OpenBazaar Is Not The Next Silk Road


Though it’s very early stages (OpenBazaar has only just opened a test service, with full launch expected later this month), is a far cry from what some hyperbolic commentators were expecting. When OpenBazaar’s operators proposed the idea of a distributed marketplace where there was no central authority to hold to account, the currency was the untraceable (but actually very traceable) Bitcoin cryptocurrency and the rules almost non-existent, it led to assumptions OpenBazaar would house next -generation narcotics markets like Silk Road, illegal weapons stores and child abuse content dealers that police could never track. But right now, OpenBazaar is shaping up to be a slicker, more secure, anarchist eBay … ON ACID.
There are, undoubtedly, some benefits to using OpenBazaar for anonymous trading. Encryption in transit across the nodes used to host the network (see map below for the spread) helps prevent simple snooping, whilst the very nature of a peer-to-peer setup means the US government cannot target an authoritative, centralized body, whether with a subpoena or a technical taskforce looking to knock out a server. Bringing the network crumbling down, though not impossible as shown in police P2P botnet takedowns, will be considerably harder than if command and control of the network were hosted on a small number of boxes. The chat feature is also end-to-end encrypted, which should prove popular given the rise of such services in response to revelations of mass government surveillance.
But there are a few key reasons OpenBazaar is unlikely to become the next Silk Road. First, IP addresses of users are viewable to those have the technical ability to look. If the user can pull data from the OpenBazaar API (the application programming interface that allows outside access to some OpenBazaar systems), it’s possible to build a crawler that maps out all participants in the P2P network. Anyone who isn’t routing their traffic through other servers and thereby masking their IP address (typically done over a Virtual Private Network or the Tor anonymizing network) can, therefore, be quickly identified and located if police have a warrant.
This is pointed out in a stark warning during registration: “OpenBazaar users are not anonymous by default. Most communications between parties are encrypted, but IP addresses are public and can be associated with activity on the network. Malicious parties could use this information against you; protecting your privacy is your own responsibility.” Even where users take extra precautions, governments have documented methods of exploiting VPNs and Tor.

Then there’s the ethos of OpenBazaar’s chief purveyors: Brian Hoffman, a former lead associate for cybersecurity at Edward Snowden’s old employer Booz Allen Hamilton , long-time Bitcoin specialist Sam Patterson and academic Dr. Washington Sanchez. After taking over the OpenBazaar project after a few emails from its original creator Amir Taaki, one of the first to promote and develop Bitcoin and the associated Dark Wallet, the trio sought to make a platform free of government control where companies could make more money by cutting out the middleman, typically the owner of the store like eBay or Amazon, who take a small percentage of each sale on their respective platforms. With Bitcoin, the middlemen, the banks and credit card companies who took a cut of traditional transactions, were already removed. But the platforms (yes, including those dark web drug and gun markets) still took their slice. With OpenBazaar, there’s only the buyer and the seller.

The creation of the network will earn them nothing directly. Hence why they founded OB1, which is looking into numerous avenues to bring big names to OpenBazaar with which it will partner on certain stores. It’ll also provide merchant support services, such as vetting legitimate businesses and arbitration, for which it may charge. “We have a list of several hundred individuals and businesses who, over the past months, have asked to be notified when we go live. So we’ll be starting with them and anyone else who wants to join,” says Patterson, talking to me over OpenBazaar’s encrypted chat.

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