[2017-04-10]As Bitcoin Fees Rise, OpenBazaar Looks at Altcoin Payments

[friend666]

OpenBazaar, an open-source market that allows buyers and sellers of goods to directly create shops and sell goods without fees, restrictions or accounts, is looking to layer multiple cryptocurrencies into its wallet in the interest of offering lower transaction fees. The online market already allows users to pay for purchases in multiple cryptocurrencies via an integration with the ShapeShift.io exchange.

With rising bitcoin fees, Mike Wolf, design lead at OpenBazaar, has proposed supporting multiple cryptocurrencies, noting there are details to be worked out.

Rising Bitcoin Fees

“Bitcoin fees are getting high,” Wolf tweeted. “Should @OpenBazaar support multiple cryptocurrencies?” The tweet directed readers to a Youtube video in which he presented an idea for how multiple currencies could layer into the OpenBazaar wallet.


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“We have not thought about all of the functional aspects of it yet,” Wolf said in the video. The team is looking for feedback as to whether the concept has value. “Let us know what coins you think are most useful,” he said. “We’ll definitely read through them.”

Wolf also posted a survey on Twitter asking people to vote on whether OpenBazaar should support multiple currencies. With 443 votes cast and six days left, 87% wanted to see OpenBazaar accept multiple currencies.

“Relying 100% on bitcoin might not be realistic in the near future,” Wolf said. “From the Open Bazaar perspective, we really want to keep fees as low as possible.”

Multiple Crypto Options

The merchant payment screen Wolf demonstrated in the video showed multiple currencies to choose from.

He showed a vendor called Ski Shop that accepts bitcoin, Litecoin and Zcash. In the checkout screen, it also listed Ethereum, Dash and Monero.

Wolf also tweeted to ask if any Litecoin developers would be interested in helping him with the integration.

Litecoin Offers Support

Charlie Lee, the creator of Litecoin and director of engineering at Coinbase, responded that he would arrange to have a developer work with OpenBazaar on the project.


Charlie Lee
Lee, who noted that Litecoin’s volume is now over $10 million, sees interoperability of different cryptocurrencies as a key to lowering transaction costs.

Lee has advocated SegWit to activate on both bitcoin and Litecoin. He noted in an article on the SegWit website that the release candidate code is tagged and binaries are near release.

SegWit’s main benefit is transaction malleability, Lee said. Lightning Network could be built atop Litecoin.

At 1MB block size, Lightning Network and SegWit on bitcoin can service 500 million users, he noted.

Also read; OpenBazaar now accepts altcoins with ShapeShift integration

How Interoperability Lowers Fees

Because the bitcoin transaction fee on Lightning Networks will be higher than the Litecoin transaction fee, it could make economic sense for a Lightning Network transaction to go via Litecoin and then back to bitcoin to get the lower transaction rate. Lightning Network makes this possible because it allows the two networks to be interoperable.

Lee said he did not know if this use case will be economical, but no one will know until both Lightning Networks are up and running.

“My bet is that the convenience and the cheaper tolls on Litecoin highway will convince cars to cross over and use Litecoin,” Lee wrote.

Another benefit is cross-chain transactions via Lightning Network. Two parties can trade BTC and LTC immediately and without risk. Efficient decentralized exchanges are now possible.

Should a merchant accept only BTC, a buyer who only has LTC can now pay LTC and exchange the currencies instantly through a Lightning Network exchange node and send BTC to the merchant.

With SegWit and bitcoin’s current block scaling deadlock, Lee sees the potential for Litecoin to help bitcoin break through this deadlock.
https://www.cryptocoinsnews.com/bitcoin-fees-rise-openbazaar-looks-altcoin-payments/

[renfangfua]

Bitcoin is a software implementation. The risk of centralization therefore comes from the risk of software centralization under one Corporation that wants BitCoin to be whatever the Corporation says it is. The risk is less from the hardware vendors and mining pools that run the software.

[European Central Bank]

it's a no brainer in my opinion. if openbazaar is open to everyone then vendors and buyers should be able to use whatever currency they want as long as it can be technically accommodated. there's no question bitcoin is too expensive to use for the little stuff now.

