TradeStuff Whitepaper v1.0

Abstract. 

TradeStuff revives the oldest method of trade, moneyless barter, by introducing solutions to challenges affecting the practical application of peer-to-peer barter today. These problems include a lack of trade security, a lack of efficiency and limited trade options due to a required double coincidence of wants. In this paper, we introduce TradeStuff, a decentralized application built on top of a robust blockchain architecture that uses scalable distributed ledger technology to support solutions to these problems.

TradeStuff utilizes smart contracts to make trading secure, using “stake” to incentivize good behavior, an objective user reputation, prevention of double spending, and a dispute resolution system. Trade negotiations are made efficient by introducing systematic trade negotiations, a method of sending and receiving negotiations without requiring verbal communication. Trade options, otherwise limited by a required coincidence of wants, are expanded through algorithmically derived trade options which can be accepted to create bilateral and multilateral trades.

The resulting application provides users an efficient and secure way to acquire a wide range of Stuff in the TradeStuff marketplace, without having to use money as a medium of exchange; effectively, unlocking the purchasing power of the demand value of Stuff.

DISCLAIMER: THIS WHITE PAPER IS A WORK IN PROGRESS AND IS FOR INFORMATION PURPOSES ONLY AND SHOULD NOT BE CONSIDERED AS A GUARANTEE OF BUSINESS ACTIVITIES IN THE FUTURE. TRADESTUFF AND ITS AFFILIATES DOES NOT GUARANTEE THE CONCLUSIONS REACHED IN THIS WHITE PAPER OR THE ACCURACY THEREOF, AND DOES NOT MAKE ANY REPRESENTATIONS AND WARRANTIES, WHATSOEVER. TRADESTUFF AND ITS AFFILIATES SHALL HAVE NO LIABILITY FOR DAMAGES OF ANY KIND ARISING OUT OF THIS WHITE PAPER OR ANY OF THE CONTENT CONTAINED HEREIN. TRADESTUFF RESERVES THE RIGHT TO CHANGE, MODIFY, ADD, OR REMOVE PORTIONS OF THIS WHITEPAPER AT ANY TIME, FOR ANY REASON. THIS WHITE PAPER DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO SELL TOKENS, SHARES, OR THE SERVICES OFFERED THERETO. 

Background

Barter Exchange in Prehistoric Times – Barter 1.0

Barter without the use of money as a method of exchange is the world’s oldest method of trade, known to have originated in prehistoric times, dating as far back as 150,000 years ago. This primitive form of barter (“Barter 1.0”) was inhibited by limited trade options, resulting from a required “coincidence of wants” in which each party involved in a trade must want the other’s offering for a successful trade to happen. 

The Rise of TradeStuff

The Rise of Currency & Credit

The use of currency as a medium of exchange was introduced to solve barter’s coincidence of wants problem, among other inherent inefficiencies. Bones containing marks, dating back approximately 30,000 years ago, are believed to be used to keep tally, and were possibly an early form of tracking credit. Many cultures around the world developed the use of objects as currency. In Asia and Africa cowry shells were used as currency, and Ancient Mesopotamian civilizations used gold and silver as money tracing back to the fourth millennium BC and earlier.

Although impossible to trace the true origin of the invention of money, in 350 B.C., Greek philosopher Aristotle contemplated that the assignment of monetary value to an otherwise insignificant object, such as a note, could be used to solve the coincidence of wants problem and move away from a bartering society. Since then, an economic transition has taken place, moving from a system of barter to a system of money and credit as a medium of exchange, establishing the basis of our modern day monetary system.

The Information Age Gives Rise to Barter 2.0

The advent of the internet gave rise to a more efficient form of barter (“Barter 2.0”), resulting from the ability of market participants to instantly send and receive information electronically across the internet.

In 2005, a man by the name of Kyle MacDonald Kyle placed an ad on Craigslist, a classified ads website, with the intention of trading for something better. He managed to trade one red paperclip to kick off a series of fourteen trades, ultimately trading up to become a homeowner. 

He began by trading his red paperclip for a “fish pen”, then the pen for a door knob, the door knob for a camping stove, and so on, continuing to trade up in value until he ultimately bartered for a house in Kipling, a small town Canada’s Saskatchewan province. 

Bitcoin Gives Rise to Blockchain Technology

In 2008, bitcoin was created by an unidentified source using the pseudonym Satoshi Nakamoto. Bitcoin introduced new kind of decentralized currency able to operate from peer-to-peer without an intermediary central bank or administrator. Bicoin’s underlying distributed ledger “blockchain” technology, allows the network to be operated trustlessly between independently operated, unpermissioned nodes, thereby eliminating the need for a trusted third party.

Blockchain Technology Gives Rise to TradeStuff’s Barter 3.0

The advent of blockchain technology gave rise to TradeStuff in 2019, introducing a new secure and efficient form of barter (“Barter 3.0”) that utilizes blockchain technology to bring innovative solutions to many of the problems affecting the practical application and widespread use of barter today.

