Marketplaces in various forms have existed since the dawn of civilization and they have always been essential to a well-functioning society. So much so that they are arguably one of the most important indicators of cultural and economic development. With rapid technological progress, they have undergone radical transformations leading to the era of "marketplaces as online platforms".
In the last two decades, the platform-model has dominated most areas of the internet including marketplaces (Amazon, Shopify, Facebook Marketplace, LinkedIn, Fiverr, Upwork, among many others). However, the relatively recent renaissance of freedom-tech has inspired many to rethink current systems with greater user-control in mind.
Let's take a deep dive into the most pressing problems with marketplaces today, explore how and why we got here, and examine ways we can improve the situation with freedom-tech.
Some History
In ancient times, after local barter had been replaced by periodic and then permanent marketplaces, these became the central places where people took care of groceries and most other types of shopping. In ancient Greece, the Agora served as a central public space not only for trade but also for politics, art, religious activities, and social life in general. Later, during the Roman era, as the importance of marketplaces grew, they became increasingly specialized and distinct. This evolution of physical marketplaces continued more or less until industrialization laid the groundwork for the rise of giant supermarkets in the second half of the 20th century. Mass retail and chain stores soon eclipsed small-batch manufacturing and handcrafted goods. Consumer culture was born.
While people enjoyed the convenience and lower prices with the scaling of marketplaces, many resented the decline of bespoke and unique products, as well as the increasingly superficial and indirect nature of customer-producer relationships. Quality and safety assurance became fully controlled by the seller—namely, the store—and the government. The mere fact that a product was on the shelf implied it was supposed to be safe. Prominent shelf placement, elegant packaging, and boastful labels served as indicators of quality. I wonder if the popular bitcoiner mantra, "Don't trust, verify", might have come in handy even back then.
With the gradual digitization of marketplaces in the information age, we took this centralization a step further: we began relying on just a handful of platforms for everything, from the purchasing experience and product discovery to signals of trust and reputation. In contrast, reputation in ancient Roman marketplaces came from a multitude of independent sources:
- More prominent locations came with more prestige
- Institutions provided stamps on weights and amphorae
- Guilds published their membership lists
- Public contracts signified trustworthiness
- Sophisticated patronage networks produced testimonials and letters of recommendation for a well-established trader
- Repeat successful business allowed merchants to take on credit from the argentarii (bankers) who endorsed their clients in various ways
- The physical nature of marketplaces strongly supported face-to-face reputation from networks of personal relationships
Fiat Tech
Centralization of the last century unleashed fiat money and fiat technology in general: the top-down design of critical systems that society relies on today was convenient for the designers, and an effective way for the authorities to keep us in check. Slowly but surely, we became dependent on easy and short-sighted solutions that work against us all in the long run. Marketplaces are one of the best indicators for this corruption.
When Trust Dies
Signals of trust in today's online marketplaces are a pale shadow at best, misleading and outright fraudulent at worst. The constraints of localism and physicality have been removed, but most people neither expected, nor cared about the consequences. Digital scaling optimized for ease of access, funneling users toward the checkout page as quickly as possible. Worse still, with social media and the surveilled internet in general, platforms were able to infiltrate most aspects of our digitized lives, working hard to carefully manipulate what we see and how we act, including our purchasing decisions. On one hand, it is troubling how every single button-press is tracked; on the other, these same platforms still fail to provide customers with truly meaningful information, such as reviews from people they actually know and trust.
It is a strangely broken system: platforms are trying to invade our privacy but are also at odds with each other. Trying to lock people in and siphon off customers from other platforms at the same time results in poor discovery, broken trust signals and unprecedented metadata leakage, especially taking KYC requirements into account. Digital products and services face many of the same challenges as physical ones, with some important differences but let's stick to commonalities in this article.
Technology has enhanced market processes that used to be bound by natural friction, where people had to show up in person, have real conversations and maintain real relationships with each other. Enhancement is not a sin in itself, but when pushed too far without careful consideration, it produces precisely the kind of world we see today: A catastrophic race to the bottom.
Fiat money
Almost all marketplace platforms today use fiat money to settle deals. Since fiat money is completely controlled by the fiat banking system, it is subject to all kinds of manipulation by governments and fiat banks. Arbitrary inflation steals purchasing power and makes economic calculation nearly impossible. Censorship can get anyone debanked without effective recourse. Extensive financial surveillance places unnecessary extra bureaucratic burden on people, while exposing them to authoritarian governments and criminals hacking the centralized data-honeypots. Interbank settlement is slow because fiat money was not designed to be standardized in the first place: its primary purpose is to allow politicians to "tweak the knobs" of the economy and bend reality to whatever they think is best at the moment. This is not what I would call "ideal money" for global settlement.
