
Sneak Peek at Bitcoin's Upcoming Killer App – Open Bazaar - nissimk
http://bravenewcoin.com/news/sneak-peek-at-bitcoins-upcoming-killer-app-open-bazaar/
======
SamPatt
Hey everyone, I'm Sam and I work on the OpenBazaar project. Happy to answer
questions if anyone has them. Looks like their site is down, here's a simple
overview:

[https://blog.openbazaar.org/what-is-
openbazaar/](https://blog.openbazaar.org/what-is-openbazaar/)

We're getting close to launch and we'd love as many eyes on the code as
possible.

Here's our backend, built in Python:

[https://github.com/OpenBazaar/OpenBazaar-
Server](https://github.com/OpenBazaar/OpenBazaar-Server)

And our client:

[https://github.com/OpenBazaar/OpenBazaar-
Client](https://github.com/OpenBazaar/OpenBazaar-Client)

If you want to try it yourself I recommend you join our Slack and ask for
help. We're building installers and packages now but I'm sure most people here
could handle the manual installation process if they're curious. You can
invite yourself to the Slack here:

[https://openbazaar-slackin-drwasho.herokuapp.com/](https://openbazaar-
slackin-drwasho.herokuapp.com/)

Cheers!

~~~
roymurdock
So if I understand correctly, OpenBazaar will be shifting costs from a central
verification and fulfillment agency (Amazon, Visa, etc.) onto the buyers,
sellers, and moderators of the market?

Buyers will have to spend more time researching vendors _and_ moderators, then
agreeing with a vendor on a moderator which will be difficult as no moderator
can be 100% impartial and the largest 5-6 (that will develop due to natural
economies of scale) will develop their own brands and reputations for being
easy on buyers, easy on sellers, random coin toss, etc. Where is this cost
made up for the buyers - will they see lower prices? Wouldn't it be more
expensive as moderators need to be compensated for their services?

Also, from the pitch deck linked in the article [1] slides 48-51:

 _What about moderator reputation? Difficult problem to solve as there will
always be on party that is happy with the result, and one that is unhappy.
Transparency is the best approach...Negative or positive consensus on the
quality of dispute resolution will inform Vendors and Buyers_

How can there be a consensus on a moderator if one party is always happy and
one is always unhappy? Won't the consensus always be 50/50?

Also, how do you plan to scale up transparency? Is that mostly a UX/UI
challenge, or is there some clever mechanism to solve this through
cryptographic/social hacking?

Last question: How will the leadership/dev of OpenBazaar be structured in the
future? Will you guys develop something similar to the Linux Foundation under
a non-profit charter? Will the foundation enact a transaction fee to fund
itself?

Sorry for the barrage - just extremely interested as someone who has studied
Bitcoin/blockchain tech in the past.

[1] [http://www.slideshare.net/drwasho/openbazaar-ratings-
reviews...](http://www.slideshare.net/drwasho/openbazaar-ratings-reviews-and-
reputation)

~~~
SamPatt
>So if I understand correctly, OpenBazaar will be shifting costs from a
central verification and fulfillment agency (Amazon, Visa, etc.) onto the
buyers, sellers, and moderators of the market?

Yes. I try to explain this a bit more here:

[https://www.reddit.com/r/Bitcoin/comments/3zv6sc/sneak_peek_...](https://www.reddit.com/r/Bitcoin/comments/3zv6sc/sneak_peek_at_bitcoins_upcoming_killer_app_open/cype35n)

> Where is this cost made up for the buyers - will they see lower prices?
> Wouldn't it be more expensive as moderators need to be compensated for their
> services?

Yes, we expect lower prices would be the main draw for buyers. The price
shouldn't be made up with moderation since moderators are only paid for
services rendered - if there's no dispute then they aren't even aware of the
transaction happening.

>How can there be a consensus on a moderator if one party is always happy and
one is always unhappy? Won't the consensus always be 50/50?

What Dr. Sanchez is trying to get at is the fact that text reviews from other
parties (and explanations from the mod) will be publicly viewable. That would
allow a prospect to review them and see which side they think is more
legitimate.

