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P2P Platform Model (marketing)

2000

The Peer-to-Peer (P2P) platform model is a technological and business framework that directly connects individuals to transact with each other, bypassing traditional intermediaries. In the sharing economy, these platforms facilitate the exchange of goods, services, or capital. They typically provide the underlying infrastructure, including search functionalities, payment processing systems, and crucial reputation and trust-building mechanisms.

The P2P platform model functions as a two-sided or multi-sided market, creating value by enabling interactions between two or more distinct but interdependent groups of users. For example, a ride-sharing platform connects drivers and riders. The key challenge and source of power for these platforms is the network effect: the value of the service increases for every user as more users join the platform. More riders attract more drivers, which in turn improves service for riders, creating a virtuous cycle that can lead to market dominance.

Technologically, these platforms are complex systems that must manage user profiles, listings, search and discovery algorithms, real-time communication, secure payment gateways, and data analytics. They are fundamentally data-driven, constantly collecting and analyzing user activity to optimize pricing, matching, and user experience. This disintermediation—the removal of traditional middlemen like taxi companies or hotel chains—is a core feature, often leading to lower prices and greater efficiency. However, the platform itself becomes a new, powerful intermediary, controlling the rules of the market, setting commission rates, and owning the valuable user data. This has led to significant debate over their classification, market power, and the labor status of service providers who use them, often termed ‘gig workers’. The model’s architecture is increasingly being explored in a decentralized fashion using blockchain technology to reduce the power of the central platform owner.

UNESCO Nomenclature: 3301
– Computer science

Type

Software/Algorithm

Disruption

Revolutionary

Utilisation

Widespread Use

Precursors

  • the invention of the internet and world wide web
  • early e-commerce websites like Amazon and eBay
  • development of secure online payment systems
  • P2P file-sharing technologies like Napster
  • social networking platforms

Applications

  • decentralized finance (DeFi) platforms
  • online marketplaces like Etsy and eBay
  • ride-sharing apps like Uber
  • crowdfunding platforms like Kickstarter
  • vacation rental sites like Airbnb

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Related to: P2P, peer-to-peer, platform economy, two-sided market, network effects, disintermediation, online marketplace, gig economy

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