In short order we’ve seen a share of local commerce move from brick-and-mortar to digital to mobile, as SMBs discovered new ways to take advantage of the variety of platforms promising efficiency in connecting small businesses with consumers. But always through some conduit (Yelp for example, or Uber) and less frequently direct. Less… business owner-to-consumer.
And that may now be changing. At least it will if Luis Molina gets his way.
Molina is CEO and founder of Fermat, which can be described collectively as a peer-to-peer (P2P) network, a component framework and an ecosystem of white-label P2P apps. Fermat aims to remove the middleman and allow customers and small businesses (or people offering services) to talk directly to one another and pay for services using the likes of Bitcoin.
Imagine an on-demand service that requires no proprietary app to engage — food delivery for instance. Just tap into the Fermat’s own app which opens a field of options including white-label tools created by Fermat’s network of developers, each whom is remunerated via micro-payments based on use.
As Molina says on his site, without shying from the obvious ambition: “Fermat aims to replace the ‘Sharing Economy,’ where powerful intermediaries extract significant value and information from every exchange. In the ‘P2P Economy’ the immediate parties to the transaction enjoy more direct control and ownership of all data and value exchanged.” Find more in Molina’s recently released white paper.
According to Fermat’s proclamations: “The business of matching buyers and sellers is removed on every major industry. The matching is automated by the system. Intermediaries are optional, but valuable as long as they add extra value to the parties on a transaction, besides the matching itself. In this way the Sharing Economy of today evolves into the Peer to Peer economy of tomorrow.”
If this sounds little like the original vision some at the dawn of the Internet professed you’d be right. And Fermat cements the point by proclaiming the time has come for an “Internet of People”:
Today, the Internet is home to mega-corporations, governments, massive server farms and user surveillance. Do you remember when it was about connecting real people directly? We are building an open source framework that combines blockchain and P2P tech to allow anyone, anywhere to find, communicate and transact with anyone, anywhere, without unwanted third party involvement and privacy risks.
With Fermat people can freely connect with each other at any level and for any reason. A peer to peer network helps to connect end users’ devices between each other and act as a giant distributed directory of all users, their social profiles, professions, services they provide, products they sell, etc.
Street Fight recently sat down (*virtually) with Molina, a 20-year online banking vet who resides in Budapest, to hear more about the burgeoning plans he has for re-inventing commerce and communications.
What are the mechanics of what Fermat is and why is the P2P architecture critical to it?
At its very core, Fermat is a framework for developing mobile apps with reusable components. These are not random components that anyone might propose. Instead, each of the components work as part of a community-designed master plan. Architected this way, Fermat opens several dimensions for re-usability: at a component level, at a work-flow level, at an app level. It also enables app specialization, re-combination and re-branding. Fermat the project is all of this, coupled with a business model for component authors that is embedded into the system.
For example, let’s say you were to build one of the components needed for a single Fermat app. You would receive micro-payments from end users using that app. If someone else “niches,” or repurposes your open-sourced app by replacing the GUI and a few components — while yours is still needed — the Fermat system will collect micro-payments for you from end users of the second app as well. If, later on, someone else combines the second app with yet another app, creating a third app with a mixture of their functionalities, you will still receive micro payments from the user base of the third app as well. Finally, if a company simply re-branded the third app by replacing its user interface with a branded version of their own, you would still receive micro payments from that user base. [And] the ownership of your components is transferable, meaning you can trade them through the blockchain.
Fermat’s P2P architecture is critical to create what we call the “Internet of People” and a more comprehensive P2P economy. Once you interconnect smart-phones between each other, a whole new universe appears, a parallel universe to the current web. And that space is so big that most commercial apps will have alternative P2P-version apps that benefit end-users with lower transaction costs achieved by even further disintermediation.
The on-demand and sharing economies have blossomed over the past several years. How would Fermat change them?
Fermat aims to automate the matching between buyers and sellers, riders and drivers, hosts and guests, and the like. Therefore, the “business of matching” might no longer be a feasible business model anymore, in any industry, if Fermat is adopted. Fermat users might still need third parties for many use cases, but their value will come primarily for services they provide beyond matching. Potential businesses that could work well include insurance, escrow, or background checks for systems similar to Uber. In just about any case, third parties would become optional, as there could always be pure P2O transactions alternatives.