We recognize that decentralized reputation systems are basically the holy
grail of p2p systems and we don't even pretend to be solving the problem, only
giving users some information to make a more informed decision. I expect that
many moderators will choose to publicly identify themselves and use their IRL
reputation as well.

>Last question: How will the leadership/dev of OpenBazaar be structured in the
future? Will you guys develop something similar to the Linux Foundation under
a non-profit charter? Will the foundation enact a transaction fee to fund
itself?

No transaction fees. It's open source, so even if we wanted to do this it
would likely fail because people could always fork it and remove the fee.

Right now many of the core devs are a part of a company called OB1 (I'm a co-
founder). We received $1 million from Union Square Ventures and Andreessen
Horowitz in order to lead development of the platform, push for network
adoption, and then offer services to users on the network.

~~~
roymurdock
Cool, thanks for the response. You guys clearly know what you're getting into.
Also thanks for the transparency on Union Square Ventures and Andreessen
Horowitz - makes sense as Horowitz is probably the biggest bull out there on
blockchain tech, which is pretty smart IMO.

One last question - how big is the potential market? That is, what is your
estimate of the amount that Amazon spends on buyer/fraud protection services
as a percent of their yearly revenue? Is that increasing or decreasing?

To me it seems like the key will be maintaining neutrality for as long as
possible. Which should be reasonable as long as you continue to secure
altruistic funding (ala Horowitz) from entities that are not looking for an
exit on the short-medium timeframe.

~~~
narrowrail
>as long as you continue to secure altruistic funding

I've never heard of VCs being described as altruistic, and it is very far from
my experience. Is this something people believe?

Also, asking, "how big is the potential market?" seems inappropriate, but
ymmmv.

~~~
roymurdock
Once someone accrues enough money, they start to think about their personal
legacy - case in point, Bill Gates. Horowitz could be thinking along similar
lines if he is willing to be the patron of the blockchain in order to change
the future of decentralized markets/fintech forever.

I've got my own estimates of the size of the market, was hoping to compare,
but you're right - that's pretty sensitive info that the company probably paid
for in order to pitch investors.

------
wolfman1
Great comment explaining what OpenBazaar may become -
[https://www.reddit.com/r/Bitcoin/comments/3nlg5g/is_openbaza...](https://www.reddit.com/r/Bitcoin/comments/3nlg5g/is_openbazaar_one_of_the_bitcoin_killer_apps/cvph3d3)

"Interesting. This isn't just a decentralized marketplace, there seems to be
something bigger going on. If you look closely at the screenshots, you will
see there seems to be a social integration within it too. Notice there is the
ability to follow stores. I'd imagine that would mean there will be a feed to
consume all the new items and content from the stores you're following too.
This isn't going to be the application you pop in to buy something once a
month with Bitcoin, it's going to be a social platform with commerce layered
in that you visit every day.

This seems like what every artist, social media star, author, photographer,
musician, etc needs. Build a strong following, post an update of a new song,
content or anything and people can pay to play/read it right away. New types
of pay to read blogs will likely start to emerge in the market. New social
media stars will emerge by creating edgy stores where people can pay them to
do/draw/write/sing/play/cook/photograph/wear/eat certain things. A new social
channel will come to life and the content and stores will be like something
we've never seen on the internet before. It's going to be very very
interesting people.

This is huge!"

~~~
ycmbntrthrwaway
What I am concerned about is my privacy. Bitcoin is not so anonymous: whoever
you pay will know your bitcoin address. And even if you create pseudonyms,
money can be traced unless you use some mixes and "money laundry" services.

As for buying photographs it may be ok, but I would not pay for news articles
(such as LWN, for example) with non-anonymous account.

~~~
wyldfire
Interestingly enough, satoshi's paper never mentions the term "anonymous"
though it does describe separating one's identity from the transaction.

Some other cryptocoins (Monero, et al) use ring signatures to truly disguise
the path that the money takes through the system.

