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OpenBazaar Set To Redefine Ecommerce

Sell Anything To Anyone

© by Pixabay

There is no question that E-commerce has come a long way in a span of two decades. But like any other sector that is information technology driven, it is subject to change. And it seems that the next phase of its makeover is here in the form of decentralization.

Open source, peer-to-peer, decentralized and liberal. At the center of this disruptive change is Bitcoin, a currency that can be used as a medium of exchange anywhere across the globe, and at a significantly low cost, as compared to conventional payment methods like credit cards. The cryptocurrency is even more feasible for the decentralized online markets when combined with technologies like escrow and reputation scoring.

Up until now, markets on the internet have had to rely on dedicated central servers to facilitate the matches between buyers and sellers. This has come with the cost of maintenance, converted into a higher retail price and offset to the consumer, which, of course, is way lower than what the brick and mortar stores charge.

The new era of e-commerce will see ordinary desktops serving as minute servers, acting as parts of a bigger server system, cutting the cost of doing business on the internet even further and giving consumers a direct person-to-person exchange platform; the advantage to the user is no fees.

This is big…

These markets are referred to as ‘the peer-to-peer online marketplace’. And one startup that has started pushing towards that direction is OpenBazaar. The Washington-based company is a brainchild of Amir Taaki, controversial bitcoin developer. Nevertheless, its list of founders now includes Brian Hoffman, Samuel Patterson, Washington Sanchez and Dionysis Zindros.

Andreas M. Antonopoulos the author of Mastering Bitcoin: Unlocking Digital Cryptocurrencies, one of the first books published to explain the Blockchain technology, has said that “This is going to be big…”

GMacGuffin, a commentator on Techdirt has described it as a place where anyone “can sell anything they want directly to anyone else they want.”

Indeed, with centralized markets like eBay, there is always someone to decide what can and what cannot be sold. But since is a decentralized P2P marketplace, and out of control of anyone, the risk of illegal products passing through it seem to be high.

That, of course, conjures up the memories of Silk Road, a dark website (was only accessible through TOR) where everything from drugs to illegal weapons could be procured for a price in bitcoins. The site was shut down by FBI agents in mid-2013 and its founder, Ross Ulbricht arrested in October the same year. He is currently in prison serving a life sentence on money laundering and attempted murder charges.

Aside from the fact that it is not a native of the deep web, another aspect that differentiates OpenBazaar from Silk Road it that it is decentralized, which means there is no server to unplug and thus take it offline. When they say “this is big deal” this is why. A marketplace which cannot be censored has significant implications towards civil rights and the power of an individual. You are now free to exchange with anyone globally, no middle men, no censorship.

The unknown factor which is essential in the success of OpenBazaar will be reputation of its participants and moderators. Whilst transactions are always sent via a third party arbitrator (escrow), the adjudication of events which can’t be quantified (goods poorer quality than described) will be an important factor in establishing the reputation of the participants and the platform itself. Whilst the technology is revolutionary, its success in the eyes of the users is yet to be established.

A few shouldn’t stop many from enjoying technology

OpenBazaar has explained in a blog post that, just like in real world, the task of tracking, stopping and prosecuting traders who engage in criminal activities is the responsibility of law enforcers. However, that should not in any way interfere with those abiding by the law from benefiting from innovation.

You would expect that no venture capital will even consider putting its money in an idea like OpenBazaar. But guess what, Andreessen Horowitz and Union Square Ventures, two of the most successful venture firms, have jointly put about $1 million in the project.

All said, if regulators do not find both the reason and the means to interfere with OpenBazaar, especially at this early stage, then there is nothing that stops decentralized e-commerce being the future of business. Peer-to-peer decentralized programs are about to join the zeitgeist