Problems of Barter Today

While demand for barter is evident through the adoption of a number of internet-based barter forums, directories, and socially powered applications, the practical application and widespread use of today’s barter systems are constrained by the following problems:

A Lack of Trade Security 

Current applications require that parties trust each other enough to enter into a trade. There is no security against breach of agreement, misrepresentation, or “double spending”, in which one party may enter a trade agreement with multiple parties for the same items. With negotiations often verbally arranged, no recorded proof of agreement might exist. There are no established methods of barter dispute resolution, making conflicts difficult to sort out, subject to hearsay. There are no ways to accurately discern the reputation of a person involved in a trade, leading to increased trade risks. 

Inefficient Trade Negotiations 

Today’s barter systems require verbal messaging and collaborative communication between two parties, resulting in inefficient back-and-forth messaging. Personality differences, human emotions, and misinterpretations may interfere with otherwise successful trades. There is no transparency as to whether offers received are still valid or whether items are still available for trade. 

Limited Trade Options 

In peer-to-peer trade systems, trades are limited to bilateral parties with a coincidence of wants, resulting in limited options and lower chances of successful trading. A user’s success may depend on how much effort is put into finding a counterpart to trade with. 

The TradeStuff Solution

Robust Blockchain-Based Decentralized Infrastructure 

TradeStuff is built on top of EOSIO open source blockchain technology–powerful decentralized infrastructure that utilizes programmable smart contracts to enforce provably fair and transparent rules that can be validated by anyone. Decentralized infrastructure allows TradeStuff to distribute its data, transaction validation and consensus (block production), governance, and a transparent, auditabile action history ledger.  

TradeStuff’s blockchain technology allows users to directly interact peer-to-peer, using smart contracts to enforce rules in a trustless way without the need of a trusted third party intermediary.

Prevention of Double Spending

Blockchain technology employs a Delegated Proof of Stake (“DPOS”) Byzantine fault tolerant consensus algorithm that prevents double spending, thereby removing the burden of avoiding conflicting trades from users.

Staking for Security and Bandwidth

Stake serves as a mechanism for incentivizing good behavior between users involved in trade, and also serves to provide an allocation of blockchain resources (RAM, CPU and Network Bandwidth) to the account. For stuff to become eligible for trade in the marketplace, the owner account must have available stake equal to or greater than its individual value. When stuff enters into a trade, the owner’s account Stake, in the amount equal to the stuff’s value, becomes locked by the smart contract. When the demanding (receiving) party in a trade route confirms acceptance of the received stuff, the Stake amount corresponding to the supplying (delivering) party is unlocked.

Dispute Resolution 

The supplier or demandant in a trade route can open a dispute to request moderator resolution. When a dispute is opened, the arbitration smart contract assigns the case to a non partisan moderator who gathers claims and evidence from both parties and sets a resolution accordingly. The smart contract then executes rules based on the resolution set by the moderator, causing the Stake to either be unlocked back to the supplier or transferred to demandant to resolve the dispute.

Efficient Trade Negotiations 

Inefficient verbal trade negotiations are replaced by the ability to send, receive, accept, and decline trade negotiations efficiently and systematically using smart contract actions that are provably fair, transparent and verifiable, and can scale to process thousands of actions throughput per second. 

Objective User Trade Reputation

Rather than using the standard subjective review comments that are often misleading and fueled by personality and emotions, TradeStuff displays user’s objective trade history from which reputation can be derived.  Successful trades without dispute are considered positive, disputed trades won are considered neutral, and disputed trades lost are considered negative.   

Trade Options Algorithm

An options algorithm maps offers and derives potential trade options presented to users, who can accept an option to crate a bilateral or multilateral trade, or can decline.  A trade option is effectively an algorithmically identified option to create a trade with the specified supply (delivering) in exchange for the specified demand (receiving).  

Multilateral Trade Mapping Algorithm

To expand user trading options, otherwise limited by the “coincidence of wants”, TradeStuff features algorithmic multilateral indirect trade mapping. 

In a bilateral peer-to-peer trade illustrated below, two parties trade stuff with each other, only if each party has stuff the other wants.

In multilateral peer-to-peer-to-peer trade, a user does not need to have a coincidence of wants to satisfy a trade. The multilateral trade mapping algorithm maps indirect routes to create a trade that satisfies all the supply and demand in a trade. In the following example of a multilateral trade, the owner of Stuff A received Stuff C in the trade, without having to possess any items wanted by User C. 

Advanced Trades – Value Sharding and Bundling

In the near future, value sharding and quantity bundling will allow for more flexible trade route possibilities and further increase the chances of success. As illustrated below, if User C makes trade offer for the Stuff of User D, User D has the option to trade for the Stuff of User A, B or C. Users can trade Stuff in different relative quantities and/or value; a trade that would otherwise likely prove impossible. In the below example, all Users send and receive the same total value of Stuff, but the transactions involve different Users and different quantities & values of individual Stuff. This gives liquidity to the value of Stuff, unlocking its purchasing power. 

No Trading Fees 

The TradeStuff Platform is free to sign up and trade on. No user or trading fees are charged by the TradeStuff Platform, allowing feeless transactions. Accounts are only limited based on User Stake balance. 

Simplicity and Ease of Use 

TradeStuff’s complex and robust blockchain technology runs behind the scenes, providing users with an intuitive and user-friendly front facing interface.

Conclusion


The TradeStuff Platform allows Users to monetize owned stuff by unlocking its purchasing power and using it to acquire other Stuff in the Stuff marketplace, without having to use money as a medium of exchange. TradeStuff makes barter easy, efficient, and secure.