~~~
ycmbntrthrwaway
Recently HN discussed Chaum's ideas [1] and DigiCash [2]. His ecash [3] system
was going to be something like an anonymous Google Wallet. Bitcoin wins in
being decentralized, it does not need a bank or Google to issue electronic
cash and guarantee that you can eventually get real money in return. But it is
not anonymous.

[1]
[https://news.ycombinator.com/item?id=10850192](https://news.ycombinator.com/item?id=10850192)
[2]
[https://cryptome.org/jya/digicrash.htm](https://cryptome.org/jya/digicrash.htm)
[3] [https://en.wikipedia.org/wiki/Ecash](https://en.wikipedia.org/wiki/Ecash)

~~~
wyldfire
I don't know why you brought that up, because it's not exactly what I was
talking about. But it's interesting.

------
officialjunk
bitcoin itself once had a market built in that was removed by satoshi in this
changelist:
[https://github.com/bitcoin/bitcoin/commit/5253d1ab77fab1995e...](https://github.com/bitcoin/bitcoin/commit/5253d1ab77fab1995ede03fb934edd67f1359ba8)

~~~
LukeHoersten
I've never seen that before. Thanks for pointing to the revision. Very cool.

~~~
officialjunk
must have been a bittersweet valentines day for satoshi too ;)

------
pbreit
Is there a nickname or law describing the pre-announcement of something being
a killer app that essentially predicts its doom?

~~~
SamPatt
To be fair, I'm an OpenBazaar dev and I don't think anyone on our team is
calling this the killer app of Bitcoin.

Of course we have great faith in it, and expect it will be a great match for
Bitcoin (decentralized markets for decentralized money) but we're not claiming
this is the project to end all other Bitcoin projects.

It's great to see so many people excited about it though.

~~~
pbreit
I hear ya. Self-proclaimed, which I didn't really mean to imply here, would be
even worse.

------
lumberjack
Early on in 2009-2013 there was a lot of hype in the Bitcoin community over
this. Lots of people (including myself) worked on Bitcoin marketplaces and
most of them were marketed primarily to sellers because lots of Ebay sellers
feel cheated by Ebay. But that is precisely the selling point of Ebay/Paypal.
It's a buyer's market so Ebay/Paypal made the correct decision to be biased
towards the buyers and that worked very well for them. My friends started
buying on Ebay because everybody was assuring them that there was no risk to
it. I took the leap as well precisely because of that reason.

I don't think escrow is a better preposition even if it is nominally cheaper
(there is of course more risk involved, it takes longer and is more
complicated, but it is also more private; not sure if it would be overall
cheaper when considering all the above).

I'd be glad if someone finally managed to take on Ebay but I don't have high
hopes. At most people have managed to fill in some niche where Ebay is doing a
poor job, usually because it requires some specific knowledge of the
merchandise being sold. Open Bazaar will probably follow suit and of course it
will be that kind of merchandise.

~~~
hoffmabc
Realistically there are only about 1 million bitcoin users in total worldwide.
It is still very early days. We are aiming to make OpenBazaar a common
ecommerce standard using Bitcoin that will allow people to build trustworthy
marketplaces on top in many different ways. It's not just about overrunning
eBay, it's about providing a global, user-driven and open-source network that
will grow in scale as Bitcoin does. The escrow capability is certainly an
experiment in many ways, but it also is being done in other countries
successfully and we think it's one of the best ways to create a marketplace of
trustworthy arbiters rather than have a centralized corporation with rigid
policies that treat customers unfairly in most cases.

------
pakled_engineer
Of course the 'money' in this is abstracting away the complexities of Open
Bazaar with your own app since their example GUI is pretty confounding. For
example create a designer clothing app that only lists other designer clothing
listings (to not scare away customers who discover a bunch of heroin for sale
on OB with the regular GUI), then sell the ranking they appear in your app, or
in app ads as a small example.

