04 Oct Can OpenBazaar Revolutionize E-Commerce?
DECENTRALIZED MARKETPLACE FOR INSTANTLY TRADING WITH ANYONE USING BITCOIN
Open Bazaar seems to be an ambitious bitcoin startup by Angel Leon and Brian Hoffman, developers who aim to create a decentralized, police-proof online market place where user can sell literally anything using bitcoin. The startup plans to decentralize the traditional e-commerce and plans to bring power back in hands of customer by kicking middlemen out and zero transaction fees. The buyer and seller can censor transaction as well as disclose information they want to, which keeps his identity secure and decreases the mishaps due to card theft.
The startup recently raised $1 million in seed funding from Union Square Ventures, Andreessen Horowitz, and angel investor William Mougayar. The CEO, Brian Hoffman, plans to use the money to speed-up their project’s development. Which, had beenannounced year back, has still fallen short of meeting the expected deadline. It, according to Hoffman, was mostly due to the absence of round-the-clock workers that can invest their unshared concentration to the project.The project is in beta 5.0 and its updated every month
Unveiled during the 2014 Hackathon, Open Bazaar captured everybody’s imagination for amalgamating file-sharing technology with Bitcoin to create an eBay-like decentralized marketplace. Soon after its introduction, the OpenBazaar project gained support from the Bitcoin community who were always open towards backing decentralized technologies.
HOW DOES IT WORK?
Lets say you are planning to sell a phone using openbazzar website or app, you create a new product listing on your computer like you do like on amazon or olx, and ask for a price in bitcoin. When you publish that listing, it is sent out to the distributed p2p network of other people using Open Bazaar. Anyone who searches for the keywords you’ve used—mobile, tablet, electronics, etc.—will find your listing. They can then accept your price, or offer a new price.
If you both agree at a price, the client creates a contract between both of you with the help of your digital signatures, and sends it to a third party called a notary. In the case of a dispute an arbiter can be brought into the transaction. 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.
The buyer then sends the amount agreed upon to the multisig address. You receive a notification saying the buyer has sent the funds, and you can ship the mobile to them and mark that it has been shipped. The buyer would receive it a few days later, which they mark as received, which releases the funds from multisig to your account. You have Bitcoin, the buyer has his laptop; no fees paid, no one stopped your trade, everyone’s happy.
Openbazzar is a project that can change how people view at e-commerce. Amazon, e-bay and other e-commerce sites will have to be very careful planning out their next strategy, as the project openbazzar could prove to be a big competition for them. Decentralized ecommerce is just a small glimpse into the future, we may see a decentralized uber or a decentralized airb&b. Wholesalers shall be trading directly with retailers across the world, being able to find each other and transact without incurring listing fees or forex issues making global trade more efficient than ever. Simply being able to list and sell anything you’d want to sell to others just by using an app is as easy as it gets. But only time will tell if it will become another silkroute 3.0 or not, we have hopes pinned on the sites preset regulations.