[TraderTimm]

Using an alt to avoid fees just shows how stupid these people are.

Instead of paying a simple fee you have to enter into a multiple-chain-of-trust between an exchange and the alt you are "saving" money with, then rely on it again to transfer back into your origin coin.

If you wanted to make a more goldbergian-esque process, you'd have to try a lot harder - this kind of multi-step exchange and liquidity risk is only for professional idiots.

[European Central Bank]

there are alt maximalists out there who are only interested in certain coins. if that's what people wanna do then let them. it's not that different from drug dealers converting bitcoin back to usd.

[richardsNY]

It's a new trend nowadays to see all kinds of services implement, and consider to implement altcoins as they consider Bitcoin to be too expensive to use as payment tool. From my point of view it's not worth it since you first need to obtain altcoins, which requires you to pay a certain fee, and then you need to cash them out, which again costs you a certain fee. Instead of going through all this hassle, people for once should quit wasting time and include a proper fee, and the "problem" will solve itself. What a nonsense.

[d5000]

OpenBazaar is open source software. So if there are strong altcoins that can incentive developers to work on the OpenBazaar code, an altcoin integration will come - like it or not. If the "official" OpenBazaar at the end doesn't support other coins, then other people could create a fork that supports them.

As a coin-agnostic person I fully support a move in this direction - let's have free markets and competition between different payment solutions.

Instead of paying a simple fee you have to enter into a multiple-chain-of-trust between an exchange and the alt you are "saving" money with, then rely on it again to transfer back into your origin coin.

That's valid only if the users don't simply use the other coin also for their main wallet.

But even if most users really do these BTC->ALT->BTC moves: With Segwit, that will be even easier, because then we'll have soon atomic cross-chain trading and we won't need "multiple chains of trust."

(So Bitcoin Maximalists should be actually anti-Segwit ).

[TraderTimm]

< snipped >

That's valid only if the users don't simply use the other coin also for their main wallet.

But even if most users really do these BTC->ALT->BTC moves: With Segwit, that will be even easier, because then we'll have soon atomic cross-chain trading and we won't need "multiple chains of trust."

(So Bitcoin Maximalists should be actually anti-Segwit ).

How you fail to recognize that extra transaction steps result in inefficiencies is rather mind-boggling. "Only valid if users don't use other coin for their main wallet" what the hell is that? I have BTC and LTC and I magically somehow transfer between the two because I have "both"? It still means a transaction is recorded on both chains, which means the added steps are higher cost-wise.

Eh, whatever, juggle alt-coins all you want - you aren't inspiring confidence in your deductive abilities.

[Carlton Banks]

But even if most users really do these BTC->ALT->BTC moves: With Segwit, that will be even easier, because then we'll have soon atomic cross-chain trading and we won't need "multiple chains of trust."

(So Bitcoin Maximalists should be actually anti-Segwit ).

Is it not the case that both coins need malleability fixed for atomic cross-chain swaps to work?

If so, Litecoin will be able to transfer directly in a single joint transaction between Litecoin and.... Litecoin? As Litecoin would be the only Segwit coin out there? There is maybe one more cryptocoin out there with Segwit.... which is even more obscure, under-used and under accepted than Litecoin itself.


And that brings us to the elephant in the room: Litecoin's use and acceptance. Which is some small fraction of it's transaction capacity as far as usage goes, and the acceptance (by merchants) is essentially zero. The positive feedback loop required to get the Litecoin transaction rate up to where off-chain 2nd payers are needed is very, very far from getting off the ground.


And so, I'm not sure what you think you're getting at really. To buy Litecoin, one must first buy Bitcoin with fiat, then buy Litecoin with Bitcoin. Unless you're accepting BTC or LTC directly of course, but the reality is that BTC is becoming less accepted than it used to be. What makes you think LTC is going to start taking off with merchants where BTC is receding? Call it "maximalist" or whatever, I call it plain reality.

