OpenBazaar hasn’t defeated those two giants yet. Despite the hyping at the beginning, the project is only taking off in a niche market.
OpenBazaar originated from DarkMarket app and has since then been updated greatly and switched over to Google Go Language (server part). Many improvements such as multi wallet, offline ordering and messaging, IPFS protocol and so forth.
Reasons for OpenBazaar lack of growth:
- Lack of Buying Demand for Bitcoin Payments
- OpenBazaar vs Amazon and eBay: Apples vs Oranges
- Tech Wise: way different
- What the hell is Bitcoin?
- Bad Advice from Thought Leaders
- Public Appeal
- Grassroot “Social Market” Effort Against OpenBazaar
- Lack of in-Demand Goods
- Sellers Unaware of the Challenges?
- Sellers that Rage Quit
- Pump and Dump is Ruining Bitcoin
Lack of Buying Demand for Bitcoin Payments
Bitcoin Payments for physical goods are not common. You could set up any OpenBazaar store, WooCommerce Website, and take whatever coin floats your boat. At the end of the monthly sales are meager. No matter how hard you market or what you sell.
Only a select few categories seem to appeal to Bitcoiners. Such as Bitcoin Hats and Hoodies, Jewelry, mid and high ticket electronics, Bitcoin for Fiat (snail mail listings). Bitcoin for Steam Games. Gaming related stuff such as Video Cards and newer console games.
Perhaps big companies like Amazon or Newegg can pull off some Bitcoin Payments but not small stores.
I don’t see this as an issue related to OpenBazaar but rather lack of Bitcoin adoption.
OpenBazaar vs Amazon and eBay: Apples vs Oranges
Both serve different niche markets. OpenBazaar could appeal to side hustlers and those in-between (not an LLC but a high volume low ticket item seller ect.) Due to design it appeals more to people who can’t afford expensive overhead to run a large business on Amazon or eBay.
OpenBazaar could get a few large volume sellers to come join them, but most business go were the most money is. They would put profits ahead of coin loyalty.
Due to Reputation and Public Appeal, large Business sellers are skeptical of OpenBazaar.
Tech Wise: way different
Amazon and eBay being centralized eCommerce platforms. The advantages are payments are quick and easy. Platform is up all time, no missed payments.
Buyers get recourse via chargebacks if goods are not delivered or as described.
OpenBazaar uses IPFS (interplanetary file system) which allows for online and offline ordering. However, stores are completely offline and unreachable after a few days. You should run the app for around of 30 minutes per day, ideally most of the day to make sure you can refresh quickly and reseed other stores.
Instead of buyers doing Credit Card chargebacks, OpenBazaar uses moderated payments to allow moderators from community to make rulings. Now they have verified moderators to make sure people don’t moderator own stores.
OpenBazaar has gotten flack for allow servers to have un-moderated stores, thus some exit scammers took buyers money and ran. Some even still sell as illegal goods sellers, but never deliver the products.
It’s a Pandora’s box, if illegal goods sellers got censored from OpenBazaar then it would likely cause a chain reaction of centralization. Then it would become a centralized Mercari-Clone App with seller fees. Would OpenBazaar then start to flush out smaller sellers to cater to large volume sellers, like other eCommerce platforms have done? Small volume side hustlers would get the boot for a few negative feedbacks and returns, while big sellers moving 1,000 items a month could stiff 10 out of 1,000 customers and still be on the platform?
What the hell is Bitcoin?
That’s what most random people are thinking. Back when I was talking about Bitcoin in 2010 during my school years everyone though I was just looking for a pump and dump and Bitcoin would never be money.
Baby Boomers are very skeptical of Bitcoin, good lucky onboarding them for Bitcoin or even Online Banking for that matter.
Bad Advice from Thought Leaders
Many prominent figures in crypto twitter and social media are pushing for HODL (hording Bitcoin), and only spending small amounts. Promote us to use credit cards and Fiat for everyday purposes.
If Bitcoin is predominately used a tax heaven, store of value, nest egg or whatever you want to call it. It will not become sound money. Regular usage by consumers would likely make it viable alternative to Fiat and or PayPal.
Since the Bitcoin Cash Hashwar split, a handful of figures on the Bitcoin SV Side have been very vocal against OpenBazaar since it fits more into a libertarian philosophy instead of a pro-corporate eCommerce platform. Brian Hoffman and Chris Pacia have defended and fought against these critics. Fighting on both sides hasn’t helped ether Bitcoin SV or OpenBazaar grow.
There is also a Social Media effort against OpenBazaar due to lack of Lightning Network support and addition of altcoins on BTC Camp.
Grassroot “Social Market” Effort Against OpenBazaar
There has been a large campaign by BTC Camp to boycott OpenBazaar over added other coins aside from BTC as in App payments. These guys couldn’t just leave the platform and move on. But instead spread meme wars and FUD all over Brian Hoffman’s Twitter feed.
You get more bees with honey than vinegar…
Lack of in-Demand Goods
Many sellers are selling stuff not appealing to most Bitcoiners. Flea Market low ticket stuff might sell like crazy at the flea market but not on OpenBazaar. Likewise, what is big on Etsy or eBay doesn’t equal the next huge payday on OB2.
Sellers Unaware of the Challenges?
Some sellers want to see a huge payday and clear out the clutter within a week. Closing shop at the end of the month and opening back up months or years later.
That’s not happening on OpenBazaar, WooCommerce, Magento or any eCommerce platform. Building your brand, reputation, and community following takes a long time. This is the route for longer term business and side hustlers looking to sell for a long time.
Side Hustlers looking to clear clutter fast should turn to yard sales, flea markets, Etsy and eBay.
OpenBazaar is a marathon and eBay is a sprint.
Sellers that Rage Quit
After finding out they are not clearing out a few homes of low ticket clutter, sellers might give up in a few weeks or months. They don’t see quick results and rage quit.
I’ve seen many items that didn’t sell on OpenBazaar also fail to sell on eBay as well. Mainly due to lack of demand due to overabundance or item is not sought after.
Tech items are in demand but that doesn’t mean you’ll unload 50 computer mice or 100 USB cables within two months. Especially when people can order from China at lower costs.
You are not just competing with Brick and Mortar and online domestic stores, you are competing with every store.
Pump and Dump is Ruining Bitcoin
As many are aware there is many people in Crypto Communities that are in it solely for the “Pump and Dump”. Many new ICO’s form and people walk away with tons of funding without release a single product or a cryptocurrency. Some people have the Digital Stocks mentality and look at Coinbase as a digital New York Stock Exchange
Although many of these factors don’t directly related to OpenBazaar, their outcome does alter the app’s fate. Selling on eCommerce sites has changed greatly over the past 15 years. What method worked and got tons of sales in the past, might not apply today. It’s not entirely one person’s fault why it’s only targeting a small market.
This article wasn’t made to cover for OpenBazaar’s short comings. OB1 Team could have made a better networking protocol on the server part and did far more marketing.
OpenBazaar is a free app to experiment with selling on. Sure it’s not going to make you a millionaire but it serves a niche market.