Cryptocurrency Trading Now Live on OpenBazaar

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A look at the new alternative to cryptocurrency exchanges in the decentralized marketplace OpenBazaar.

The open-source decentralized marketplace OpenBazaar has now introduced peer-to-peer cryptocurrency trading direct from users on its platform in a move that could possibly see the same feature come to dark web marketplaces.

Historically, OpenBazaar and darknet markets have continually matched each other in features, and this new category from OpenBazaar may find its way to other dark web platforms.

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OpenBazaar has served similar goods to that on the dark web marketplaces in the past but has looked looked to gain a more legitimate userbase and product availability, leaning further from what might be considered illegal. It is however a vision of a truly free market, much in the same light that Silk Road founder Ross Ulbricht hoped would enlighten users previously.

From the other end of the spectrum, cryptocurrency advocates are welcoming the platform’s decision to include cryptocurrency into the continual expansion of infrastructure and ecosystem created by OpenBazaar.

It’s another mark of legitimacy to cryptocurrency, and the adoption appears to be spreading perpetually.

OpenBazaar had three categories previously: digital goods, physical goods and services provided. Cryptocurrency is being hailed as the fourth category.

It allows anyone to start selling acting as a peer-to-peer marketplace. It’s like torrenting for goods and services, where OpenBazaar acts as the torrenting program.

Issues with Cryptocurrency Exchanges

Cryptocurrency exchanges have become the biggest, most convenient and fastest method for obtaining the digital currencies.

Nations have interpreted the decentralized nature of cryptocurrency as essentially a threat and a significant sub-industry has been built up around cryptocurrency regulation: mostly centred towards Know Your Customer compliance.

Exchanges have therefore had to hire people able to digest the complex laws thrown at cryptocurrency businesses—notably laws that are not fit to the purpose, do not recognize cryptocurrency as a “currency” by legal standards, and instead are more concerned about “terrorism financing” (when looking primarily at the West). This all increases the trade costs, generally a percentage of the trade.

If cost is the first issue associated with traditional cryptocurrency exchanges, then security or risk is most definitely the second. In a cryptocurrency exchange, the decentralized currency (or tokens) are ironically centralized into the exchanges’ wallets.

This has made exchanges a notorious target for hackers. The Mt Gox exchange, which was handling about 70 percent of the Bitcoin trades worldwide at the time, was hacked in spectacular fashion and saw the loss of about $350 million USD worth of Bitcoin. From the ashes of this event, cryptocurrency users and traders quickly found the value of cold storage (offline wallets).

Having cryptocurrency on any exchange is a risk. This risk is weighed against the need to trade, and as such, most traders keep only what they need on an exchange—not their entire cryptocurrency holdings.

Is a Change Needed?

There are positives with cryptocurrency exchanges which OpenBazaar will now be up against, mainly the ease and speed of trading.

It’s very likely that the hardcore crypto traders are not going to be lining up to open accounts with OpenBazaar. The users of graphs and stop orders might be too necessary for them.

But perhaps OpenBazaar could attempt to accommodate in some way. Decentralized cryptocurrency exchanges have been on the minds of the movers in the industry. It’s just pretty hard to build and maintain.

OpenBazaar is then not necessarily trying to tear traders away from the glow of their four monitors surrounded by energy drink cans. It’s attempting to carve a new niche. It’s own niche. And it might just work.

The community nature is what OpenBazaar should lean on. It’s real users of cryptocurrency connecting with real users.

There is significant appeal in this. Cryptocurrency community members are all about decentralizing everything at an almost anarchist level, and the irony of using centralized exchanges hangs like a thunderstorm cloud waiting to drop the rain again (following on from Mt Gox).

What Can OpenBazaar Mean?

The open-source decentralized marketplace OpenBazaar has now introduced peer-to-peer cryptocurrency trading direct from users on its platform in a move that could possibly see the same feature come to dark web marketplaces.

By branching into this new type of cryptocurrency trading, OpenBazaar is taking a major step towards the place cryptocurrency can really take in the world.

OpenBazaar is an open-source decentralized platform, and arguably it’s a kind of “clearnet” marketplace. By connecting users that hold cryptocurrency directly, it is removing the central entity in the exchange.

Even though exchanges still move with the market and as a total process do technically connect buyers and sellers, it still acts as the intermediary. It takes a cut. OpenBazaar’s technology could lead to a truly free marketplace.

Something that we’re all lacking on the dark web is open-source codebase projects. It’s of course a bit of a pipe dream to believe every user is striving for good, or is as idealistic as Ross Ulbricht was (or rather, is).

But it may become incredibly important to have decentralized systems, especially as the landscape of the digital world crashes into the red tape and legislative, regulatory swell inbound from the State.

Decentralized systems are very hard to get true community adoption without making them open-source, so they go hand in hand. Projects such as Zeronet are working hard to create open decentralized systems which could provide refuge for internet users.

This news is a good step forward. Users should try to get involved and support OpenBazaar. It might be a better way to buy cryptocurrency if you’re new to it all looking to get on board or if you’re a veteran who has seen the wars. It just seems as though the traders are not going to be using this system. But that might not be a bad thing.

This integration could be a blueprint for dark web cryptocurrency trading. If darknet markets get serious about providing cryptocurrency trading, it could create a whole new service class for the dark web.

It could go either way: a dark web centralized cryptocurrency exchange or a decentralized system utilizing the other’s computational power. The result is the same in this respect: cryptocurrency trading without Know Your Customer rules, without legislation, without judgement or taxation.

Con

Con

Con's education background is law, where he's published on crypto-currency regulation. His opinion editorials range across the relationships between people and technology and the societal challenges it presents. His passion is for information security and the intertwining legal issues
Con
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