[Kprawn]

Well I just transferred some bitcoins to another address from a online wallet and used the "default" fee setting. The default setting worked

out to $7 for the transaction, which in my opinion is WAY too expensive for a online market place. Most people in 3rd world countries cannot afford

that kind of fees. The transaction took 2 hours to get 1 confirmation.... and that is totally unacceptable for micro payment networks. So I can also

see why OpenBazaar is doing this. Imagine buying something for $5 and paying $7 in miners fees.  

[Carlton Banks]

Well I just transferred some bitcoins to another address from a online wallet and used the "default" fee setting. The default setting worked

out to $7 for the transaction, which in my opinion is WAY too expensive for a online market place.

You think too simplistically for how Bitcoin works, despite the fact you've been here as long as me. You never learn anything from the huge amount of good information that gets disseminated on Bitcointalk, so I have zero sympathy with capitalists that don't know how to capitalise.

I mean c'mon, you're using an online wallet? That denominates the fee in words like "fast" and "default"? You don't know what you're doing, and it's been how many years since you make an average 5 posts a day? Do you ever read anything on here, like the billions of threads about fee rates and how to set them, some of which you post in? Your posts are a waste of everyone's time, including yours. It's like listening to someone who isn't into Bitcoin talking about Bitcoin, for 5 years.

[panju1]

it's a no brainer in my opinion. if openbazaar is open to everyone then vendors and buyers should be able to use whatever currency they want as long as it can be technically accommodated. there's no question bitcoin is too expensive to use for the little stuff now.

That is correct. What is needed is a means to transfer value. If Bitcoin is going to take 5-10% off my transaction value for a microvalue transaction, then it doesn't make sense at all. I would happily shift to any alt (whose value is relatively stable).

[TraderTimm]

it's a no brainer in my opinion. if openbazaar is open to everyone then vendors and buyers should be able to use whatever currency they want as long as it can be technically accommodated. there's no question bitcoin is too expensive to use for the little stuff now.

That is correct. What is needed is a means to transfer value. If Bitcoin is going to take 5-10% off my transaction value for a microvalue transaction, then it doesn't make sense at all. I would happily shift to any alt (whose value is relatively stable).

You're both mental.

Yeah, lets transfer value using a poorly used alt-coin to "save money". Are you even listening to what you're saying? I suppose not, seeing how you're willing to embrace transactional risk with an illiquid asset to "save" money.

Please, sell all of your Bitcoin and stay with alts, they are more your speed.

[European Central Bank]

You're both mental.

Yeah, lets transfer value using a poorly used alt-coin to "save money". Are you even listening to what you're saying? I suppose not, seeing how you're willing to embrace transactional risk with an illiquid asset to "save" money.

Please, sell all of your Bitcoin and stay with alts, they are more your speed.

i'm not mental the last time i checked. openbazaar should be what it bills itself as - open. if people want to use alts then it should offer that ability.

and there are many alts that have gone up so much that you'd be spending free money if you'd sat on it long enough. that encourages some heavy spending.

[michkima]

I don't think they'll find a suitable replacement for bitcoins if their users will not trust the altcoin they will choose, hence it will just fail. They must really choose one that is really stable and will likely gain the trust of their users. It's just sad that bitcoins is having this problems which hinders it's growth.

[numismatist]

It's a new trend nowadays to see all kinds of services implement, and consider to implement altcoins as they consider Bitcoin to be too expensive to use as payment tool. From my point of view it's not worth it since you first need to obtain altcoins, which requires you to pay a certain fee, and then you need to cash them out, which again costs you a certain fee. Instead of going through all this hassle, people for once should quit wasting time and include a proper fee, and the "problem" will solve itself. What a nonsense.

Most if not all tradesites I am using offer direct pairings like XMR/USD seemingly that's the future.

[d5000]

Is it not the case that both coins need malleability fixed for atomic cross-chain swaps to work?

Correct, at least if they use a multisig approach. (Just for the records: There is another mechanism based on CIYAM's "AT" smart contract technology but it's only supported by Burst and Qora, two nearly insignificant Java coins, and AFAIK it's not compatible with the proposed solution for bitcoin-based coins. I think I've read Ethereum also is developing something similar.)

