 Welcome to the Daily Decrypt, where currency competition will set you free. I am Amanda B. Johnson, your host, and today's episode is brought to you by Privacy Shell. If you've been in the crypto sphere for very long, you've likely heard about OpenBizarre, the peer-to-peer protocol intended for use as marketplaces. I've spoken today with OpenBizarre's project lead, Brian Hoffman, about its move recently from Testnet to Mainnet and all that entails. So you are Brian Hoffman, project lead. I want to say lead developer, because that's a term I've heard more often, but I'm betting project lead is different. So tell us what you do at OpenBizarre. Okay, yeah. My role started out as the primary developer on the project. So it's kind of morphed into more of a maintainer role as more people got involved. But I basically managed the whole project, make sure that we understand what direction we're going in. And kind of developer wrangling is the general responsibility that I have. Developer wrangling. All right, all right. And OpenBizarre went Mainnet, what, like three days ago or something? Is that correct? Monday, yeah. Okay, yeah. So to start off, I want to get a firm grasp of the network architecture, basically, like, so let's say I want to start an OpenBizarre store that I want to sell cookies. And am I going to host my store? Or is my store hosted by everybody who is running OpenBizarre at any given time? How does that work? Yes, and yes. So it's kind of a mix. So we have a peer to peer network. So everybody runs the app and all the apps talk to each other directly. But only some of the data is actually shared across the nodes. So for instance, if I send a chat message to somebody, that encrypted message will get stored within the network somewhere. It could be on any of the nodes based on some technical stuff. And then when you would log back on, you could retrieve those chat messages. But other data, such as store listings, which include large images and lots of data about the product or service you're selling, those we have decided to not store within the network because as the network is young and small and only full of so many users, we don't want to burden everybody else with potentially spam or something like that. So we are looking at other alternatives that in the future, we won't require people to actually have to run their stores from their home computer 24 hours a day. There will probably be other nodes that are kind of like storage nodes or something like that. But that's probably a little ways out. And so right now, yes, you will have to run it yourself. And what kind of, okay, all right. About, are you aware of how many people are running a node right now? And I guess when I say running a node, that sounds like, whoa, like downloading a blockchain. But I mean, one can be considered a node by simply having the open bizarre client open on one's computer, correct? Yeah, yeah, exactly. So when we use the term node pretty loosely, it's not as intense as Bitcoin full node per se. It's more of just appear on the network. So pure is probably a better term. But yeah, everybody is a peer, they all have they run a node, so to speak, on the network that connects to each other. Yeah. Do you know about how many people are using open bizarre like right now, like at any given moment? Is that something that can be seen? The metrics for the network are pretty challenging to really nail down exactly, since it's not a centralized service. But I can I can give you a few numbers that might give you a better idea. So since Monday, we've gotten about close to 37,000 downloads of the software. And we run one of the recommended nodes to connect to when you start the software. So by default, most users will add that person as a like to follow them. That node right now has somewhere between seven and eight thousand followers, I believe. So those would be people that actually got up on the network and were running. And I think according to some other statistics that are captured, we see several hundred storefront live at any given time right now. Okay. And now I was considering making a storefront myself to sell, you know, like, hey, like daily decrypt sponsorship packages, which we already sell on our website. And then I had to pause because I read a piece the other day in which you actually were interviewed. I forget where it was published. I will post the link below after I've found it again, in which you said that privacy measures were specifically not added to the open bizarre protocol. And so if I were to host a daily decrypt store, would anybody be able to say find out my IP address? Yeah. So one of the natures of the period of your network is that your nodes IP address is exposed at the moment. So it's not any different than what Skype has been like for, you know, over a decade. I think they just recently started hiding IP addresses. But you know, essentially, what I say the privacy wasn't prioritized. What I mean was that we've gotten a lot of requests for having a tour anonymizer support. And that would allow people to run stores completely obfuscated from any other place to have hidden services running. And that's something that we put on the back burner just because of several reasons, which I might even be in that post that you link. But, you know, just due to technical challenges and other priorities, such as network stability, having something like tour support slows down the network. And when it's so small and immature, it's hard to optimize efficiency when you have something else on top of it slowing things down. There's I mean, there's a lot of reasons, but your data is not insecure. Just because your IP address is exposed does not mean that we are not doing