Most real life transactions occur within local communities, which we want to support and empower.
Can you describe how Fermat will enable local P2P commerce?
Fermat is geo-localized for scalability reasons and because a critical task for Fermat is to create an internet that better matches the “real world.” Most real life transactions occur within local communities, which we want to support and empower. Many Fermat apps will target local P2P commerce; potential use cases include P2P classifieds or local stores.
Does the success of the vision depend on broad adoption of cryptocurrency… does it rely on Bitcoin?
No, Fermat does not depend on broad adoption of cryptocurrency since many Fermat apps do not require payments. However, a broad adoption of Fermat could impact cryptocurrency adoption because, as Fermat is bitcoin-enabled, it becomes extremely easy for Fermat app developers to integrate bitcoin payments on their apps.
Can local SMBs take advantage of what Fermat brings?
Yes, local SMBs will be able to have their shops on the Fermat network, where they can offer their products, sell online, or take orders. Local SMBs will be able to issue digital assets on the blockchain, in forms including discounts, vouchers, or coupons, distributing them among other local residents, setting up point redeeming systems, and all essentially for free (or for a tiny amount of Bitcoin only used to register digital assets on the blockchain).
Are you working on any solutions specifically targeted at the local space or is that up to the community?
Fermat is local-first as much as it is mobile first, because Fermat was developed to closely map reality. Your smartphone with Fermat will choose a “home node” physically nearby; this home node will easily be found by others on the local community and will allow for easy and rapid interaction. Perhaps counter-intuitively, this would also have a positive impact on privacy since you would not need to issue your communications with other locals through foreign country before come back, which is often how much of the information on the Web is currently transmitted, unless you currently live in the United States. Although it is possible to browse, connect, interact and transact with distant people, that is not Fermat’s main focus.
So will people be able to create their own Uber business and cut out, well, Uber? How would that would happen, and does this mean apps are not in the equation?
No, there will be an app, both for the passenger and for drivers. The Fermat network will facilitate the matching. Let me give you some examples:
Let’s say you have the “Ride Share Passenger” Fermat app and you request a ride. Your app will scan the local Fermat network for drivers close to you. It will connect to each driver’s app and exchange credentials. Soon, it will have a list of connected drivers and will request a quote to each of them on the list. Finally, it will order the list according to your pre-defined criteria; for example, by lowest cost, and will try to get a confirmation from the first taxi on the list, or the next if the first is not available anymore. In the confirmation, you will see on the screen the map with your taxi driving towards you. You might later pay in whatever currency acceptable and suitable to you both, which may include regular cash.
…there will not be a platform operator taking a percentage of the transaction, which means you can book and take your ride less expensively
As you can see, there are apps in Fermat that would look pretty much the same as the ones that you currently use. But in this case, there will not be a platform operator taking a percentage of the transaction, which means you can book and take your ride less expensively. Moreover, the Fermat network created, on the spot, a local marketplace of drivers ready to pick you up and bidding for your ride. It is hard to imagine something financially more efficient for you as a passenger — or for the driver, for that matter.
You mentioned “distributed apps” … what do you mean by that term?
Distributed apps run in parallel at several nodes of a network and collectively act as one app. In Fermat so far we have developed one of this kind: the App Store. This app manages a distributed catalog of all Fermat apps available for the end user to download. But as most apps will be localized, the apps readily apparent in the store will be only those which would make sense to the users of that region. When a user decides to install one app though this App Store it will grab some resources from other peers that already have that app installed. The network of all App Stores running in all devices together holds the full Fermat apps catalog.
What is the release plan for Fermat? When might adventurous SMBs get a chance to experience this?
We are running around a dozen projects at the same time; some are apps, some are lower level infrastructure. Some of these already reached alpha, some others are in earlier stages of development. However, in the Google Play Store store, you can already download the Fermat App to try out what’s been developed thus far. We hope some of these apps will be released by Q4 2016, including a P2P chat app and a bitcoin wallet app.