airbnb in order to use the service.
In a centralized marketplace, transactions become costly, and intermediaries become powerful holders of sensitive data, putting the privacy of those who operate within it at risk. On the other hand, blockchain-based marketplaces are structured to avoid these two drawbacks.
In fact, in blockchain marketplace transactions, they are regulated by what are called smart contracts. These are digitally signed agreements between parties that can be accessed by everyone and are immutable. Only when the terms are approved by both parties, the transaction is concluded.
Furthermore, unlike traditional marketplaces, in decentralized markets, exchanges occur in cryptocurrencies, i.e., digital currencies. These cryptocurrencies have specific and very different characteristics compared to traditional currencies.
- They cannot be printed.
- They are not subject to any control by government authorities, but the entire network is involved in transactions.
- They are generally designed to be produced in a limited number (e.g., the maximum number of Bitcoins that can be generated is 21 million).
- They are not traceable to the owner’s personal data, and the owner remains anonymous.
- They are traceable and secure because each transaction is recorded in the blockchain’s ledger. Therefore, they are not modifiable, and fraud or scams are not possible.
- They are globally fungible.
- They enable fast and intermediary-free transactions.
4 Examples of Successful Blockchain Marketplaces
Ideas and projects in the world of decentralized marketplaces continue to grow day by day, thanks to continuous implementations and the introduction of new possibilities.
Therefore, I present to you a selection of well-known blockchain marketplaces that are worth paying attention to for those who follow and want to earn, trade, or operate in these types of markets.
Foundation is a platform that exists on the Ethereum blockchain. It serves as a creative playground for artists, curators, and collectors to explore the new creative economy. The platform’s goal is to:
- Allow investing in unique versions of digital artworks;
- Create personal collections;
- Sell or trade their artworks with other users.
Every time a collection is resold, the artist earns 10% of the sale.
Particl.com is a decentralized marketplace aimed at connecting producers and buyers without any intermediaries.
Participants can easily create their own “wallet” through which they can exchange products of all kinds, from small items to automobiles.
Payments are made using the non-traceable currency PART, created with the aim of protecting the privacy of participants operating in this marketplace.
Crypto.com is a cryptocurrency exchange app that offers various services. Among these is an NFT marketplace that has quickly become one of the most popular in the fields of art, gaming, sports, music, and more.
Unlike other decentralized marketplaces, purchases on Crypto.com can also be made using a simple credit or debit card. Each NFT is listed at a fixed price, or auctions can be conducted to offer flexibility to buyers and sellers.
OpenSea is the first and largest crypto marketplace specializing in NFTs. The platform is a pioneer in the field of blockchain marketplaces.
In addition to being a gallery of non-fungible tokens, it is also an NFT aggregator and is the most well-known platform for creating, selling, or purchasing NFTs.
In terms of usability, it is a very user-friendly platform that allows users to create an account and navigate without any specialized knowledge of the industry.
For creators of collections or NFTs, OpenSea offers a very simple automatic creation system that does not require coding. In OpenSea, exchanges can be conducted using various compatible cryptocurrencies such as ETH, KLAY, ASH, MANA.
How to Create a Blockchain Marketplace in 4 Steps
To launch a blockchain marketplace, there are specialized platforms like Origami or Zilliqa. These blockchain builders simplify the creation of a decentralized online marketplace in a few steps.
For example, Origami relies on the Ethereum blockchain and offers four working blocks that, once developed, allow a company to have its decentralized digital store.
Building a multi-seller marketplace based on Blockchain without prebuilt software is actually very complex. It undoubtedly requires a team with various specialized skills. However, by continuing to read, you will get an idea of how to do it in four steps.
1. Choose the Blockchain Platform
Each platform has its own peculiarities, so it’s important to choose the one that best suits your type of marketplace.
To be able to utilize smart contract system and make cryptocurrency transactions possible, however, it is necessary to rely on blockchain protocols.
Continuing with the reading, you will find a list of the most commonly used ones for building blockchain marketplaces in various commercial sectors.
