“It’s like buying or selling with someone in person – except you’re online.” Wow, the simplest sentence ever. Wait, what? Humans plus “money” plus distance plus anonymity = not simple. (And, no this is not a story lifted from the Panama Papers.)
OpenBazaar is a new decentralized open source network for peer to peer buying and selling using Bitcoin. No fees, no company, no platform and a universal currency moderated only by other participants in the network. You can buy and sell anything (some moral hazards here—shades of Silk Road) and you use Bitcoin to transact, so no fees and no personal information shared.
Here’s OpenBazaar’s handy graphic of its disruptive model:
It works pretty conventionally. You list your product, the listing goes out to the entire network and is searchable. You end up with a contract with a buyer and a third party moderator (another buyer/seller on the network in OpenBazaar’s vision). It takes any two of these three parties to let the Bitcoin flow to the seller (so the third party decides who is right if there’s a dispute).
It all makes perfect sense and disrupts Amazon and Visa’s core businesses (unless you think Amazon’s core business is AWS, which maybe it is). Contrary to OpenBazaar’s expectation that the moderator role will be filled by another unpaid network participant, however, there may be a role for a giant as the third party moderator, since that is one place where anonymity + distance really conflicts with humans + “money”. One primary reason that brands exist (whether they be a financial brand like Visa or a commercial storefront brand like Amazon’s ecommerce unit) is to let humans have comfort in trusting the moment in time when they let go of their “money.”
It will be interesting to see how OpenBazaar develops in the age of Pervasive Commerce, and whether third party moderators evolve into commercial brands over time to help give humans that comfort that they seem to need when transacting.