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OpenBazaar Secures $1m for Its Decentralized Marketplace

OpenBazaar Secures $1m for Its Decentralized Marketplace

Avatar Yashu Gola 5 years ago

A startup called OB1 recently raised $1 million for its decentralized e-commerce platform, OpenBazaar, after receiving support from notable investors like Andreessen Horowitz, Union Square Ventures and William Mougayar.

The startup’s CEO, Brian Hoffman, plans to use the money to speed-up their project’s development, which, despite being announced an year back, has still fallen short of meeting the expected deadline. It, according to Hoffman, was mostly due to the absence of round-the-clock workers that can invest their unshared concentration to the project.

“Despite our best efforts as part-time volunteers, progress was slow,” he, and his team, explained. “The project needed the core contributors to make development a full-time effort in order to release a robust application within a reasonable time-frame. This funding allows us to commit our full-time resources to develop OpenBazaar.”

A Decentralized e-Bay, Literally

Unveiled during the 2014 hackathon, OB1 caught everybody’s imagination for amalgamating file-sharing technology with Bitcoin to create an eBay-like decentralized marketplace. Soon after its introduction, the OpenBazaar project gained support from the Bitcoin community who were always open towards backing decentralized technologies.

OpenBazaar therefore was conceived to do one specific job, i.e. to cut middlemen out of an online marketplace. In its operative state, the marketplace is expected to be a platform where sellers and buyers can interact directly and conduct their business in private, without an eye peeping into their matters.

Arbiters Replace Mediators

Unlike eBay which solely acts as the mediator between a seller and a buyer, only to take an important chunk out of the deal, OpenBazaar prefers to rely on arbiters — some sort of self-chosen mediators that negotiate the deal between the two parties. This third party watches over a deal and created a multi signature Bitcoin account that can release money only if two of three people give their consensus.

Expecting Legal Troubles?

Hoffman however confirms that he has not been approached by legal authorities, but the platform he is trying to shape can certainly raise alarms. We can fear OpenBazaar to become another Silk Road until a proper monitoring protocol is implemented on the website — something that will eventually kill the idea of decentralization. But unlike Silk Road, which was itself centrally controlled by just-convicted Ross Ulbricht, OpenBazaar won’t be run by anyone. The legal complications therefore can fall on its creators — the OB1 team.

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including NewsBTC, FxDailyReport, Bitcoinist, and CCN...

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