If you’re an avid blockchain and bitcoin follower you’ve without a doubt seen news pieces about OpenBazaar, an open source peer to peer (P2P) market that claims to cut out middlemen, competing with sites like Amazon and eBay. Of course OB is run on the premise that buyers and sellers want to exchange pseudo-anonymous bitcoin rather than normal currencies, also cutting out payment providers like PayPal. OB is now open for business! So how does it look?
It reportedly took only a few hours for the first illegal drug-related posts to appear on OB, an ominous but not surprising start to the marketplace. The average person probably relates bitcoin to illegal activity and not much else, so battling the stigma attached to bitcoin is probably not the first priority of OB. Still, the P2P site that offers no middleman and a higher degree of anonymity is bound to be a vehicle used by criminals to accomplish their own less than legal dealings. This would seem to be further validated by OB postings for money laundering attempts using exploited credit cards and PayPal accounts, child pornography, and illegal substances. I was unable to locate any offers for firearms, though!
OB is also not without restrictions. Though the front page literally states “no restrictions”, there are plenty of restrictive attributes to OB. Wait, I mean “limitations” as noted on this page. The client is desktop only, meaning users are forced to download and run OB on their local machine, opening up a range of disastrous security lapses. In order for sellers to offer their wares, they must be online and hosting their selling page. A page is that obfuscated by a huge string of letters and numbers, a far cry from the easily memorable ‘Amazon’ or ‘eBay’. Add to this the opaque way that disputes are resolved, and uncertain inventory management functions and future, and the project seems like it is a very long way from competing with it’s robust, mature competitors.
Even with the current negatives, there exists positive potential for cutting out middlemen and creating value. In theory it makes sense to promote OB, offering savings to consumers while accomplishing the often unstated dual intent of projects like OB, upsetting the status quo and promoting bitcoin, which are nested within the other. The lack of recent volatility in the price of bitcoin means consumers have a more realistic read on the cost of using the alternative currency, especially if the amount of time the process of exchanging dollars to bitcoin to products consumes is reduced. With quality companies like Circle and Coinbase speedily exchanging dollars for bits, and the stated intent of OB, it isn’t impossible to see how consumers could make use of bitcoin for common purchases.
Of course, whether OB will prove to be viable, or simply another failed bitcoin project that didn’t actually solve a problem, but rather met an idealistic version of reality, is yet to be seen. Like any new firm or service, a certain amount of skepticism is due to be heaped OB’s way, and rightfully so. It will be up to a community that is often divided and divisive to rally around a project that has been touted as bitcoin’s “killer app”, to prove the concept is useful and take OB beyond a toy for deepnet denizens and drug dealers. Success is earned, so what will OB and the bitcoin community do to deserve success?