Blockchains and smart contracts create new peer to peer transactions. This simple statement is the foundation of incredible economic growth in this new asset class. Bitcoin was the first implementation of blockchain technology, while Ethereum and other blockchains have built upon it and opened up further opportunity for entrepreneurs. The $0 to $145 billion in market cap in this space is evidence of the power of this technology.
FOAM is creating a protocol and smart contract on the Ethereum blockchain that will bridge real world locations to the blockchain[1]. This will create new peer to peer transaction possibilities that take advantage of blockchains’ trustless contract technology.
Why is “trustless” important? Let’s use a well known “trusted” company to identify how powerful peer to peer transactions can be, before we see how FOAM will remove the "trusted" requirement and why that matters.
When the internet was opened for commercial use, a small startup called eBay made it possible for people to buy and sell from strangers, with eBay as a trusted third party. eBay is also reliant on trusted third parties such as Paypal to enable payments. eBay sellers pay a fee to both eBay and Paypal for the use of their trust-this is the business model for both companies.
Unfortunately, these fees raise the cost of doing business on eBay, restricting sellers’ ability to sell certain low margin items. To be fair, sellers on eBay already have lower fees than commercial sellers, who have overhead costs tied to leasing space, utilities, upkeep, and more. But the fees do lower profits for sellers. When these fees, or inefficiencies, are reduced or removed altogether, sellers are able to offer a wider variety of products at more competitive prices for consumers.
There is more than just better prices ahead, however.
eBay disrupted traditional retail and resale by opening people’s garages and attics to the world. Until eBay, second hand stores only offered what was local. Finding quality second hand clothing was much more difficult than it is now, as eBay sellers have made a traditionally illiquid market quite liquid. In the past, if I wanted to buy a nice pair of Allen Edmond’s dress shoes, I would need to pay full retail price, unless I was incredibly lucky and found a pair that were 1, my size, 2, my style, and 3, in good shape at 4, a good price.
eBay’s peer to peer trusted system created far better opportunities such as Steve’s shoe store, where I can peruse a collection of these shoes at amazing prices. This is the power of peer to peer. There are plenty of other eBay sellers who specialize on different brands and types of clothing as well.
Customers trust eBay, but as I mentioned above, the cost of a trusted system prevents certain markets from being realized. eBay, Paypal, and shipping combined cost sellers 20% or more of their revenue. Bitcoin has already revolutionized trustless payments; why can’t FOAM’s technology revolutionize peer to peer delivery?
Peer to peer technology reduces the friction points between transactions that raises prices-costs that go to the middleman instead of remaining between buyer and seller. FOAM reduces the transactional friction points that relate to location, allowing smart transactions to take place automatically depending on a person’s location. It does this by creating Crypto Spatial Coordinate (CSC) smart wallets that allow real world locations to be included into the logic requirements of smart contracts.
FOAM’s CSCs could also incentivize autonomous vehicle technology to flatten consumer interactions, lower costs dramatically, and open up some amazing new opportunities. CSCs can be loaded with cryptocurrency, creating opportunities for peer to peer transactions involving autonomous vehicles-transactions that don’t have heavy fees attached. These use cases are fundamentally different from what eBay (or any non blockchain retailer) can offer.
It may seem a little fantastical now, but let’s look at some use cases the near future could bring:
Locally sourced food
Not terribly long ago, people had fresh milk delivered to their homes by a delivery man. CSCs could be used to create fresh food delivery from local farms, allowing Community Supported Agriculture to better compete with local supermarkets. This decreases transportation costs as food is delivered from farm to doorstep, with no middleman. Farmers could sell their own ERC20 tokens that you deposit into your CSC, allowing a fully blockchain based economy. [2]
Local buying and selling
I’ve been selling a lot of extra stuff I don’t need using an app called Close 5. Close 5 is for local buying and selling, and it’s super helpful for bigger stuff (like guitars) that is hard to ship. CSCs could be created by FOAM tokens to simplify and verify delivery and payments. Postmates is another app that could benefit from CSCs: instead of paying drivers to deliver food, use an app on your phone to order Chipotle and watch as it automatically deposits tokens into your CSC for the delivery drone to pick up as it drops off your burrito. [3]
VR Experiences
My favorite future tech mashup: VR+drones+3D video cameras. Imagine this: you put on a VR headset like Oculus Rift, and you’re fed a video of a drone flying through the Sierra Nevada mountains...or Manhattan...or Tokyo. You look around as the drone flies through and look around in every direction. CSCs would allow anyone to create a route that drones could fly through and record video, allowing a completely new sort of tourist industry that can happen at home! You could even gamify drone delivery once tech matures (mainly bandwidth) to the point of real time control and video.
Autonomous Vehicle Routes
As this matures, owners of autonomous vehicles could put their vehicles to work while idle. CSCs can help guide routes and incentives. Currently paying for parking while you’re at work? Have your vehicle drop you off and head to the first nearby CSC with a job for it. Need to charge your electric vehicle? CSCs can help enable that, too.
And so much more
The future is exciting. While it is impossible to know for sure how CSCs and autonomous vehicles will interact, these ideas point to a larger world of possibility that will increase the quality of life for many. For once, the cost cutting that ethereum allows directly help buyers and sellers save money and reduce overhead.
What exciting opportunities do you hope to see?
[1] You can read more background in my earlier FOAM articles, part 1, part 2 and part 3.
[2] This has incredible implications in places without stable currency. Local communities can maintain stability during crises.
[3] There are no current plans in place of FOAM working with Chipotle, Close 5, or Postmates. But I hope somebody makes some.