By Fenja Persello.
On Tuesday, September 26, the team from Swarm City came to the Crypto Valley Forum Meetup to explain how and why they want to build a truly global peer-to-peer economy for service providers and consumers. They are developing a blockchain technology based commerce platform for humans to transact, create and share value without a middleman on a global scale. They also shared how their learnings and efforts help in further developing the Ethereum system infrastructure.
Why a decentralized peer-to-peer commerce platform?
In a physical store a transaction is quite transparent: a potential customer can test a product for its quality and settle a price with the vendor. Over the last decades, peer-to-peer commerce has become more international and trading parties are spread all over the globe. To facilitate the required level of trust, intermediaries provide platforms to ensure a trade in which expectations of buyer and seller are met. However, these intermediaries charge fees for their administration. The Swarm City team recognized the potential of blockchain technology to build an infrastructure where buyers and sellers can connect directly and trade securely. The core technical offering is a decentralized app running on Ethereum, directed by smart contracts. This new way of exchanging goods and services should result in higher value for both parties due to lower transaction cost, healthier competition and more individualized services. For more info, find an explanatory video here.
In October 2016, the team conceptualized in The Arcade City whitepaper how they want to establish a platform operated with Ethereum smart contracts that would facilitate decentralized commerce. The platform should provide the functionality for parties to communicate and transact in an intuitive and secure way. With their first two releases, Swarm City enabled their users to set up a profile, create a wallet to trade Swarm City Tokens (SWT) and join marketplaces organized by hashtags. Pioneer users are now testing and exchanging services and goods, building their personal credibility on the system, which is measured by the number of successful transactions related to a specific (marketplace) hashtag. The third release of Swarm City on the roadmap is called “Storefront” which will introduce context-dependent Graphic User Interfaces. Ultimately, the presenters leaked, in future users should have the choice to group together to offer services in so-called hives. Find more info about their development roadmap here.
But as with all platforms, attracting users to create and exchange value is key. Hear from Bernd in this video how Swarm City encourages buyers and sellers to join a market place.
How Swarm City contributes to the Ethereum infrastructure
Stefan from Swarm City explained that the team realized that they were facing challenges that many Ethereum app developers shared. Complying with strict peer-to-peer logic, the team decided that they want to open source their solutions to some of the roadblocks. One is a faucet for testnet Ether, where a smart contract sends Ethereum test tokens that don’t contain value to your account. Having a first number of testnet Ether in your account, you comply with the basic logic of blockchain’s transactional conditions and can start using a testnet. A second is called IPFS consortium, a project that provides decentralized storage for data to run an app on Ethereum. Swarm City even designed an easy-to-build hardware component to encourage more people to join the consortium, contributing an additional node. Lastly, they presented Gas Station. This project solves the chicken-and-egg problem that new users may face when they join a new app run on the Ethereum blockchain: To transact using an application’s token run on the Ethereum blockchain (e.g. SWT) a fee must be paid in Ether (ETH), but what if you don’t own any ETH but you want to transact in SWT? For this case, the team set up an ETH lending system for the initial transaction of SWT. With this solution, you can borrow some ETH to run a first SWT transaction, given you meet several conditions that prevent fraud.
Crypto Valley Association members called to action
Bernd and Michael from Swarm City encouraged the CVA crowd present at the event to get involved: Developers to contribute to their next release, testers to join the pioneers on Swarm City, business folks to start thinking in hashtags and ultimately, fans to spread the word and start holding SWT. The extensive Q&A session clearly reflected the CVA member’s interest in Swarm City’s new approach to peer-to-peer commerce. Or as Kiki and Michael from Swarm City experienced it: “We were really impressed by how open-minded and eager the crowd was to wrap their heads around a new logic decentralized commerce.”