encryption between all the nodes. Other nodes cannot see what you're viewing or purchasing or sharing. All of that is still encrypted and protected. So merchants and buyers don't have anything to be concerned about. Like you buying some ointment or something is not exposed on the network just because your IP address is there. I think the things that you might be exposed to are if you are a popular merchant, perhaps somebody decides to try and maybe DDoS your node or something like that. But your privacy is not really impacted other than that being exposed. All right. So let's shift gears to monetization. Now, if I remember correctly, OpenBazaar at the project received about a million US dollars in some venture capital funding last year from, I believe, Andreessen Horowitz. Is that correct? Yeah. Union Square Ventures led the brown with Andreessen. Yeah. And you got a million dollars. Yeah. Okay. And so what is the return on investment model there? So for them, I believe and, you know, I mean, obviously they could clarify further if they wanted, but their idea is that this technology is something that it's a long-term goal. It's not something that they see as being an eBay usurper tomorrow. They see it as a long-term play. And so, you know, that's how they approach it. And in terms of an ROI, I don't think that they expect a significant amount of return on their investment like within a year. I think most generally, VC plays are looking at five to 10 year time spans for huge returns. And they are hoping that this is something that's big, not a $5 million return, but, you know, a billion dollar or two billion because that's the kind of companies they invest in. So how would that return come about? Like, would there be like, are there fees on the network? Or like, how would, you know, regardless of how long it takes to get a return, like literally, how would the, how would funds go from open bizarre users back to the folks at the venture capital firm? That's a great question. So basically what will happen is that our company is actually called OB-1. Open bizarre is actually the open source protocol, right? And there's no profit generation from that. Like OB-1 does not own any of the code, does not profit from transactions, et cetera. What OB-1 is going to be gearing up to do is provide services to merchants and users that will be valuable that they'll want to pay for in more of an Alucard style, as opposed to eBay, where you pay no matter what for all the services. And so some of the things that we're looking at are curated listings, maybe promoted search, improved search capabilities. I mean, some of this stuff is not like, it's not like a whiz bang, like one feature. It's more of a suite of things and services that we could provide. And, you know, obviously our other responsibilities are to foster the network. So there's a lot going on. We'll probably have a lot more to announce in the next few months as we get through the launch. So hopefully we'll have plenty of ROI for them to enjoy. And now what would you, so say I am a person who sells my things on eBay or Etsy or Amazon or whatever. Why would I want to use open bizarre to sell my things? I think that there's a lot of good reasons why you'd want to do that. One is, you know, at least initially, there's not a lot of really great places that focus specifically on Bitcoin to sell your goods. There used to be a marketplace called Bitmit back in the day. And it wasn't super popular, but it started to prove the concept that these Bitcoin specific marketplaces could spring up. And so, you know, one of the foundational reasons why we built open bizarre is because we wanted to open up trade globally for everybody. A lot of marketplaces that are centralized, they have legal obligations to do KYC kind of things for their customers. So then they basically back off of offering their service in smaller countries or maybe third world countries, places that have challenging laws, or they don't understand the international ramifications of doing business there, where open with our doesn't have that limitation. Anybody anywhere can spring up a store. We've seen over 126 countries have users that run the software, and they're selling goods to each other. They're selling whatever they want, however they want, for how much money they want to sell it for. And that's a really powerful concept. I don't think that people understand, you know, it's very simple, it's very easy and frictionless to jump on an Etsy and sell products here in the US, but in other places, they don't have that opportunity. And so, I think opening those doors is just, to us, it's a groundbreaking thought. And that's our primary focus. You know, whether it meets all of the requirements for something that you're expecting, I mean, we have a lot of users that are either unhappy or happy based on things that we've done, but we have a vision of opening up that trade. And the fact that it costs nothing other than the Bitcoin transaction really helps too. We had a guy sell, I believe he sold like waffle cookies or something that Ian and his family make at home on the network, they made a bunch of orders, and I think they processed that whole order for like five cents, which is pretty crazy, because if you sell $40 of goods on an eBay, you're going to pay like $4, at least in fees. So that's a huge savings if you're doing a lot of trade. Yeah, potentially aside from the hosting that would be required to continually keep your store up, that would have a cost to it, however. Yeah, I mean, some people are running it off of their local, you know, their own ISP, they're running it on their own home computer, some are running on Raspberry Pis, and some people that are