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Silk Road's demise paves way for 'unstoppable' OpenBazaar's rise

The peer-to-peer market could fill Silk Road's shoes, and it could be much more difficult to bring down.

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Federal investigators may have taken down the Silk Road again, but now they face a much more difficult challenge – a decentralized market that has no sole proprietor or owner to arrest.

Silk Roads 1 and 2 both suffered the same fate once investigators found out who was behind them. That’s why many consider this week’s shut down of Silk Road 2.0 to be the beginning of the peer-to-peer OpenBazaar’s rise. The programmers who created and contribute to the open-source OpenBazaar don’t need to hide because, by essentially creating an ecommerce site that users can employ for their own purposes, they didn't necessarily do anything illegal.

Created by a group led by Amir Taaki, a well-known programmer who contributed to the Bitcoin project, the network was first introduced under the name DarkMarket at a Toronto Bitcoin Hackathon in April. DarkMarket took home the top prize at the event.

The project was later forked by a developer named Brian Hoffman, according to OpenBazaar’s Wikipedia page. By August, the name was changed to OpenBazaar "to improve its image online," the Guardian said.

I covered the DarkMarket project when it was introduced in April. Here’s my (loose) explanation from then on how it works:

According to Wired, the DarkMarket prototype runs as a daemon in the background of the user’s operating system and uses the ZeroMQ peer-to-peer networking commands to make the user’s PC act as a node in a distributed network. Each user is given a page from which to sell to other buyers on the network, in the same way eBay does (those who don’t intend to sell simply leave their page blank). Sales are conducted through a messaging system, and an “arbiter” is selected to act as an intermediary to make sure the deal goes over smoothly. These arbiters are simply other users who have been chosen by others to take that role. It sounds similar to how Reddit chooses moderators for its subreddits.

Once the agreement has been made, the three parties – buyer, seller, arbiter – create a new Bitcoin address that employs a "multisignature address," which combines the public encryption keys of each party that has access to the account. This Bitcoin address is used as an escrow to hold the money until the buyer has received the product. From there, depending on how successful the transaction was, the three parties distribute the money. Through this approach, the arbiter and buyer can prevent sellers from flaking on their end of an agreement, which some may be wont to do in a black market. That process, along with a rating and review system for each user, is intended to maintain civility among users.

Perhaps anticipating the rush of attention after the fall of Silk Road 2.0, OpenBazaar's Twitter account restated a disclaimer:

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