OpenBazaar Sets Its Sights On Ebay And Amazon

At the core of OpenBazzar is the ideology that markets should be free and open. In a truly free market prices for goods and services are set by the forces of supply and demand, prices are allowed to reach their point of equilibrium without intervention by government policy. A free market economy typically includes support for highly competitive markets and private ownership of productive enterprises.

OpenBazaar started as fork of what was once DarkMarket. Originally the concept was developed as a hackathon project by Amir Taaki, now the lead developer for Dark Wallet. It was the product of an idea to combine disruptive technologies such as peer-to-peer networks, Bitcoin and messaging in order to achieve an open, decentralized marketplace.

“OpenBazaar is an open source project to create a decentralized network for peer to peer commerce online—using Bitcoin—that has no fees and cannot be censored. Put simply, it’s the baby of eBay and BitTorrent,” – Brian Hoffman Project Lead.

Hoffman has set some lofty targets, he told BNC OpenBazaar is aiming for the people who use Amazon and eBay. This would provide the project with a core set of experienced online retailers who understand the pros and cons of e commerce sites. The open source nature of OpenBazaar provides retailers flexibility and transparency.

“The core idea is that it’s important that individuals keep control of their online business. That includes buying and selling. We put too much trust in third parties because they make it so easy. Convenience trumps security and privacy. We want to show that you can have your cake and eat it too. One of the pillars of the OpenBazaar project is usability and user first focus.” – Hoffman

Amazon and e-Bay operate on centralized servers, and require accounts to be set up by their users. These accounts hold a lot of sensitive information, a hackers dream. Credit cards, home addresses, trading reputations and so much more. According to the latest US Department of Justice figures, in 2012 direct and indirect losses from identity theft totaled $24.7B USD.

The platform Hoffman and his team are constructing requires none of the personal information held by traditional online markets, this raises plenty of issues regarding trust and illicit trade. Hoffman describes the project as an agnostic trading platform:

“[OpenBazzar is] aimed at everyone not just those looking to sell a dime bag online. We are building a tool. Tools are used however a user wishes and they are the ones who face the scrutiny if they choose to misuse it. These technologies are new and scary to authority but I think there’s always pros and cons and we just need to keep focusing on the pros and doing what we do and hopefully the dialogue changes for us,” Hoffman

By decentralising online markets, OpenBazaar has some key trust issues to resolve. The risk is now firmly with the buyer. To offset this risk the platform has included seller ratings, with a proof of burn reputation pledge, and notaries as arbitrators in multsig transactions.

The reputation pledge is primarily meant to help mitigate Sybil attacks, wherein a reputation system is subverted by forging identities in peer to peer networks.

“If you see a user on the OpenBazaar network and they haven’t made a reputation pledge, you should take any positive reviews with a large grain of salt… especially if the reviewers don’t have any reputation pledges themselves. If a user has a 0.01 BTC reputation pledge and has several positive reviews for other users who also have reputation pledges, then their reputation can be taken with a significantly smaller grain of salt In no way is the reputation pledge our entire reputation system. Rather, it is one component of it… actually the entry point.” – OpenBazzar

A third party notary is used to arbitrate the process. If a dispute arises between two parties an aribiter is brought in to settle any potential issues. The unique aspect of this is that the arbiter and notary are part of the OpenBazaar network, so it is in the communities best interest that any problems be resolved fairly.

“These third party notaries and arbiters are also folks on the OpenBazaar network—could be your neighbor or someone across the world—who the buyer and seller trust in case something goes wrong. The third party witnesses the contract and creates a multisignature Bitcoin account (multisig) that requires two of three people to agree before the Bitcoin can be released,” – OpenBazaar

Those who want to take part in the peer-to-peer decentralized market can download the OpenBazaar client, much like a bittorrent client. The user can create their listing and publish it across the OpenBazzar network. Any keyword related to a product that a buyer searches for will return relevant listings, and the agreement between the two parties can begin.

Unlike Amazon or eBay, OpenBazaar is a non-profit community driven project.  Funding, advises Hoffman, is currently provided by donations made to the project, with development being driven by the community.

“We regularly have around 100 people in IRC, 1024 stars on GitHub, tons of code submissions from dozens of contributors worldwide and a great core dev team that is super passionate about the project,” Hoffman

OpenBazaar are about to shift into their beta 4.0 and are looking forward to the potential and growth. When asked about the feedback on their 3.0 Hoffman responded to BNC saying, “Feedback has been great but also sobering. We have a long ways to go but I think we are up to the challenge and plan on working hard through the next year and hopefully this time next year we will be watching free trade flourish around the world on OpenBazaar!”

B.Holmes, author of The Range of Illusion and The Private Key installments, is currently located in Thailand, researching and writing about crypto. You can follow B.Holmes on twitter @BanteringB.