The issues with fiat money make the system brittle against fraud, so in practice banks and payment systems need to compensate for the lack of trust by means external to the fiat system. This makes transactions slower and more expensive, and in many cases even impossible when the minimum trust between institutions is not met. These serious problems trickle down into every other system that wants to settle trade with fiat.
Marketplace platforms running on the fiat monetary system try to mitigate these fundamental flaws in multiple ways: to protect against charge-back fraud, they often introduce long delays into transaction settlement where they become escrow holders until the transaction can be considered reasonably final. This even happens in cases where there is no need for escrow at all, which can sometimes take several weeks. Platforms must also restrict which banks or payment rails can be used because of compatibility and compliance issues, effectively excluding anyone unable to open an account with the specified banks or service providers. High transaction costs also make micro-payments impractical, forcing businesses to lock users in with subscription plans or account-credit based solutions instead of per-usage settlement.
Freedom Tech fixes this(?)
As a believer in freedom tech I argue that fiat incentives push enhancement to extremes with solutions utterly detached from the realities of human nature. We might as well say that fiat itself IS the process of taking something so far away from reality that the only thing that matters is the arbitrary word of the authority. It happened with money when technologies like the telegraph—and later computers—were weaponized to capture gold. But fiat mentality hasn't stopped there. The very same tools combined with neglect and carelessness corrupted effective communication in the market as well.
From this perspective, we can identify some of the root causes:
- Fiat monopolies do not care about long-term sustainability. Short-term profiteering is more lucrative from a short-sighted small-thinker's standpoint
- Fueled by easy money and the fiat legal environment, their goal is to completely destroy competitors while controlling every aspect of trade
- To create vendor lock-in, they create identity silos and the mirage of a 'global view' of the market. From access and appearance to discovery, reputation, payments, dispute resolution and the privacy of market actors - they control the whole stack, but in reality, this saws off the branch they are sitting on
- Liquidity and reputation are more fragmented when platforms try to shut down access to data
- As we have seen before with social media and digital marketplaces, centralized moderation cannot effectively eliminate bad actors but often penalizes good actors when algorithms flag innocent people
- In practice, bad actors use all kinds of trickery to game the system and get away with fraudulent behavior while one siloed blacklist does not reach competing platforms. This makes it easier to cheat, vanish, reboot an identity and repeat
Marketplaces thrive on liquidity and trust which are seemingly at odds with each other: the more people you let in the more liquidity you get, but the more bad actors appear, causing trust to erode. The fewer people you let in, and the stricter the moderation, the less liquidity there is in the market, meaning fewer people find what they need. The solution to this conundrum cannot be found in one centralized algorithm.
As global middlemen, every platform creates its own separate monoculture. They cannot tap into an ecosystem of service providers and diverse sources of information which would be necessary to mirror physical marketplaces in digital space. These local despots are problematic not just because of the above: platforms are also easy prey for authoritarian governments that can easily shut down fiat corporations, thereby disrupting large parts of the economy.
The irony of the matter is that, in order to scale marketplaces to the size that big tech corporations are so longing for, they would need to lessen their role and become more decentralized so that crucial functions can be fulfilled by the most effective mechanism ever created by humankind: the market itself, governed not by petty tyrants but by open protocols. The whole system is slowly collapsing under its own weight while everyone loses — including them with the inevitable demise of fiat marketplaces as well. As with fiat banking, instead of small-scale localized failure with fast recovery, when big marketplaces fall, they completely wipe out the reputation of all users in the process.
Freedom tech: Enhancement with people in mind
The antidote to fiat-fueled platform capture is building digital marketplaces on carefully designed open protocols where people are put front and center:
- Financial infrastructure such as payment rails, escrow, credit and insurance needs to be based on Bitcoin: Unstoppable digital money imbued with Proof of Work, providing an absolutely scarce store of value and enabling transactions with cash finality
- Trust signals and reputation must be based on a protocol that captures real-world connections of people in the most faithful way. Nostr is the best contender to fulfill this role in my opinion
Bitcoin
I will not cover altcoins in this article since these are even worse than fiat money by masquerading as decentralized while being petty ponzi schemes. That said, readers are encouraged to conduct their own research if they wish so.
Bitcoin was designed as a decentralized monetary protocol intended to solve above issues with fiat. As the base-layer for settlement it provides true permissionless properties along with hard money features like gold. This makes it an excellent foundation upon which global trade can be built. However, fulfilling this role as base-layer money requires certain trade-offs: transactions settle roughly every ten minutes, and payments smaller than a few thousand sats (approximately a few U.S. dollars today) are typically uneconomical. Even so, this remains a major improvement over interbank settlement in the fiat system. To enable faster and smaller payments, additional protocols built on top of Bitcoin are required — each introducing further trade-offs to achieve this goal.
