Commerce was not always conducted the same way as it is today. People used to freely trade with one another without restrictions, fees, and regulations. As societies grew, decentralized trade was replaced with organized marketplaces. With the added convenience came a gradual loss of freedom.
Currently, the vast majority of commerce that goes on in the world happens through centralized payment processors, and large Internet-based marketplaces, such as eBay and Amazon in the US, Alibaba and JD.com in China. These intermediaries limit the type of goods that can be exchanged and charge users fees for using their services.
OpenBazaar, a Bitcoin-powered project, wants to put the power back in the users’ hands by becoming the first truly decentralized marketplace in the world.
What Is OpenBazaar?
The project was first introduced by Amir Taaki and a team of other developers in April 2014 at a Toronto Bitcoin Hackathon under the name “DarkMarket”. The seizure of the online marketplace Silk Road sparked the development of OpenBazaar.
That being said, the creators of OpenBazaar are not trying to create another Silk Road (darknet market). Instead, they want to leverage existing technologies to integrate more people into the global economy in a peer-to-peer fashion. Unlike Silk Road or eBay, the network would not be controlled by a single party or company, but it would let users run the necessary software on their local computers, allowing them to connect directly with one another. This means that trade cannot be stopped from occurring and the marketplace is absent of fees or restrictions.
One of the great features of OpenBazaar is how easy it is to get started: Users just have to download a program on their computer. Using this program, they can register as either buyers, sellers, notaries, or arbiters. After a user fills out their profile, it is time to shop for goods and services from sellers worldwide.
What Is Sold on OpenBazaar?
Everything. Well, not yet. Probably the main appeal of OpenBazaar is the fact that there are absolutely no restrictions on what users may sell. This actually makes perfect sense in the global context, even though it may suggest illegal activity. Some items that are restricted or banned in one country are completely legal in another. If OpenBazaar decided to enforce these restrictions, they would just duplicate the existing infrastructure, thus failing to live up to their original idea.
If you take a look at the list of current top items, you will see a healthy mix of virtual and physical products. There are stickers, music CDs, waffles, chili seeds, online accounts, and many other items. It can be argued that users are currently experimenting with OpenBazaar, rather than using it seriously. Most stick to small items, such as postcards, cigarettes, and t-shirts. However, if OpenBazaar takes off, we expect the number of listings to grow exponentially.
How Is OpenBazaar Different from eBay?
In the long run, OpenBazaar will be more appealing than eBay because: it does not charge fees, is entirely decentralized, trades are outside the purview of a central governing body, and allows for payment using a multitude of cryptocurrencies (list is growing). These days, eBay charges 10 percent, which can add up to a hefty amount over time. Sellers can immediately increase their revenue by over 10 percent by simply switching to OpenBazaar. Although this may be tempting, we would suggest to sellers to maintain an established presence across multiple platforms as OpenBazaar does not have an installed customer base yet, and this will affect projected demand for the seller’s products.
The recent public launch of OpenBazaar revealed that the platform is still very much in development and it will be a work in progress for the foreseeable future in 2016. However, the initial beta and alpha versions of eBay and Amazon suffered from the same challenges during their infancy and this is in line with expectations.
Reviews on OpenBazaar
According to Brian Hoffman, the founder of OpenBazaar, “the idea at first will be to focus on users who need Bitcoin the most and so we are likely to see it grow in places where banking is bad, incumbent marketplaces are restricted or in goods and services that are unique and not so mainstream.”
Later, Brian and his team of developers want to focus on bringing in as many merchants as they can. To do so, they have to provide them with a problem-free service and features that are worth the transition. The initial wave of reviews of OpenBazaar reveals that they may be on the right track, and it will be exciting to see how far they can take this revolutionary project.