People hear OpenBazaar and picture Silk Road. The developers building it have something different in mind. OpenBazaar aims to create an open marketplace without censorship. That doesn't mean it exist
People hear OpenBazaar and picture Silk Road. The developers building it have something different in mind.
OpenBazaar aims to create an open marketplace without censorship. That doesn't mean it exists only for contraband. Brian Hoffman, who leads development, sees it as a viable alternative to eBay and Amazon. The team formed OB1 as a company to build the network.
Hoffman discussed the platform's potential market on This Week in Startups. He zeroed in on merchants who sell on eBay and Etsy, moving handmade goods. The numbers work in OpenBazaar's favor: 79% of eBay sellers reported satisfaction. That leaves 21% who don't.
"This is a perfect opportunity for them to go and do something for no fees," Hoffman said.
The fee structure on existing platforms cuts deep. eBay and similar marketplaces take between 6 and 10 percent per transaction, depending on category. Merchants pass those costs to buyers. A seller moving to OpenBazaar keeps what she earns.
Hoffman made another point about established merchants. Those with track records need less buyer protection. On eBay, every seller pays for protections through fees, regardless of their history. A vendor with a thousand successful transactions still pays 10 to 12 percent.
"For what? That's a lot of money for huge vendors that don't have issues," Hoffman said.
Beyond online commerce, the protocol could serve other purposes. During his This Week in Startups appearance, host Jason Calacanis asked whether OpenBazaar could power a decentralized Reddit. Hoffman didn't dismiss the idea but expressed caution.
"I think that the underlying technologies that we're building can be repurposed for that kind of thing. Reputation, identity, ratings, reviews; those are the kinds of things that kind of makeup what Reddit is. I think it's kind of simple to say, 'Oh, you can [use OpenBazaar] to build a Reddit,' because there's a lot more to building Reddit than [just writing the software]."
What's clear is that OpenBazaar could spark new experiments in how people interact online. Like Bitcoin and the early internet, it may take years for the platform to fulfill what it can become.