I don't like the Moderator rating system though, seems too easy to game and
has too many worthless stages 1-5. Bitcoin-OTC ratings are more clear. The
rating "This is a scam avoid at all costs" opens the door for legal issues of
people trying to sue the developers like when Ebay gave up on negative
feedback due to too many lawsuits. Of course there is also issues of
governments trying to shut down this completely due to weapons and narcotics
undoubtedly being sold on OB in the future, I assume the creators have a plan
for dealing with that inevitable gov harassment.

The creators/maintainers should also be careful where they travel, if they fly
to say, China, Indonesia or Turkey for any reasons they could be arrested
there and pushed through a kangaroo court.

~~~
asciimo
Is BitTorrent, Inc. harassed in these ways?

~~~
pakled_engineer
Cohen and Navin made a deal with the MPAA to remove links to illegal content
on the official BitTorrent website which opened the door for 3rd party tracker
sites like the piratebay to do so.

I imagine this will happen with OB the official app will be crippled by
lawsuits but of course this all depends what they have told each other in
private unencrypted emails and the dev mailing list. There's already a thread
where Patterson advocates to recommend suggesting that developers talking
about OpenBazaar with the public cite example products that are “illicit but
socially acceptable" such as Fireworks and Radar Detectors. “Stuff that people
wouldn’t disagree with but is technically illegal to sell because of stupid
laws.” Seems nobody has learned from the Megaupload case how you can talk
yourself into problems with overzealous prosecutors.

~~~
ultramancool
Yup, there's a good reason why many open source peer to peer file sharing
tools, torrent streamers, video players, usenet downloaders, etc all happen to
use Big Buck Bunny or similar free products...

They should really be selling Big Buck Bunny DVDs in all their examples,
they're going to get fucked sideways if they suggest anything remotely
questionable in any official context.

------
Glyptodon
If this is an open source distributed system without a central business entity
deriving revenue from the market what's the reason venture capital is funding
the group making it? Just a vested interest in Bitcoin growth/adoption?

~~~
dmix
There have been so many (successful) OSS projects with VC backing since the
1990s that this argument doesn't hold much weight. OSS != no revenue options.
There are many business models that exist beyond selling products or taking a
percentage.

------
theseatoms
What will prevent seller fraud? (The kind of fraud discussed here:
[https://news.ycombinator.com/item?id=10857478](https://news.ycombinator.com/item?id=10857478)
)

edit: The site's having trouble, but here's a link to the subreddit,
[https://www.reddit.com/r/OpenBazaar](https://www.reddit.com/r/OpenBazaar)

~~~
jerguismi
I guess there is multi-sig escrow built-in somehow. If not, then it is quite
stupid project I guess.

~~~
kin
According to their blog, there is a multisig set up.

See here: [https://blog.openbazaar.org/what-is-
openbazaar/](https://blog.openbazaar.org/what-is-openbazaar/)

------
brighton36
This project is completely absurd. It started from an open-standard for
darknet markets, and pivoted into bad magento clone that requires a special
non-http browser and protocol to access.

The stores are trivially censored, and there's no efficiency here that will
stand up to the preferences of non-libertarian consumers that have no problem
with the so-called 'middle man' that is our current state of frictionless
purchasing.

~~~
hackerboos
Funny thing is that now it's no good for dark markets because it doesn't work
over Tor.

------
ufo
I think I've lost count at how many different things were said to be the
"bitcoin kiler app"

------
quantumpotato_
" and the always-active Slack room for the community is packed with about
1,200 users on their 41 channels, each of which is a topic-specific, skype-
like chat room."

Chat rooms are skype-like now?

I suppose if you're talking about closed source.. :)

------
throwaway7767
I wish this ran on TCP, so it could be used through tor. Unfortunately it
looks like the protocol is UDP-only.

------
asciimo
I have a ton of stuff in my garage patiently waiting for Open Bazaar. (That's
my current excuse, anyway.)

~~~
brighton36
Why not just use craigslist or ebay?

------
nols
Hasn't this been upcoming for awhile now? Are they releasing soon?

------
ilostmykeys
so what prevents the other 77 altcoins from starting their own p2p market?

this sh!t is old...

