What is OpenBazaar and why does it matter?

OB1 company has made fully decentralized open market that is peer to peer called OpenBazaar, development started back in the 2014 year on a bitcoin hackathon where the first prototype was built under the name of “Dark Market”. Later “Dark Market” code was forked and that’s when OpenBazaar came to life. The goal is to disrupt the online commerce how it is done via centralized parties. It enables anyone and anywhere to buy and sell goods for Bitcoin with the support of few other cryptocurrencies as well. OpenBazzar is a free market and its purpose is not to be an illegal market, although it is possible to sell and buy illegal things as the decentralized nature of the OpenBazaar.

How does it work without the centralized server? Where is all the data about products and reviews and another type of information stored?

To make it easier to understand we can compare it to how torrent clients work. In order to have your shop where to sell your items, you will have to host your shop on some device so that other users can interact with your store and see listings, same as how on the torrent client you receive files from another user. For the beginning, you can use devices like raspberry pi as it should be good enough to handle the load of buyers on the marketplace. When people buy and sell between each other they do it directly without any middleman. For data storage, OpenBazaar uses IPFS, a protocol and a network designed to be a distributed file system. Though it is possible if your store is cached with IPFS that you do not have to keep your store online 24/7 to enable customers to buy whenever they want to.

One of the advantages of OpenBazaar is that the payment process is bitcoin plus as everything is peer to peer there are no fees on the platform itself. Of course, if you are looking to sell items you will have to cover the cost of running your own shop or hosting it somewhere on the internet.

By default, IP addresses of anybody who use OpenBazaar are available. If you, however, seek for greater privacy running it through Tor is also made possible.

How to ensure secure payment, that seller nor buyer is trying to scam me?

OpenBazaar implements some sort of traditional escrow system. Where there is some 3rd party, middleman, a man in the middle between buyer and seller. By using moderated payment when a buyer wants to buy an item he sends the money to a multisignature, multisig, address. Multisig enables multiple parties to be required in order to spend the funds and in this case, it requires at least 2 parties, out of 3 involved, to agree on how they want to release the payment. By doing this seller will get the money only after the buyer is satisfied or seller will get the refunds if there is some problem with an item he or she bought no matter the reason. Anybody can become Moderators and thus help to solve issues on the OpenBazaar that buyers and sellers may have.

Apart from being the marketplace, another feature allows users to use OpenBazaar to trade various cryptocurrencies within the platform. There are no fees involved from the OpenBaazar side if you simply want to trade with another person. Although like with the marketplace, cryptocurrency trading has moderation option where you can trade via 3rd party and in this case trading is made more secure as long as both of you can trust 3rd party but you will have to pay some fee as well.