OpenBazaar is the only decentralised peer-to-peer network, which means there are no listing fees and the marketplace is censorship-resistant.
1. What is OpenBazaar?
OpenBazaar is a new way to buy and sell goods and services online. By running a program on your computer, you can connect directly to other users in the OpenBazaar network and trade with them. The network isn’t controlled by a company or organisation. OpenBazaar is a decentralised peer-to-peer network, which means there are no listing fees and the marketplace is censorship-resistant.
Goods and services are bought and sold on OpenBazaar using Bitcoin, a digital cryptocurrency that is decentralised and censorship-resistant. Transaction fees on the Bitcoin network are very cheap.
Bitcoin and OpenBazaar together make online commerce cheaper and more free than ever before.
Right now, online commerce means using centralized services. eBay, Amazon, Alibaba and others have restrictive policies and charge fees for listing and selling goods. They only accept forms of payment that cost both buyers and sellers money, such as credit cards or PayPal/Alipay. They require personal information, which can lead to it being stolen or even sold to others for advertising or worse. Buyers and sellers aren’t always free to exchange goods and services with each other, as companies and governments censor entire categories of trade.
OpenBazaar is a different approach to online commerce. It puts the power back in the users’ hands. Instead of buyers and sellers going through a centralized service, OpenBazaar connects them directly. Because there is no one in the middle of the transactions, there are no fees, no one can censor transactions, and you only reveal the personal information that you choose.
This project is open source, which means the code is publicly available for people to review or audit, as well as contribute code to make it better.
1.1 What does it do?
- Creates an online store for users to sell goods for Bitcoin
- Connects these stores directly to each other on a global network
- Users can browse individual stores and search for products across the whole network
- A buyer directly connects and purchases the good from the merchant using Bitcoin
- Bitcoin payments can be made via escrow to protect merchants and buyers during trade
1.2 What does it enable?
- An online marketplace that is:
- Scalable to millions of stores
- Free of intermediaries and their fees
- Without a central point of control or failure
- Frictionless trade
1.3 What problems does it solve?
- Hosting an online store
- Easy to deploy
- Install and run
- Eliminates fees related to listing on a platform
- Significantly reduces payment fees via Bitcoin (i.e. fractions of a cent)
- Dispute resolution + Creates a market for dispute resolution
1.4 What is the philosophy of the project?
- Our vision is to make trade free.
- Our mission is to shift global trade onto a decentralised platform, OpenBazaar.
- Our values are:
- Users should full control their data
- Users should have freedom to reveal as much personal identifiable information as they want, when they want
- Crytographic tamper-proof agreements to: 1) minimise potential disputes, and 2) fast-track dispute resolution
- Free and open markets
- Creating open and competitive markets for services in OpenBazaar that cannot be perfectly solved with technology
- Bitcoin is the only transactional currency of OpenBazaar
The mission of OpenBazaar is to give everyone in the world “the ability to directly engage in trade with anyone in the world for free,” says Brian Hoffman, the project’s 33-year-old project leader. A peer-to-peer network for selling goods online, OpenBazaar runs on open source software that users download and install on their computers, which is similar to a BitTorrent client. The client connects them to the OpenBazaar network, where they can trade with other users. It’s like eBay without eBay. All items are paid for using bitcoin.
“OpenBazaar doesn’t have a central point of failure,” explains OB-1 co-founder Sam Patterson. “Everyone using it is a node in a completely distributed network. If you take one user off the network, it has no impact on any of the other users.” Last year, OB1, the company that’s developing the OpenBazaar network, got a million dollars in venture capital from Union Square Ventures, Andreessen Horowitz, and investor William Mougayar.
Since OpenBazaar has no intermediaries and no built in mechanisms for stopping a transaction from taking place, critics say it could become an ideal marketplace for stolen goods and illegal drugs—sort of a decentralized version of Silk Road. Hoffman isn’t concerned. “If we work hard to allow users to self-police, to do things legally, properly, easily, cheaply,” he says, “they will rush in and overwhelm whatever could possibly come in from the dark side of the internet.”