more serious want it to be up on hosting and running on digital ocean for $10 a month. I think, like I said before, we're going forward, we're going to be working really hard to lessen the burden on running a store for users. We definitely recognize that that kind of sucks in some respects, but we definitely will be improving that. And I think that what we see right now will look a lot different in the future as we evolve. So if there were to be, like say a fork of OpenBazaar, and the only difference between the current version of OpenBazaar and this fork was that the fork protected IP addresses using, as you mentioned, perhaps Tor, or however else it did that, do you think that that network would perform better or not better than current OpenBazaar? That's an interesting question because I think there's a couple of things you got to unpack there. One thing to note up front though is that if someone came in forked OpenBazaar, let's say, to add one feature, let's say anonymous access, it'd be very easy for us to pull that back into our code as well and gain that. And we do that a lot. People submit pull requests to our code and we merge it and we get new features. That's how open source works. So I don't think we're at a huge threat there unless it's something we really don't want to do. Will it make the network, how will it affect the network to implement something like that? I think it could only make it grow. Having that kind of capability is on our road map, and so we think it's super important. Where I think it will affect growth may be in more of the dark net marketplace type of activity. We've already seen people trying even on our existing network to sell illegal goods and services, whether they're real or not. I don't know, but I definitely think that that would improve it because they have needs too. They have a marketplace that needs to be as efficient as possible and if a new tool comes along that makes things more efficient for them, more secure private, they're going to move to it. And that's out of our control. But I think that that proves the value of having a decentralized network like OpenBazaar is that it's up to the users to decide what is appropriate on the network, what happens, what goes on. It's not up to us as the developers or as OB-1 to dictate to users what they should and shouldn't do. That's their responsibility. All right, so let's say I see that there's an OpenBazaar store that is selling the best-looking ecstasy or LSD that I've ever seen, and I decide that rather than paying them for it, I wonder if I could just perhaps go just steal it from them instead. How would I find out the IP address that their store is running? So I think their IP address is exposed, but I think if you were going to run something where you had that kind of a concern, let's say I was dealing with anything valuable, the stockpile of gold, and I didn't want people to find me, you can run the service through a VPN. So if you have a trusted VPN service, you can hide your IP. We've run our services through different VPNs, even multiple VPNs. So it looks like you're in India or somewhere else. So I think some of the concerns about that are a little bit overblown. I would say even Tor is not flawless. We've seen that be proven. So when we talk in absolutes, I think it's dangerous because security is always evolving. And as someone who has been in cybersecurity for over 10 years, I'm very intimately familiar with the challenges there. And it's not something that we ignore. We take it very seriously. So is there a side from Tor to try to obfuscate IP addresses, which as you've said has been proven to be not perfectly secure if the attacker is quite motivated and quite well funded? Are there any other ways aside from Tor to just obfuscate IP addresses? Or is that just kind of like not how TCP IP works? I think that there's there's numerous technologies out there. Tor is obviously the most well funded and most respected and most used. But you know, there's other things like I2P, which is something we're looking at as well, which may be not as secure since it's not used as much. I'm personally not an I2P super expert or anything, but that's safe to assume that government attackers or anybody else are probably looking at that and looking for vulnerabilities as well. So I think at the moment, the combination of running with VPNs and Tor is kind of best practices. Now, whether that's the same for a peer-to-peer network, since Tor is not really designed for peer-to-peer traffic, that remains to be said. But since it's on a roadmap, we're going to be finding out very soon how well it works, you know, and be investigating that. And if anybody watching this or reads about what we're doing, has expertise in that, we'd love to have their assistance as well. Very good. What do you think the killer app for OpenBazaar is? We were just talking about that this morning. I think one thing that's surfaced as we've used it this last week is for digital goods. I think it's a perfectly seamless way of transferring digital goods to other people. We see people selling songs, music. I even bought a little bit of random number that was generated by someone for like $0.30 or something, and it worked flawlessly. It was great. And I haven't seen anything so frictionless. It doesn't require you to sign up for an account, verify your email, do anything. I mean, you just send a few Bitcoins, and the next thing you know, you have your digital goods. So that's one thing that's super exciting for us. And I think as we improve the ability to transfer those goods, we'll just see more and more growth there, hopefully. All right. Well, to finish things up, I want to tell us a bit about this OB-1, your