If so, Litecoin will be able to transfer directly in a single joint transaction between Litecoin and.... Litecoin? As Litecoin would be the only Segwit coin out there? There is maybe one more cryptocoin out there with Segwit.... which is even more obscure, under-used and under accepted than Litecoin itself.

Actually there are two Segwit-supporting altcoins (Groestlcoin and Syscoin). They are very small, that's true.

But I guess if atomic cross-chain trading gets implemented in some kind of GUI software for LTC (or BTC), then many smaller altcoins would like to jump on that train and would push to include Segwit in their own codebase. (Actually, if you look at the charts of GRS, LTC and also VTC their price is ultimately closely related to positive or negative Segwit news). So we could arrive at a situation where more than half of all altcoins had Segwit and BTC still doesn't. If BTC also gets Segwit, this effect will be even stronger as most coins would eventually update to the latest codebase.

[...] the acceptance (by merchants) is essentially zero. The positive feedback loop required to get the Litecoin transaction rate up to where off-chain 2nd payers are needed is very, very far from getting off the ground.

That may be true in the present, but I think it's not totally crazy to think if LTC successfully implements LN as a first-mover it could get a usage boost that starts that positive feedback loop.

But originally in my earlier post I parted from the situation that BTC achieves to activate Segwit (for example, using UASF).

@TraderTimm: "Main wallet" = wallet used for payments and savings.

[Carlton Banks]

[...] the acceptance (by merchants) is essentially zero. The positive feedback loop required to get the Litecoin transaction rate up to where off-chain 2nd payers are needed is very, very far from getting off the ground.

That may be true in the present, but I think it's not totally crazy to think if LTC successfully implements LN as a first-mover it could get a usage boost that starts that positive feedback loop.

Right, but remember what you're agreeing to here: LTC has less need for Lightning Network, even when it hasn't hit it's blocksize capacity, due to it's low block interval (1 minutes average IIRC).

Litecoin was supposed to be the original "solution" to the Bitcoin 10 minute block interval, and the market more or less decided that Litecoin doesn't really work for on-chain fast payments, as the orphan blocks/blockchain reorganisation risk is too high with Litecoin, one may as well wait 10 minutes worth of Litecoin blocks to be confident that a given transaction is definitively confirmed in the Litecoin blockchain (i.e. Satoshi knew exactly what he was doing with his 10 minute block interval, and Litecoin is a flawed concept)

Do you still believe that Litecoin can reach it's full on-chain capacity, so that Lightning on Litecoin actually becomes necessary, despite any technical improvements in Litecoin's orphan or re-org rate? I don't buy that right now, as is the case with all other cryptocurrencies (I didn't even buy any Monero, despite liking it more than the others)

[iamTom123]

This is just like turning a lemon into lemonade. The current situation in Bitcoin is pushing many altcoins to the forefront of available choices. And this can be a great time for altcoins to also shine thereby giving other altcoins a great opportunity. I have no problem with this though I am banking more for Bitcoin in terms of holding. Right now, developers are scrambling to introduce new and so-called better digital coins but as how many of them can stay for long that is another question.

[d5000]

Right, but remember what you're agreeing to here: LTC has less need for Lightning Network, even when it hasn't hit it's blocksize capacity, due to it's low block interval (1 minutes average IIRC).

AFAIK it's 2,5 minutes. But that isn't important.

You're obviously right that there presently is no real need for LTC to get more capacity. But the opportunity Litecoin has is just the "media buzz" it would get if it preceded BTC with a working Lightning Network. It would be able to market itself as the "cryptocurrency ready for billions of users".

I'm however not really convinced it would reach BTC's market cap (at least not fast, and the higher orphan rate could be a factor that would favor BTC) but it could reach the market cap of Ethereum without problems and get some use by merchants - and in this case for OpenBazaar a LTC addition would already be a "win".

But I think if BTC gets Segwit, LN and other second layer solutions before - let's say - mid-2018, then it's almost sure it would continue to be the undisputed leader of the "cryptosphere". Only in the case of a hard fork or an eternal "scaling debate stalemate" (let's see if UASF can break it) I see that leadership in danger.