Bitcoin-based protocols
In recent years, several such protocols were developed with the Lightning Network (LN) emerging as the most widely adopted for use as a "medium of exchange". LN has been around for almost ten years at this point (2025) and has proved to be a great way to make faster and more private Bitcoin transactions. However, using LN in a fully sovereign way requires running an LN node—something beyond most people's technical capabilities. As a result, most users rely on custodial LN solutions, which function much like bank accounts: institutions hold the funds and retain full control over deposits. While the custody trade-off makes sense for a lot of people, the loss of financial privacy is still a hefty price to pay.
This is where Cashu enters the picture: a Chaumian ecash protocol integrated with Bitcoin, designed to enable privacy-preserving free banking backed by bitcoin. Under this system, banks receive bitcoin deposits and issue bearer tokens in return, which can later be redeemed for bitcoin. Tokens are created using a blind-signature scheme that proves the deposited amount while simultaneously protecting both banks and users against double-spending. Because tokens are not tied to any account (they function as bearer instruments), this system enables near-perfect privacy. "Cashu mints" (banks) use the Lightning Network for settlement. For example, if Alice wants to send bitcoin to Bob, and they use different mints, Alice can "melt" ecash and instruct her mint to transfer funds to Bob's mint using the Lightning Network. Once the LN transaction is complete, Bob receives newly issued (‘minted’) ecash tokens from his mint, finalizing the interbank settlement.
This is how all participants of this bitcoin-based ecosystem can mix and match the right solution for their particular security and privacy needs, in contrast to the opaque fiat system, where users face limited choices and trade-offs that are often unclear or undesirable.
Nostr: Freedom of Identity
Once upon a time, there was a project called Diagon Alley, a protocol for decentralized marketplaces, which never took off on its own but Fiatjaf ( nostr:npub180cvv07tjdrrgpa0j7j7tmnyl2yr6yr7l8j4s3evf6u64th6gkwsyjh6w6 ) took the idea as inspiration to create Nostr. Nostr was designed and improved with time by bitcoiners, therefore the intention to integrate with Bitcoin and Bitcoin-adjacent protocols (LN, ecash) has been there right from the start. All this aside, let me share some additional technical details on why I think Nostr is the best choice here.
The Power of Simplicity
On the surface Nostr is just user-signed messages(JSON) with minimal structure, published to an arbitrary number of servers called relays. In reality Nostr offers some simple but powerful primitives that can be used to build a whole spectrum of applications from marketplaces to forums, chat apps, microblogging, and more.
- The somewhat centralized yet redundant and mostly neutral nature of relays allows Nostr to achieve the following properties:
- Good enough availability: Relays are websocket servers operating on top of http providing with the enhancement of server-client architecture. Purely P2P protocols suffer from availability and coordination issues because nodes can easily go down in the network and you are left with establishing random connections with a bunch of untrusted peers for the most part
- User-driven: Centralized relays are balanced with the fact that all Nostr events are signed by individual users holding their secret keys as their sovereign identities, and are able to use multiple relays to publish their stuff or can even just backup their signed data which can be rebroadcasted any time. Furthermore, it is NOT the relays that authenticate content but users do (by using client apps that verify signatures on events). In contrast, the legacy internet architecture relies on TLS for authentication which is inherently centralized around root certificate authorities (read: fiat institutions permissioned by the US government ultimately)
- Variety with structure: While Diagon Alley was just trying to be a marketplace, Nostr was designed to cater to a vast number of use-cases by utilizing the 'kind' field in its JSON format
- Diverse context: Event kinds indicate what type of Nostr events we are dealing with: Microblog posts(kind 1), Articles(kind 30023), Classified listings(kind 30402) to name a very few. These cover an ecosystem of content-types that can be used by a multitude of clients that display the same exact data the way they want. When you are building a client-app on Nostr, you just select the kinds for your use-case(or even create your own spec) and render the content the way that is best for your users
- Prismatic identities: As in real life people don't behave the same way under different circumstances and they are not seen as the same person in different contexts: On different Nostr apps people see you differently due to the fact that apps render different kinds and even with the same kind, every app has its own way of rendering content. Moreover, you can have as many Nostr identities as you want and share as much information about yourself as you want. As a user you can balance privacy with reputation at your discretion
- Standardization: While it is true that Nostr developers often have heated arguments about how some important use-case needs to be specified, the bottom-up nature of Nostr protocol development still strives to ossify event formats to a sufficient degree because developers want to tap into each others network effects to not have to bootstrap their own app from ground zero. Think about it: You have a great idea about the next Substack with your own unique vision but how much money and time would it take for you to bring that idea from 0 to 1? This is out of reach even for medium-sized companies. On Nostr however you most likely already have some existing open-source client-apps for longform content. That not only allows you to use that code as a launchpad, but ALL the data and the creators and readers are already there! The incentive for you is clear: Use the same longform event format at least to the degree that existing articles appear properly in your app and users feel at least some familiarity when switching to your app from the previous one
Honest tradeoffs
One tradeoff of Nostr is that users now have to at least vaguely learn about which relays to choose and possibly even pay for them if they want their data to be preserved in the long run. Another one is that the secret key holding their unstoppable identity has to be safeguarded. Sounds familiar, bitcoiners?