Ethereum is a blockchain-based platform that uses its native currency Ether (ETH) for transactions, making it the second most widely used cryptocurrency in the digital world.
However, the blockchain on which Ethereum is based can support various cryptocurrencies and applications. That’s why it is currently the most popular platform for NFT transfers and the implementation of cryptoart marketplaces.
Keep in mind that Ethereum and Bitcoin differ in purpose: Ethereum’s main focus is on the functionality of smart contracts and the creation of decentralized apps, while Bitcoin aims to be an alternative to traditional currency.
Corda is an open-source platform based on blockchain technology, created in 2016 by the R3 banking consortium. This is a company that manages a network of about 200 banks, financial institutions, regulators, associations, and technology companies.
Corda’s technology was developed for and by the Finance world, particularly for interbank reconciliation, which involves verifying the matching activities between two different banks.
Tezos, like Ethereum, is an open-source blockchain platform created to develop and host decentralized applications and resources. Unlike Ethereum, in Tezos, all stakeholders are tasked with governing protocol upgrades.
Within Tezos, a native digital token called TEZ (or TEZZIE) is used. Given its highly adaptable nature, Tezos has been particularly adapted for NFT creation.
EOSIO is an open-source platform that enables third-party developers to create and run decentralized applications or Dapps. The cryptocurrency EOS is used within EOSIO to purchase the computational resources required to run Dapps on EOSIO.
Stellar is a new blockchain platform that utilizes the Stellar Consensus Protocol, which is intended to speed up the time required to process and finalize transactions on a public blockchain network. It also includes security mechanisms to exclude malicious or questionable actors in a financial transaction.
Discover how to secure your NFT purchases
with Blockchain technology
2. Create a Wallet
A wallet is a digital wallet necessary for buying, managing, and selling cryptocurrency and NFTs in a blockchain ecosystem. It’s like a bank account without a bank, accessed by the user through strictly personal cryptographic keys.
There are different types of cryptocurrency wallets, such as physical ones (USB-like devices) or mobile apps, but they all function essentially in the same way. Through a store of private key pairs, you have the ability to synchronize your wallet across multiple devices to send and receive cryptocurrencies.
The wallet doesn’t actually store the cryptocurrencies themselves but rather the information related to the necessary public and private keys for conducting cryptocurrency transactions.
3. Use Smart Contracts
Smart contracts enable the mechanism of decentralization in the blockchain. The various nodes in the blockchain validate each transaction based on the clauses written in the smart contracts. Every smart contract has these three characteristics:
- It executes automatically without intermediaries;
- It is written in code within the blockchain, making it irreversible;
- It is publicly stored.
In practice, through smart contracts, users accept a set of conditions. When these conditions are met, the smart contract automatically comes into action. Therefore, transactions in a market governed by these types of agreements occur automatically based on pre-established and previously approved conditions.
4. Create a DApp
DApps (Decentralized Applications) are applications that operate on a decentralized network.
Unlike traditional apps that work only if the user registers with personal data, decentralized applications operate through cryptographic keys corresponding to users.
On the blockchain, no one can see or manipulate user data.
Once registered, it’s possible to conduct transactions using the cryptocurrency supported by the platform. To create a DApp, you need:
- An API (Application Programming Interface) to access the blockchain and use smart contracts.
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Talking about blockchain marketplaces is still premature because it is a very young and rapidly evolving world. Like anything new, it still needs to be implemented and experimented with to become fully operational.
Currently, the usability of these decentralized digital markets is not yet at its peak, and the number of people involved globally cannot be compared to centralized realities such as Amazon or Alibaba.
However, investing in this sector means strategically entering the future digital reality. That’s why I recommend staying constantly updated and getting trained. Becoming a future professional and blockchain expert can be an opportunity to discover new business possibilities and overcome competition.
As a lover of Digital Marketing and SEO, I have embarked on a journey that I hope will lead me to fulfill a dream, but most importantly, to discover and realize myself! “There is a room where everything can be faced, everything can be resolved, everything can be healed. It is the room of dreams!”