By Justin O’Connel for ButcoinMagazine
The distributed ecommerce platform OpenBazaar (OB) soft-launched in April and has received $1 million in venture funding from Andreessen Horowitz and Union Square Ventures. While the team admits “limitations” in the project’s current state ‒ for instance, a store must run the OB client in order to appear online ‒ buyers and sellers are now free to come together and buy and sell goods for various forms of payment, including bitcoins.
Unlike Silk Road and similar darknet-located platforms, OB promises no anonymity and warns users upon signup that their IP addresses are public.
The platform, largely inspired by modern social media, is likely to evolve like other social media sites, where people interact with you ‒ by, for instance, following you ‒ so that you become aware of their store.
The stores of OB are diverse. For instance, Dragibus sells a quarterly print publication on the botany, cultivation, history and usage of medicinal and entheogenic plants.
Physical products abound on OB, as well.
Surf and Skim City, which has had a brick and mortar store in Florida since 2006, is one of the best developed stores on the application. The store is selling on OB because it believes there is a “big need for decentralization” in ecommerce. At their storefront, they offer a 2 percent discount on Bitcoin purchases, the sort of rebate Bitcoin merchants will need to offer if they want to increase demand for the digital currency. The shop is run by a group of professional skimboarders/surfers in Florida who have been Bitcoiners for many years.
According to Mark Cole, founder of Surf and Skim City, “OB is the first thing to show what Bitcoin is capable of.” He laments some of OB’s glitches, but his tech team has been working with a “helpful” OB support team on the bugs. Cole says the website almost immediately received an order for a custom-made Apex 10-3 skimboard. The team wants to run it 24/7, but instead runs the OB store whenever they can.
“I think the developers will find a way to get that achieved,” Cole said.
Founder and programmer Brian Hoffman told Bitcoin Magazine the platform has been downloaded 100,000 times, and believes it’s mostly Bitcoiners.
“Looking at what is available on the marketplace, it’s a very strange mix of products and services,” Hoffman said. “We are seeing legal and illegal goods pop up. The legal goods are selling better than expected. One of the great things happening is people are buying from other countries where, in most cases, they tend not to do so on other platforms because it is too risky. There’s not a lot of trust there on existing marketplaces, which makes it harder to sell goods across borders.” Customers on OpenBazaar are also excited about not paying fees.
Overall, “nothing crazy” has happened on the OpenBazaar network, according to Hoffman. The moderation process, one of the main features of the platform, has gone smoothly, with “moderators stepping up and helping to do refunds, and helping things along, which is pretty unique. I don’t think there’s another marketplace out there where people are crowdsourcing support. That’s where the community has come in,” Hoffman told Bitcoin Magazine.
OpenBazaar has three classes or “layers” of users: buyer, merchant ‒ just like in regular ecommerce platforms ‒ and also a moderator layer. Hoffman says the OB team has been surprised by buyer willingness to bypass the moderation layer.
“The realization we’ve come to is, a lot of people are more trusting than we assumed they’d be,” he said. “We designed the whole system so there would be a moderator to provide protection, but lots of people go to a store and they will try and find more about that storefront, then come back later and purchase directly.”
On OpenBazaar, users can find huge wall-size maps of planets (an atlas of Mars, for instance), as well as service-based stores, where someone will livestream and create a custom OB theme for storefronts for $5. While some have advertised goods such as tax-free cigarettes, illicit products have not fared well on the OB platform.
“We were prepared to see a lot of that,” Hoffman said, “but we haven’t really, so far.” OpenBazaar promises no anonymity to users. There are fewer than five such stores on the platform.
“I think they are just exploring,” Hoffman speculates. “They don’t look legitimate, and then they disappear. On the other hand, there is one store that is selling knock-off Viagra, which I don’t believe is legal, but they’re selling away on the marketplace and don’t seem worried. It hasn’t been super-problematic right now; obviously these kinds of things become an issue when they become bigger. The illicit businesses will then get the attention of law enforcement.”
Currently, in order to receive privacy, users must take steps on their end. “If you run the application out of the box,” Hoffman says, “you are easily discoverable. If you are a little technical, you could pull a storefront’s IP address out of the software and find out where [the seller is] at. Of course, sellers could run through multiple VPNs to avoid that.”
The level of difficulty to set up an OpenBazaar store is similar to that of other platforms, such as Shopify. OB isn’t exactly targeting serious businesses: “For someone who wants to jump on craigslist, I think an app [like OB] is a very simple way to get involved. It takes you a few minutes to get a store up and running and get a listing.” The desktop app, however, is just the first iteration of OB. Mobile is set to follow shortly after the release of desktop.
The OB technology is more difficult to run on a mobile device than a desktop. “We have some thoughts on how to change that in the future,” Hoffman said. “For now, the desktop application is the primary way for people to use OB.” Despite all the emphasis on the ecommerce functions of OpenBazaar, the site in many ways operates like a social media platform.
“When we built the products, it seemed natural to have it wrap around the social media concept, because we knew that buyers and sellers were going to need to be engaging with each other to establish more trust,” Hoffman said. “They were going to need a chat function, and the moderator then also needs to be involved. There has to be this open discussion between all of them.”
OB also wanted to incorporate ways for other storefronts to be promoted within the application.
“It’s a true marketplace,” Hoffman said. “When we designed it, we wanted it to be very social. I think that is an important part of the future. People are already using platforms to sell, like Instagram, Twitter or Facebook. We don’t want to build a social network, but we wanted to add the social features we think would be beneficial to the OB community.” The open-source project hopes to expand that in the future.
“We want people to engage with their brand,” Hoffman said. “So if we have a really popular store on OB, in the future we will be able to blast out updates to followers along with coupon codes and notices of who is following you. Things like that, we will expand as we go.”
OB intends to grow the community throughout the remainder of the year, turning now to OB1 ‒ the project’s own store on the platform, and the reason it earlier landed $1 million in venture capital. According to Hoffman, that project might offer additional services to the OB ecosystem, such as search functions.
First appeared at Bitcoinmagazine