OpenBazaar, a decentralized Ebay, enters beta 2.0

Friday 14 November 2014

Despite Ebay's PayPal unit moving to accept bitcoin, there are many people who still support the idea of a decentralized, pseudonymous alternative that uses bitcoin exclusively. The main alternative that has garnered a lot of attention, especially as of late, is Open Bazaar. Recently Open Bazaar has entered its public beta, allowing anyone to download and test it.

Currently it does not support Windows, however it will upon its final release by the end of the year. If you have a Mac or Linux machine then the installation tutorial can be found here. Depsite the fact it was written for beta 1.0, it still applies to beta 2.0 and is very helpful with its detailed instructions and pictures. With beta 2.0 released, I'll be going over my troubles with installation, how I overcame them, my overall impressions of the interface, and details about certain aspects of the Open Bazaar network.

Problems to look out for when installing


If you run into any problems when trying to start Open Bazaar, there is likely a problem with your update process. The configure executable runs the sudo apt-get update command before installing dependencies, so if you have any errors when running that command, you're not going to be able to run configure properly. In my case I had a lot of trouble getting configure to run at all. To fix this, I found out that the update process simply stopped due to invalid PPAs and ultimately exited the configure process. Once I cleared those out, configure was able to finish installing its dependencies. If you find that there is some other problem with your update process that I'm not aware of, then you may need to edit the configure executable. You can use any text editor of your choice, but I'll be using emacs in this example.

While in the OpenBazaar directory, type the following command:


If your text editor shows the line numbers, scroll down to line 124 and delete its contents. Otherwise, simply scroll down and look for the following text and delete it:

sudo apt-get update

If you run the configure executable again, it will simply skip the update process and install the necessary dependencies.

Being unable to connect

Open Bazaar is currently very dependant on having one particular port open, which you can check with this online tool. If you are having trouble connecting to Open Bazaar (or port 12345 via this tool), then you may need to check your port forwarding settings in your router. You will manually have to add port 12345 of the IP address if starting Open Bazaar does not do this automatically.

An Overview of Open Bazaar

Upon first starting Open Bazaar, you'll find your dashboard, which lists features they are going to implement in the future. These features include a more secure means of sending data (right now it is not based in the tor network as it's intended), anonymous rating systems, cryptographically secure contracts (called Ricardian Contracts), a working arbitration system, and encrypted messaging and chat.

There is also a list of other marketplaces you are connected to on the network. Initially you may be connected to only a small handful and think “Is this all there is right now?” It's important to keep in mind that Open Bazaar is decentralized, meaning it relies on people being connected to each other to propagate information throughout the network. Knowing this, you can imagine that you simply aren't connected to many of the marketplaces on OpenBazaar. So I can assure you that even in this beta, there are more stores than you initially may see.

To connect to stores that you can't see, there will be two ways of doing so. First, you will also be easily able to search for marketplaces and products using a search functionality. Secondly, there is the “add node” functionality on the dashboard. If you chance upon a store's public key, you can add it to your list of connected nodes using this feature; you will always connect to them on startup if you add a marketplace this way.

For the time being, the main way to find new marketplaces would be through the BazaarMarkets subreddit. When clicking on a post marked with the [SELLING] tag, you'll find a long string of characters like this: af7f875b2929c10aa9110f4faae5d83299a07a56. This is the marketplace's public key I mentioned earlier. You will need to copy and paste this string into the “Store GUID” field in the “add node” menu. In beta 1.0, this feature simply did not work, though it still seems flaky in beta 2.0 despite the changelog stating this has been officially implemented.

Clicking on one of these nodes will display an overview of what the marketplace is selling, their display name, and a button to quickly email them. There's also a “Details” and “Services” tab, the former of which displays their public key, email address, and their “Reputation Pledge”. The latter, the “Services” tab, displays any services that entity provides, whether it be notary or arbitration services. Overall the presentation of Open Bazaar is very nice with a very smooth feel to it. While the current GUI is fairly easy to navigate, they plan on revamping it entirely, as they show in this YouTube video. It seems a lot slicker, simpler, and more intuitive than the current GUI. The current GUI seems to be filled with drop down menus and an overall look that wouldn't transition well into a mobile platform. It seems they're designing this with mobile in mind, and it should be ready in the future whenever beta 4.0 drops.

Reputation Pledges and Proof-of-burn

Considering everyone is anonymous on Open Bazaar, you'd expect that nothing would stop a fraudulent store owner from simply abandoning their store and opening up a new one upon being exposed. However, there is the idea that if a store owner invested a lot of money into their store (much like one would invest in a physical store), two things would happen. First, they'd be more incentivized to remain honest, as they would not be able to get back the money they invested. Secondly, a fraudulent person would be far less able to start up a new store to begin scamming others again after shutting down their current one.

As such, the team behind Open Bazaar came up with a means of implementing this, via a concept called proof-of-burn. Proof-of-burn involves intentionally destroying bitcoins and proving it, all with a specific purpose. The destruction would occur by sending bitcoins to an address where its private keys are either nonexistent or permanently lost. This aspect makes those bitcoins unspendable and it can be proven that they indeed were sent there and are unspendable.

Reputation pledges are an implementation of the proof-of-burn concept, whereby a person essentially commits money to their identity on the Open Bazaar network. Knowing that a person was willing to invest (or destroy) a lot of money for their store builds a level of trust with newcomers, as that person would not want commitment to be in vain.

Additions and criticisms to Proof-of-burn

There have been criticisms of proof-of-burn, however, as permanently destroying a scarce currency does not sound like a very smart idea for the long term. As detailed on the development team's blog post, Open Bazaar's reputation system is far from complete; they intend to add more layers to allow people to establish identities, display their reputation, and gain a level of trust with new consumers. The currently named methods would include web-of-trust, trust-as-risk, and security bonds.

Regarding proof-of-burn, while alternatives have been proposed, they present a form of centralization on a technical level that can allow exploitation by malicious entities (like governments or fraudulent groups). They discuss it in much more depth in the blog post linked earlier, however the development team emphasizes keeping all components of the market decentralized and secure from exploitation. They also argue that the destruction of bitcoins via proof-of-burn is not destroying wealth, rather increasing the wealth of bitcoins owned by everyone else; the scarcer the resource, the more valuable it's likely to become.


Open Bazaar is looking promising so far, and I'm excited about many of the concepts they're looking to implement. While it may have been underwhelming to use due to some features not working correctly, I'm excited to see the Open Bazaar market develop as development progresses. I'm also eager to see if it can one day serve as an attractive alternative to well-established marketplaces likes Ebay. However, that'd assume that bitcoin adoption increases significantly among consumers.

Regardless, it'll be interesting to see what kinds of shops people start and what kind of press attention it will get. Initially it was negative due to its original name of “Darkmarket”, though it may be able to show its legitimacy with the average user once it develops further. You can already see a slow yet sure growth in the number of stores appearing on Open Bazaar, so things are looking good as far as setting up an infrastructure. Though I'm a bit wary about what will happen to the value of bitcoin when more people set up stores, as reputation pledges may become necessary to give off a good impression to new consumers.

Ultimately beta 2.0 is certainly worth trying out if you'd like to experiment, however since certain key features don't work too well (for me at least, like searching for and adding stores) I wouldn't get my hopes up about being able to sell things just yet.

Daniel Mestre

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