As we discussed in prior sections on businesses and value creation, there needs to be basic trust amongst various parties in order for a liquid market to emerge. In the pre-blockchain universe, businesses always relied on centralized authorities for various services.
In the new world, blockchain enables a new type of market network where a few key properties are always upheld:
Parties can trust each other because their network is mediated by blockchain smart contracts that govern how things work. In other words, the protocol codified into software enables trust between parties, with the software itself acting as an independent third party.
The blockchain may be private or public, the latter makes it permissionless aka anyone on the Internet can create an account and participate in the trust network.
Blockchain also empower organizations to become truly decentralized, without any central authority, but instead governance itself managed by smart contracts and voting right amongst various types of participants.
And because each account on a blockchain is essentially anonymous (remember, anonymous is also identity), private transactions can happen in a publicly trusted manner. Each account maintains secrecy and in double-blind marketplaces, the parties do not even need to actually know each other.
Because there are far fewer intermediaries, the overall costs of doing business is lower.
Because there is less human intervention and bureaucracy, systems can work in near real-time to deliver value across the network.