What is it?
It is a decentralized marketplace for instantly trading with anyone using Bitcoin. Here is a youtube video you can watch that will explain it further:
Everything old becomes new, long ago bazaars were the center of trade, people interacted with each other directly in their local marketplace. There were no middlemen telling them what to sell, how much to charge.
We live in a different era, even though the internet is global governments and corporations are restricting free trade. They collect your data and violate your privacy, censor transactions, and take their own. Its time to take control back, OpenBazaar is a free and open market for the digital age. No censorship, no fees, no middlemen, just the freedom to exchange directly with each other.
OpenBazaar looks like a direct competitor to eBay, we are familiar with the strict policies of eBay and how they side with the buyer, they take hefty fees and together with PayPal they maintain complete control over the market. They are the middleman in the transactions between buyers and sellers and the fund’s are at their mercy to do as they please. eBay is also trying to take a bite into the Bitcoin market by issuing patents in order to centralize Bitcoin. OpenBazaar is in a way trying to stop one of the 4 biggest threats to Bitcoin, by combating the attempt of various corporations to monopolize and centralize Bitcoin.
OpenBazaar looks to minimize fees, and minimize regulation of the market. While it sounds like a great idea which would benefit the buyer and the seller, they will face a hard time passing government regulation when it comes to their business. Auction businessed must have KYC (know your customer) regulations which help identify fraud and scams, will OpenBazaar also adhere to those regulations? If it will not then it will be simply another version of the SilkRoad. Thus, OpenBazaar is a direct competitor to eBay and Paypal. There lies one problem, the transaction volume of Bitcoin is nothing compared to the one of Paypal. You can see the ditribution of daily market volume HERE. Because the daily transaction volume of Bitcoin is much smaller OpenBazaar might have a hard time at first, but once Bitcoin’s volume increases they should have no problem directly competing with PayPal.
OpenBazaar will not adhere to those regulations. OpenBazaar is a protocol and trading platform, not a business and not even an arbitrator. It is up to individuals to comply to local laws and their own consciences.
It is an interesting loophole that if OpenBazaar acts as a nonprofit service available to the public, comparable to craigslist it will be able to avoid any regulation. Unlike craigslist, OpenBazaar is not a centralized entity, it is more of a protocol such as bitcoin, bittorrent, TCP, etc. OpenBazaar could base their business model on craigslist’s because essentially it is the same service except with Bitcoins.
The concept of a functional P2P market platform which OpenBazaar runs on was originally based on the DarkMarket, which won the Toronto Bitcoin Expo Hackathon in April. The main mission of OpenBazaar is to enable two parties to engage in a transaction without having to rely on the security and integrity of a questionable centralized network (i.e eBay).
Hoffman, who is the project maintainer at OpenBazaar reflected at the notion that a decentralized marketplace is a hotbed for illegal activity (referring to the SilkRoad here), he said that OpenBazaar will push for lawful uses of it’s service.
“We’re going to try and make sure that the product has a very positive impact and goal. We’re going to try to encourage people to use it in a legal, positive way.”
How trust is built
Unlike in a centralized trading platform where the trust is instilled in a questionable centralized authority, in OpenBazaar the user will be able to establish figures of authority that can help certify transactions and settle disputes between users.
Hoffman compared this to the arbitration process on cetralized platforms which leaves those involved in the transactions without any say in the dispute since the centralized authority has all the power.
“Now, you’re going to be able to set up your own trusted peers, people that are on the network as arbiters, and use them so you don’t have to rely on some centralized group.”
OpenBazaar aims to provide a service that is nonprofit. Thus, the code is open source and is available to view on GitHub. For more information and if you would like to donate or help OpenBazaar please visit their forums