Tuesday, July 16, 2019
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Time to PART from the eBay days?

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No middlemen, but a lot of privacy and individual power as one goes shopping online. All that powered amidst aisles and aisles of open source software in a world that has been colonized with off-the-shelf ware. Sounds like a dreamy off-season sale?

A peer-to-peer marketplace that is open, private and decentralised – that is an idea that is bound to draw ‘why no one has done this already’ reactions from anyone who hears about it. Especially the part about using cryptocurrencies easily as one shops or sells bread or car-parts from the cosy confines of a keyboard! Without parting with any data!!

And the novelty of something like a ‘PART’ – a native token that can be a disruptor for cold staking (i.e. staking with no need to expose crypto money on a hot wallet while participating in a PoS – Proof of Stake model) possibilities on these platforms.

In fact, the latest Particl Open Marketplace Alpha V2.0 that has just been released on Github affirms that privacy and security remain the core drivers of this endeavour, especially when features like multi-wallet capabilities, blinded escrow, and OMP library are being baked in.

But there has to be more to this idea. Particles of various shapes surround this concept as it weaves its way through the complex, chaotic yet explosive phase that the industry is in now. It is a laudable and about-time model, but how easy is it to construct a new alternative economy, using blockchain, that allows people to both earn and spend money in a completely trustless fashion while ensuring minimal dents to privacy? It is also interesting to see how and how much would metadata stripping and a MAD (Mutually Assured Destruction) escrow make some difference here.

Particl’s CryptoGuard lets us in on some industry doubts, innovations and questions that are going to matter in their own spins and sprints as this odd, giant and new shopping cart wheel moves forward.

What is Particl’s approach to decentralisation of data?

Data on Particl is entirely decentralised. There is no central entity that can collect and use data from Particl users. And because public blockchains, in light of all the progress made in the blockchain analysis industry, can potentially be worse in terms of data protection than well secured centralised infrastructure, Particl has built into its chain several privacy protocols to ensure that what’s stored on the blockchain cannot be deciphered by any party.

How?

On the Particl marketplace, marketplace data (i.e. listing pictures or description) are carried by SMSG, a bitmessage-like P2P messaging system that runs parallel to Particl’s blockchain nodes. This protocol ensures all metadata is stripped before being uploaded and that the identity of the uploader/downloader of each set of data remains untraceable. Data ends up being stored locally on all SMSG nodes. Particl makes a full and unequivocal commitment to maintaining full decentralisation.

So can you cite some revenue possibilities and applications that this unique approach can still shape into?

The Particl economy offers many ways for users to earn PART. There is, for one, Particl Proof-of-Stake, a PoS protocol heavily used by the Particl Open Marketplace itself. The protocol creates inflation of four per cent a year until July 17th, 2019, after which it decreases to three per cent until July 17th, 2020, and then to two per cent a year later. The inflation rate will settle on two per cent indefinitely. The staking rate right now is approximately six to seven per cent, given the fact that 48.6 per cent of the network is currently staking.

Additionally, stakers also earn all of the transaction fees generated by Particl. This includes transaction, proposal, and listing (marketplace) fees. Listing an item on the Particl marketplace costs a small listing fee, which is entirely distributed to the stakers. This creates an experience similar, but different, to what you would expect from a cashback.

Can you elaborate on the staking part? How does it blend into the marketplace?

Particl PoS allows for true cold staking. It requires you to set up your own node, but for simplicity’s sake, users can simply use a cold staking pool. These pools offer a very user-friendly and accessible way for users to quickly stake their coins and benefit from cold staking at the same time. These pools charge, however, a small fee to their users. Using the cold staking pool protocol, anyone can run its own pool, without being able to steal or move their users’ coins, and earn a few PART by charging a small percentage to their users.

Additionally, anyone can put items or services up for sale on the marketplace. Selling a product or service will earn you sales profits, paid in PART by the buyer. The marketplace isn’t limited to physical or digital items, neither. You could, for example, put up any coin up for sale against PART. If you wanted to sell some of your BTC for PART, you could put them up as a listing and wait for a buyer to complete the transaction with you. In that case, you could charge a premium for the transaction. With the marketplace, the revenue possibilities are only limited by your creativity.

Should we worry about what would happen when ‘immutability’ of data plays its effects on data monetisation, simplicity, scalability, storage etc.?

The best way to protect your data is to not share it in the first place. Monetising data will always incur a risk, which is that whoever you share your data with, in exchange for value, might misuse it or get breached into. At Particl though, we make it a point to keep things simple. Even though we hold a strong position on the immutability of data, we still make sure the interface of our platform is as user-friendly and simple as you would expect from any traditional marketplace.

On the scalability side, we run a P2P bitmessage-like network parallel to the blockchain as to not bloat the chain with countless data sets that would make running a full node a nightmare a few years down the line. We are also actively researching various protocols to enhance scalability, like the Lightning Network, which has had its first testnet transaction last month. Particl already has Segwit enabled by default on all transactions and blocks since its genesis. We are also researching and experimenting with various solutions. Scalability is not something we worry about in the short-term but need to be addressed at some point. This is why we are thinking ahead doing R&D on that end before it becomes problematic.

What about interoperability, and variety/fragmentation?

We have developed an Open Marketplace Protocol (OMP) that is used as the backend of the Particl Open Marketplace. This protocol can be adapted to any other P2P marketplace that wishes to integrate it, and the data stored locally by vendors can then easily be exported to any other P2P marketplace which makes use of the OMP Library.

Can you explain the role of ‘network effect’, if any, here?

Marketplaces, especially 2-ways marketplaces, are all about the network effect. They are platforms that entirely rely on their users to generate activity. The use of a coin, in our case, PART, that incentivises users to run the network and that benefits them in various ways (staking interests, privacy capabilities, voting rights, etc) is a critical piece in getting a decent community excited by the platform. Because P2P marketplaces are different than what we are used to use and because they’re generally quite a bit less user-friendly, they will have a hard time to get network effect without a coin being there to kickstart adoption and get an incentivized community.

Is all this good news for advertisers?

Because there isn’t a single central party owning or operating the platform, there isn’t a place for advertisers to put up ads. And because Particl also employs industry-leading privacy protocols, no data can be collected by any party other than the ones users are directly transacting with (i.e. a vendor will need a buyer shipping address, but there is no ‘Particl company’ that can collect the data exchanged between users). In that sense, Particl takes the extreme stance to not generate or collect any data AT ALL.

What about GDPR, first-party data players, third-party data players and other current ecosystem elements?

It is, of course, possible for third-parties to build on top of the Particl network. It is not because it is entirely decentralized and doesn’t use ANY third-party at all that third-parties cannot use the protocol to build services and businesses around it. A business could, for example, offer insurances for MAD escrows.

They could, for example, build their own interface and add a few services on top of it such as cashback on selected vendors. They could even put up ads on their own interface. The underlying Particl protocol, though, will always remain entirely decentralised, private, and without any single third-party being required to operate the platform. Each third-party that seeks to build on top of the Particl network will have to figure out GDPR and other legalities on its own, as it relates to its own business model.

Anything else that you would like our readers to understand or think about?

Particl offers a completely trustless and extremely low-cost solution for B2C and B2B online commerce. Its escrow system is free of use and doesn’t require any third-party to function. It instead uses a double-deposit game-theory system (MAD). This allows users to completely avoid escrow fees and keep all of their transaction details, account information, tracking numbers and conversations private (as no escrow agent is required).

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