Open Bazaar bitcoin killer app!

[knight22]

Open Bazaar with its reputation system using proof-of-burn will suck a shitload of bitcoins out of circulation over time.

https://blog.openbazaar.org/proof-of-burn-and-reputation-pledges/

OpenBazaar implements proof-of-burn in a different way. On the OpenBazaar network, users can choose to be pseudonymous, meaning you don’t know their true identity. As such, it can sometimes be difficult to determine if they are trustworthy or should be avoided. A reputation system is important to help inform the network of which participants have acted honestly in the past, and which haven’t. There are several facets to the OpenBazaar reputation system, which is still being built, and you can read about the overall system here.

One part of this system is Reputation Pledges. This means that a user has chosen to prove their commitment to their OpenBazaar identity by burning a certain amount of bitcoin. The act of burning coins shows the network that the user is committed to their identity because they’ve now expended resources on it, and if they incur a negative reputation then those resources will have gone to waste.

To help understand the importance of this, consider a similar example in the real world. Travelling salesmen were often treated with skepticism by the inhabitants of the towns they visited. Apart from the annoyance of their house calls, why would people be reluctant to purchase items from travelling salesmen? Two reasons. One, they cannot rely on reputation to determine if the salesman is selling quality merchandise or not; the other customers of this salesmen aren’t located nearby. Two, the salesman has nothing to lose if their products turn out to be poor quality – there is no reputation damage if they leave, and since there is no brick-and-mortar store they’ve invested in, they can simply peddle their wares elsewhere.

You can think of it similarly to OpenBazaar users. If there’s no cost to creating a new identity, or if there is no brick-and-mortar store to keep you in one place, you can simply abandon an identity once it has received negative feedback. Obviously online, you don’t have a physical store, but a Reputation Pledge is a similar concept: you’ve invested resources that create an incentive to keep a good reputation and impose a significant cost for abandoning that reputation.

Bears, you have been warned  

[Raystonn]

Open Bazaar with its reputation system using proof-of-burn will suck a shitload of bitcoins out of circulation over time.

https://blog.openbazaar.org/proof-of-burn-and-reputation-pledges/

OpenBazaar implements proof-of-burn in a different way. On the OpenBazaar network, users can choose to be pseudonymous, meaning you don’t know their true identity. As such, it can sometimes be difficult to determine if they are trustworthy or should be avoided. A reputation system is important to help inform the network of which participants have acted honestly in the past, and which haven’t. There are several facets to the OpenBazaar reputation system, which is still being built, and you can read about the overall system here.

One part of this system is Reputation Pledges. This means that a user has chosen to prove their commitment to their OpenBazaar identity by burning a certain amount of bitcoin. The act of burning coins shows the network that the user is committed to their identity because they’ve now expended resources on it, and if they incur a negative reputation then those resources will have gone to waste.

To help understand the importance of this, consider a similar example in the real world. Travelling salesmen were often treated with skepticism by the inhabitants of the towns they visited. Apart from the annoyance of their house calls, why would people be reluctant to purchase items from travelling salesmen? Two reasons. One, they cannot rely on reputation to determine if the salesman is selling quality merchandise or not; the other customers of this salesmen aren’t located nearby. Two, the salesman has nothing to lose if their products turn out to be poor quality – there is no reputation damage if they leave, and since there is no brick-and-mortar store they’ve invested in, they can simply peddle their wares elsewhere.

You can think of it similarly to OpenBazaar users. If there’s no cost to creating a new identity, or if there is no brick-and-mortar store to keep you in one place, you can simply abandon an identity once it has received negative feedback. Obviously online, you don’t have a physical store, but a Reputation Pledge is a similar concept: you’ve invested resources that create an incentive to keep a good reputation and impose a significant cost for abandoning that reputation.

Bear, you have been warned 

Yet another innovative invention to come from Bitcoin.  Proof-of-Burn to show Proof of Vested Interest, used here to establish Proof of Reputation.  This is actually a unique and valuable invention, separate from Open Bazaar.

[figmentofmyass]

"burning a certain amount of bitcoin" --> did i miss something? what does this mean exactly? are coins actually being lost? i won't lie, this is going right over my head apparently.

[lyth0s]

On the surface it sounds like you will probably have to send bitcoins to the developers of the open bazaar app and those coins are being called "burned", but in reality you are just giving those coins to the app developers. Essentially just making it so you are paying them for advertising space, which isn't really any "trust" it just means that at the very minimum when you scam people it will be worth more than the coins you sent the app developers

[rebuilder]

From what I read elsewhere, to burn coins  you send them to a Bitcoin address with no known private key, like http://blockexplorer.com/address/1BitcoinEaterAddressDontSendf59kuE. No-one gets them, unless they're able to brute-force the private key. That's unlikely to say the least.


I'm not really convinced this is such a great idea, though. It seems like burning would only increase trust if the trades relying on it were smaller than the amount burned, and any potential scam were of the kind that could only be performed once. So, useful for gaining a foothold, but hardly for long term trust, especially as the coins burned are lost whether the burner later on acts well or not.

A lot of scams seem to involve people building up trust as honest traders, often with no initial intention of scamming anyone. Later on, as the business grows as do the sums involved, pulling a one-off disappearance act and running with the money becomes much more tempting than when they were dealing with pocket money. I don't see how burning coins addresses any serious problems.

