Digital Assets in OpenBazaar personal thoughts

Post date: Oct 7, 2015 5:20:32 PM

Digital Assets in OpenBazaar - Blog post by drwasho

Digital(ized) assets are important part of digitalizing trade. Items are transferred into electronic form using OpenBazaar and can be redeemed at any point. Technically OpenBazaar utilizes Bitcoin blockchain and public key encryption for making the assets transferable and secure.

The certificate type 1. is 'redeemable certificate' quite basic stuff.

But the type 2. is electronic keys, which is pretty interesting. It brings to mind all the James Bond villains with control keys or some CSI Cyber stuff. Lol. But yes, it's important thing.

Type 3. isn't so important afaik. Also the process how discount and gift certificate can be tied together with other purchases. Many git certificates and discounts often contain more or less complex rules for redemption.

There are already solutions providing these services. But OpenBazaar can bring new additions and improvements to the mix. One of most important feature is trust and on-line vendor reputation management.

OpenBazaar can fix many issues with Digital Assets. It works as contracting platform, as well as provides discovery network to find available contracts. Discovery and reputation allows it to work as a complete marketplace. Sellers get proper reputation based on previous deals and OpenBazaar can provide a distributed reputation system which is built into the process by default. As well as money can easily flow around using Bitcoin as payment method, pricing can still be made in Fiat currencies. Not forgetting standardized contracts using Ricardian contracts and JSON.

Understanding digital assets is easy, when you think those as gift certificates or gold certificates. You can trade the certificate freely on-line, and then someone will redeem it. Trading before redemption can be done completely freely on-line using OpenBazaars Securitized Digital Assets feature.

If you have studied history of money, you'll quickly find out that this is the way the notes actually got started. It was a paper being valued at something, like 10 squirrel skins or one ounce of gold. The paper could be traded and transferred around, without the physical assets being moved or handled. Of course the examples above were easy to transfer, but what if the asset on the paper would be twenty barrels of wheat? Or one hundred cows? Also moving around the digital assets makes market much more liquid because the asset can be moved quickly around. Bought or sold in seconds.

Asset holder need to trust the issuer, this will make it unlikely that pseudonymous users could issue digital assets on-line. But as we know, there are plenty of businesses doing this already.

Sorry, really quick notes and draft. Didn't have time to go this through. This is more like a dump of OB related stuff.

Related link: OpenBazaar Blog