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Network marketing, also known as multi-level marketing, is a business model that involves a pyramid structured network of people who sell a company’s products. The users in this network are usually rewarded on a commission basis. That is, members in this MLM platform get a commission every time they perform the specified task, like –
Make the sale of a product.
Their members make a sale of the product.
In simple words, this MLM business model involves a pyramid format of non-salaried participants who get paid whenever they or a person below them in the pyramid makes a sale.
In this system, consumers are the participants, their family, friends, and associates are their customers, and this cycle goes on.
Early MLM business had limitations, however, they opened up new opportunities for their members.
Today, we’re watching a new cycle of MLM business development with the emergence of blockchain-powered smart contract technology. Blockchain technology disrupting nearly every industry, it provides new opportunities for MLM business also, changing how we make transactions online and in our everyday lives.
If you manage an MLM business, then we suggest considering how the blockchain-powered smart contract will impact MLM business. We should start with an obvious question:
What’s the Blockchain-Powered Smart Contract in MLM Business?
The blockchain is a platform-like technology that covers of a decentralized ledger that records, verifies, and tracks cryptocurrency transactions and smart contracts between parties.
Blockchain-based or decentralized MLM business, in turn, are peer-to-peer networks that directly connect members without any intermediaries.
Since a blockchain-based MLM business removes intermediaries, all transactions are traceable on a public ledger, demonstrating a high level of security and transparency.
In addition, blockchain technology involves smart contracts – digitally signed agreements made via distributed computing platforms like Ethereum. Smart contracts are stored publicly, preventing fraud.
If smart contracts can empower the MLM business, then there is no chance for MLM business owners to scam their members.