[bitebits]

They will really be destructed:
https://blog.openbazaar.org/proof-of-burn-and-reputation-pledges/

I like the idea better of sending the coins to charity, and have a voting system on open bazaar to which charity the coins need to go.

[raid_n]

No, proof of burn usually involves you sending bitcoins to an invalid address that is technically unspendable.

There are discussions with open bazaar to somehow avoid this actual destruction (i.e donating ) but this can be exploited.

[bitebits]

I don't see how burning coins addresses any serious problems.

It gets your account started (build trust from air). I will have a user review system as well, which will be more relevant over time for the particular salesman.
http://cointelegraph.com/news/112388/openbazaar-explains-proof-of-burn-as-it-nears-beta-release

[xDan]

OpenBazaar will be so damn beautiful if it delivers. I assume costs will be lower than Ebay. It could totally replace Ebay. I just hope they can make it usable.

I like the idea better of sending the coins to charity, and have a voting system on open bazaar to which charity the coins need to go.

burning is effectively a donation to all other Bitcoin holders. I like that. And it's simple.

[djangocoin]

ELI5 proof of burn for me?

[piramida]

OpenBazaar will be so damn beautiful if it delivers. I assume costs will be lower than Ebay. It could totally replace Ebay. I just hope they can make it usable.

In theory, it could replace ebay, amazon, craigs list, silkroad, and a million smaller regional clones of these. Besides being a first really international digital trading platform, it could also establish a trusted identity foundation for all other bitcoin peer-to-peer services like messaging, financial services, collaboration, gaming, whatever else - once you've built your reputation with money, it would be costly and time-consuming to replace it, so you would at least try to keep it clean. Purchasing an established account for nefarious purposes would be pretty impossible as you can not make the seller "forget" the PK, unless you can physically put him in a cage but that is a problem from another area of human relations All in all, I have huge hopes for this.

[zimmah]

"burning a certain amount of bitcoin" --> did i miss something? what does this mean exactly? are coins actually being lost? i won't lie, this is going right over my head apparently.

basically sending the bitcoins to a random address that no one has the key to, essentially making sure the bitcoin is never used again.

[knight22]

ELI5 proof of burn for me?

Basically send your bitcoins to an address that no one has the private key in a provable manner so the bitcoins are lost forever.

[Dafar]

So is this the new SilkRoad?


Can I buy drugs and assassins here?

[xDan]

OpenBazaar will be so damn beautiful if it delivers. I assume costs will be lower than Ebay. It could totally replace Ebay. I just hope they can make it usable.

In theory, it could replace ebay, amazon, craigs list, silkroad, and a million smaller regional clones of these. Besides being a first really international digital trading platform, it could also establish a trusted identity foundation for all other bitcoin peer-to-peer services like messaging, financial services, collaboration, gaming, whatever else - once you've built your reputation with money, it would be costly and time-consuming to replace it, so you would at least try to keep it clean. Purchasing an established account for nefarious purposes would be pretty impossible as you can not make the seller "forget" the PK, unless you can physically put him in a cage but that is a problem from another area of human relations All in all, I have huge hopes for this.

Ohhh yeah. This is all really really exciting. Honestly might be the killer app.

So is this the new SilkRoad?

No. This is the new Ebay, that, totally incidentally, may have no particular limits on what you can sell...

[lyth0s]

If they use 1CounterpartyXXXXXXXXXXXXXXXUWLpVr as stated here: https://www.counterparty.co/why-proof-of-burn/ the first part could definitely just be a vanity address, but does the ending of UWLpVr to verify that it's a valid bitcoin address somehow make sure that its not just a vanity address starting with 1Counterparty?

[knight22]

So is this the new SilkRoad?


Can I buy drugs and assassins here?

Let's hope they will fork the code and create their own network.

[EricTyle]

How much POB are we talking about? First of all why would we entertain the idea of permanently removing BTC from the ecosystem? Today's change can be next decade's car (or for you bears that want to start a fight for no reason, it could also be next decade's trash).

Also I still don't understand how POB is necessary. I read it but ELI5 someone? Because I don't see why its necessary.

In the past, this has primarily been used to bootstrap one cryptocurrency from another.

In what past? Bitcoin is the first cyrptocurrency. And if it happened to alt coins, that doesn't mean anything for bitcoin.

The act of burning coins shows the network that the user is committed to their identity because they’ve now expended resources on it, and if they incur a negative reputation then those resources will have gone to waste.

I get this except for the part where its undetermined how much would be burned. Then when the price changes, the value of the POB changes too. I could imagine someone burning 0.01 today and in ten years that pledge looks like a lot more (or less, for you bears but for this example bear with me). So what if someone pledged a lot of accounts or addresses, and in ten years used those accounts to scam people? Sure looked like they invested a lot

[knight22]

How much POB are we talking about? First of all why would we entertain the idea of permanently removing BTC from the ecosystem? Today's change can be next decade's car (or for you bears that want to start a fight for no reason, it could also be next decade's trash).

Also I still don't understand how POB is necessary. I read it but ELI5 someone? Because I don't see why its necessary.

POB address will be pegged to a reputation address. At some point, you don't want to screw your reputation address and start another one because your reputation also cost you money. It's not a fool proof system but it gives more incentives to play by the rules. Serious businesses also have an opportunity to build trust quicker.

[piramida]

Can I buy drugs and assassins here?

Strange selection of goods, but yes why not. I'd suggest sticking to light drugs though, heroin and assassins can be deadly.