Purse to challenge E-Commerce giants Amazon and eBay with bitcoin based marketplace
There is small but growing group of teams that are targeting the e-commerce market, and they intend to not only disrupt the leading platforms, but change how the game is played entirely.
E-commerce industry leaders have recorded record breaking quarterly growth and earnings recently. Amazon reported a 23% increase in quarterly revenue, while eBay announced a 6% increase in gross merchandise volume in its quarter 3 financial report, released on October 21.
There is small but growing group of teams that are targeting this market, and they intend to not only disrupt the leading platforms, but change how the game is played entirely.
“I think the last time I saw there was a satisfaction survey for eBay 79% of people were happy. So that’s a huge number of people that are unhappy selling on eBay. Thus, OpenBazaar will be targeting the 21% of the unhappy users and give them an opportunity to try out the platform without fees.”
— – Brian Hoffman, OpenBazaar Core Developer
Openbazaar is an Open Source project started in April 2014 by Brian Hoffman, who based the platform off the hackathon-winning DarkMarket code by Amir Taaki. Since then, the project has taken off dramatically, capturing the attention of over 1,500 developers worldwide, with about 100 developers contributing code to date. In their Proof of Concept they had 2500 stores, with about 600 items for sale.
Although still in development, on June 11 OpenBazaar received $1 million in funding from angel investor William Mougayar, who also sits on the Board of Directors for the first third party provider for the platform OB1, as well as Union Square Ventures and Andreessen Horowitz.
One of the issues with traditional e-commerce platforms is the integration of inefficient mobile payment platforms, like Paypal. Most medium-sized businesses registered on major ecommerce platforms have international suppliers that manufacture or develop their goods and services. To match the demand from customers, online merchants often pay their invoices before they receive the products.
However, centralized payment networks such as Paypal require account limitation and verification with each transaction, to comply with know your customer and money laundering regulation. According to Paypals terms and conditions, the company is allowed to limit and restrict user accounts at anytime, if the user or merchant is suspected of irregular or illegal activities.
Bitcoin marketplace Purse.io, Openbazaar, and anonymous blockchain-based distributed e-commerce network DarkZone, are hoping to capitalize on the limitations of the current incumbent platforms, through the development of a fiat-less decentralized network of buyers and sellers.
Since the launch of its Amazon-based e-commerce service “Instant,” in May 2015, Purse.io has become one of the few startups in the bitcoin industry to succesfully develop solutions that simplify otherwise intricate daily tasks and operations. Over the past five months, the service has transformed from a third-party Amazon discount service application to a bitcoin-based marketplace, gaining popularity and users during process.
Following its success, the team announced the development of a stand alone bitcoin-based decentralized marketplace, dubbed “the ebay killer.” The platform allows anyone to sell or purchase goods online, without integrating fiat-based financial platforms and networks such as PayPal.
All of these decentralised alternatives aim to integrate a range of disruptive technologies, including blockchain escrow and smart contract issuance systems, to settle disputes between buyers and sellers. These lofty goals could completely eliminate the intermediaries traditionally required on e-commerce platforms.
“We are very excited to build useful applications that are impossible with traditional payment systems,” said Andrew Lee, Purse.io CEO. “Our decentralized marketplace will enable anyone with a smartphone to buy or sell goods.”
The marketplace from Purse, officially called Purse Merchants, will debut with bitcoin and blockchain security-focused startups selling bitcoin hardware wallets and ASIC miners on the platform, from companies including Trezor, Ledger, Piper Wallet, KangerTech, Zeus Mining and KeepKey.
“By expanding and adding additional merchants we are one step closer to accomplishing our dream of an online platform where anybody can buy, anybody can sell and there are no more barriers to online commerce.”
— – Andrew Lee, Purse.io CEO
Unlike other contenders in the industry that are yet to release a final product, including Openbazaar, Purse has a proven track record that may well provide them with the experience to beat out the competition.
“With more than 60,000 customers and $4.5 million dollars in successful transactions, Purse has proven that blockchain escrows are the ultimate form of online consumer protection, allowing consumers the option of a refund, while proving to the merchant that the funds are available.”
— – Purse team
If Purse Merchants makes it to market before the other solutions in development, it is set to be one of the the world’s first commercial e-commerce platform to fully eliminate both escrow agents and third party financial applications, creating a trustless peer to peer platform for buyers and sellers.
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