Constructing Electronic Marketplaces using Peer-to-Peer Technology

Due to the widespread appearance of filesharing systemslike Napster, the peer-to-peer concept has recentlybecome well known. So far, these file-sharing systemshave been used for the exchange of digital goods. Werecommend a concept, based on that of the file-sharingsystem, for a decentralized electronic marketplace thatfocuses on the exchange of physical goods. In contrast tofile-sharing systems, the decentralized electronicmarketplace would emphasize the decentralizedmanagement of transactions instead of the delivery of thegoods themselves, since it would be impossible todistribute the traded goods via digital networks. Such aconcept can be imagined as a “Napster fortransactions”, the difference being that this peer-to-peersystem would be used for files that contain parts of atransaction e.g. a demand document, a supply document,or an invoice document instead of for the exchange ofaudio and video files. In contrast to conventional filesharingsystems, these transaction elements aredependent on one another, i.e. they need to be combinedto complete a transaction. It is the role of the peer-topeerinfrastructure to manage the flow of the transactionelements in order to complete a transaction. Such aninfrastructure would allow the management oftransactions without the presence of a middleman,leading to lower prices of the traded goods. What followsis a description of the conceptual and technical details ofa decentralized electronic marketplace based on peer-topeertechnology and a discussion examining the extent towhich the functions of a conventional intermediary canbe replaced by a decentralized peer-to-peer infrastructure....