Enhancement balanced with just enough friction. This is the power of Nostr. Not a fake global view, not a walled garden, and not a purely P2P mess.
The price of "global"
Money and communication differ in one enormously important thing: Money must have a global state while communication not necessarily. You missed a post from a thread of conversation, you could be slightly annoyed but what about your hard-earned sats? You get the idea: Bitcoin's tradeoff introduced the requirement of mining and to keep nodes relatively small (thereby being relatively slow), which is a great price we have to pay to keep money consistent. As far as I know NO other protocol achieved the level of consistency that Bitcoin boasts while remaining decentralized at the same time. You could say that money is the most wanted use-case for P2P with a global view.
With Nostr you can adjust your tradeoff balance for your own use-case: Almost perfect availability must introduce centralization around one relay (NIP29 although note that you can still backup signed messages and fork communities) while most marketplaces require more decentralization using multiple relays that users publish to. There are different techniques to make use of user-preferred relays and not centralize around preset hardcoded relays but this makes app development harder and more error-prone, and comes with much more data-usage. Feel free to learn more about the nuances of Nostr and how it compares to protocols like Matrix, ActivityPub, AtProtocol, Scuttlebutt and Pubky here.
In short, the conclusion for me is that Nostr introduced the right primitives that enable fine-tuning your app's desired tradeoff balance while other contenders don't. Most notably what all of these got wrong is that they could not resist the temptation of the global view. One way or another, they desperately try to consolidate the state of messages on the protocol level which creates all kinds of fatal problems that are just too hard to handle.
Our recipe has started to take shape. You can see how both Bitcoin and Nostr attempt to reintroduce authenticity and consequences that have been lost due to haphazard enhancement in a rush for convenience and control. Freedom tech is not a panacea and of course both of these protocols have their respective tradeoffs and shortcomings. If you ask me though, these are currently the best we got.
Real Deals around the corner
Marketplaces that utilize some combination of Bitcoin, Lightning, Cashu ecash and Nostr together form something I call the Freedom Economy. It is a permaculture of open protocols, apps and services that are interconnected in an unfathomably vast number of ways, and that no single individual or entity controls but is pretty much like nature: A complex ecosystem of self-serving organisms trying to fill niches in a diverse and ever-changing environment. It allows for all shades of centralized and decentralized solutions to work together.
A couple of apps already cover some important use-cases:
- eCommerce (de-Commerce)
- Shopstr
- Cypher space
- Plebeian market
- Conduit market (launching soon)
- Freelancing/Digital services
- Social apps rendering some event kinds of the above:
The advantage of Nostr is not merely that you can build different client apps for marketplaces but that one marketplace app can make use of not strictly trade-related event kinds, generated by other Nostr apps in the space. Such an example is when "social follows" from microblogging clients are used to bootstrap some initial trust on Nostr marketplaces. Another example would be to take the same Nostr identity that applied for a freelance job and check some microblog posts or longform articles of the same person in another app, to be able to make a more informed decision as a freelance-client. This is commonly referred to as the superpower of Nostr:
Moat = Network effects ^ Use-cases
But as I said before, there are privacy considerations users have to ponder. The real difference from platform-based solutions is user choice and going clear about tradeoffs rather than smuggling personal data out the back door.
Nostr apps are incentivized to do one thing well and leave other niches to different clients, which reminds me of something like the physical marketplaces of ancient Rome: Scalable yet localized, diverse yet standardized, elements of peer-to-peer as well as hub-and-spoke. Nostr is still in the phase of experimentation to find the sweet spot between user-choice, sane defaults and a learning path toward more sovereignty but the perspective is promising.
The freedom tech ecosystem is still nascent but the signs are already there: Shaped by lessons of past mistakes, Bitcoin and Nostr emerged and together unleashed a brand new paradigm for creating digital products and services. I view this as the foundation for enduring marketplaces that could thrive for generations.
Just enough enhancement with human incentives taken to heart: this is the recipe that entrepreneurs can use to build businesses that target the exact niche they want and serve their customers properly, in a sustainable way.
About the author
nostr:npub16p8v7varqwjes5hak6q7mz6pygqm4pwc6gve4mrned3xs8tz42gq7kfhdw is the developer of SatShoot, a freelance app powered by LN, Cashu and Nostr, and project lead/contibutor of BudaBit, a Nostr client leveraging git-via-nostr, creating Discord-like access-controlled and moderated (but interoperable) developer communities with integrated git features.
Your feedback and criticism is most welcome!