company, aside from OpenBazaar Development, which is the intended vehicle for offering basically services. I mean, I guess, aside from hosting costs, OpenBazaar could be considered like a free-me-up model. Like, all y'all say, hey, here's the protocol. And here, OB-1, here's some services that we might potentially want to sell. Yeah. I think as the main developers of the OpenBazaar project, we're very, very familiar with the limits and the potential gaps that are needed to be filled in the networks. For instance, search is a kind of a hard experience to create on a decentralized network because it's not very efficient and search needs to be very quick and optimized. So that's potentially an area that we're looking at really, really hard, how do we help merchants get their products discovered? We now have this marketplace that's open to just about anywhere in the world, but that doesn't mean that you're getting the visibility for great things that you're putting out there, right? Like, if there's just a billion items, how do you make it easy for people to discover good stuff? And that's going to be something that we really, really work on hard. We're going to be working with merchants, and that's the potential avenue for a lot of revenue growth, I think, because merchants invest a lot of money into advertising, promotion, things like that. And if we can provide a compelling tool that augments the OpenBazaar network, that could be a really, really huge opportunity. So that's some of what we're looking at right now, but it's still early days. We just got the network live. Our primary focus is making sure that OpenBazaar works properly, works efficiently, and at the core things operate well, and then we'll be worrying about revenue. So I know some companies work backwards from that, but our primary interest in getting the company funded was to fund development of OpenBazaar, not make a billion dollars. So that will remain our primary goal. Like your description reminds me of, I guess, torrent tracking sites, bit torrent being the protocol, but the torrent tracking sites being really what makes bit torrent usable to begin with. As you said, find what it is that you want out of the millions or billions of files that are flowing through the peer-to-peer protocol. That's exactly right. That's exactly right. You see searching in bit torrent, client doesn't really work very well, but a site like Pirate Bay, which is centralized, where they can control that experience, works really great for discovery. And I'm sure they're making tons of money off of ad revenue and things like that. So yeah, it's a proven model and it's obviously low-hanging fruit that any company can go out there and do. And we hope to compete as well. Yeah. Well, so when you, last question, when you say that the sort of the privacy aspects are on the roadmap, are we talking roadmap two months out, roadmap one year out, or what's that looking like? I'm probably the wrong person to ask. I told everybody that the project would be out in four months when it came out in April 2014, and here we are, April 2016. Yeah, whatever you tell me, I'm going to times by five regardless anyway. That's probably fair. That's probably fair and safe. But yeah, I think just based on funding and our position in the market and stuff, I think we're going to have to do it really, really soon. And we're just a small team of six guys. We only have one or two back-end programmers that are paid to work on it. So it's not something that we can just crank out in a week, but it's definitely already in progress and we're working towards it. So I would say it's months, not years before we'll see it. And will, so should OB1 come to function as like, as you said, like a pirate bay, like basically like as a search functionality for all of the products that are available on Open Bizarre. Do you plan to shun people who want to buy and sell things that are illegal or do you plan to index all of the products on Open Bizarre, regardless of what they are? Yeah, no, I think it would probably be the former because, you know, we are a U.S. corporation and so we are beholden to U.S. laws and we wouldn't want to put our our employees and their families in any kind of danger by doing things that fall afoul of U.S. law. And so, yeah, unfortunately, I think that that would be something that would probably be more restrictive. But you know, that's the beauty of the Open Protocol is that you can use that core experience. It may not be as efficient as what we're doing, but you know, if you do choose to do that, you want to do that and take that risk on, you know, that we will probably have competition from that angle. Well, that's an excellent note to finish on, Brian. The daily decrypt, we always say that we're all about currency competition in particular, but competition in general, really. So thank you for your time and yeah, best of luck. Thanks for a great question. Today's episode is brought to you by Privacy Shell, a company building crypto and blockchain companies. Privacy Shell today announced the feedback release of Top Secret, a secure P2P browser-based chat app available for lifetime use for one Bitcoin or is free for a limited time when you use the promo code daily decrypt in the checkout process at privacyshell.com. Well, kids, that's all I've got for you today. Why don't you tell me in the comment section whether or not you whatever host a store on OpenBazaar? Why or why not? Cheerio. Could a digital currency, a cryptocurrency run without a blockchain? Such was my question for Madesafe's Paige Peterson. A network node is the nodes that are hosting and routing data. And then the client node is one that the user, the client interacts with.