What began as an award-winning concept for a peer-to-peer (P2P) marketplace could turn into a revolution in e-commerce.
OpenBazaar is set to take the stage at this weekend’s Bitcoin in the Beltway conference, a Washington, DC-based event that will bring together digital currency leaders and thinkers including Charlie Shrem and Vitalik Buterin. There, project maintainer Brian Hoffman will lead a discussion on the much-hyped decentralized market project.
The concept, formerly known as DarkMarket, won the Toronto Bitcoin Expo Hackathon in April for demonstrating a fully functional P2P market platform with robust decentralized infrastructure, one that enables commerce to take place without the risk of outside actors disrupting the service.
Hoffman told CoinDesk that the central value proposition for OpenBazaar is the freedom of two parties to engage in a transaction without having to rely on the security and integrity of a questionable centralized network.
Furthermore, he rejected the notion that a decentralized marketplace is inherently a hotbed for illegal activity, saying that OpenBazaar will push for lawful uses of a type of platform that was made famous by illicit black marketplace Silk Road.
“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.”
OpenBazaar uses bitcoin as a medium of exchange, contributing to the decentralized nature of the platform.
Challenging traditional e-commerce
Hoffman says that OpenBazaar is about enabling the exchange of goods or services for money without the hassle of using a risky centralized exchange.
With a network unbound from interference from any authority, users can conduct business over the platform without paying any transaction fees or maintenance costs. Hoffman said that “our approach is to take that corporate, profit-taking model out of [e-commerce]”.
As Hoffman told CoinDesk in April, when OpenBazaar first rebranded:
“I’m trying to help sellers save money on transaction and payment processing costs, and open up new customer bases. There’s a lot more here than drug or gun sales.”
He clarified that regardless of what people are using the site to sell, OpenBazaar won’t charge fees. This, Hoffman said, can help merchants who want to expand online avoid the expenses associated with traditional online commerce tools.
Hoffman acknowledged the concerns of some about the types of activity that are attracted to commercial platforms that lack any authority. He stated that the OpenBazaar team will be “listing agnostic” when it comes to the products or services sold over the site, leaving what is exchanged up to the community itself.
Additionally, he reiterated that the marketplace will be aimed at legitimate uses, saying that OpenBazaar won’t be pitched to those who might be tempted to use the platform to sell drugs or other illicit goods.
“Our approach is going to be more of like an eBay mentality, where we say that everything is good, come use us as a tool and get yourself set up and exchange whatever you choose to.”
He added that the nature of P2P transactions is to be outside of centralized control. As such, the team behind OpenBazaar doesn’t plan to take a role in censoring or limiting behavior that may take place.
Hoffman said that currently, the development team is pushing for functionalities that would enable a variety of commercial actions for users. This includes smart contracts and P2P lending.
Notably, OpenBazaar is moving to put in place a P2P arbitration process that will enable users to establish figures of authority that can help certify transactions and settle disputes between users.
Hoffman compared this to the arbitration process on centralized platforms, which often leaves those involved in the dark when decisions are made, saying:
“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.”
Instilling user trust
On a more immediate level, OpenBazaar can help those who are using questionable markets to trade goods and services avoid instances of fraud or theft.
“Right now, there’s a lot of people using these closed dark markets that have been built with a lot of risk for the user, with escrow, [and questions of] where the site holds it. So, our benefit is that’s its completely different – the trust will be in the hands of the user.”
This also fits into the non-profit nature of OpenBazaar, which enables users to avoid using services that charge predatory fees for hosting transactions for buyers and sellers.
Overall, the platform could provide a means for online buyers and sellers to avoid the risk of costly scams and focus on what Hoffman says people should be free to do: engage in commerce without barriers.
E-commerce image via Shutterstock