 And we are live. What's up guys? Welcome back to another episode. Today's special guest is Brian Hoffman. Now here's his quick bio. Brian's background is in computer science from James Madison University, which has led him to head several successful government and commercial projects during his career. Brian is currently the project maintainer for the newest venture, OpenBazaar, and the CEO of OB1. Brian began OpenBazaar when he forked the open source code from the 2014 Toronto Hackathon. Fuck, I didn't know that from Toronto. Winning proof of concept, a dark market, a decentralized Bitcoin marketplace, and has gone to raise more than 4.25 million from notable VCs such as Union Square Ventures, a 16Z blue yard digital currency group. And he recently spoke at the conferences around the world and guest lectured at Berkeley on Bitcoin and OpenBazaar. Brian, welcome to the show. How are you doing, man? I'm doing really good. Thanks for having me on the show. Very cool. I didn't know that it was from Toronto. Tell me about that, man. How did that go down? Yeah, so actually, I wasn't there in person. But there was a Bitcoin hackathon that was part of the conference that was going on in Toronto back in, I think, April of 2014. And a bunch of guys got together and kind of came up with the idea for dark market. But mostly, it was driven by Amir Taki. I think it was his idea. He had been talking with a couple of the guys from AirBits and some others about the idea of doing this marketplace. And so I think they were trying to raise money for dark wallet at the time. And the award was like $20,000. So they kind of hacked together in 48 hours this simple proof of concept to show how this unstoppable Silk Road alternative could be created using Bitcoin. Yep, that was dark market. Amir Taki, I heard he's back on the dark wallet web stuff. I don't know about dark wallet specifically. I think right now he's trying to create some kind of educational program in Syria to like, it's like a Bitcoin bootcamp to get people like developers up to speed there and use it for like political action. But I think that's probably a poor explanation of what he's trying to do, but yeah. I hear you. So you've gone through a couple of iterations of OpenBizarre. You've recently, I believe, launched a new version of that. Can you kind of give us more detail about that? Yeah, sure. So the project's been around since 2014, obviously. And it's gone through several different versions. We spent about a year kind of hacking away at the proof of concept and just seeing what we could do, what we could come up with, getting a developer team together. And then when we got funding after about a year, we said, OK, well, now we have like $1 million. Let's hire some real full time devs that are going to just focus on this completely and bring some like a little bit more professionalism to the whole thing. And so we spent another year kind of rewriting all of it and putting out our 1.0 version, which came out in April 2016. It's the one that's like super blue. And we thought at the time it was going to be something that was like really, it would work really well and it had all these great ideas. And it turns out when people started using it, we discovered a lot of things that didn't really work that well, some things that worked well. And so we just decided to take a look at something called IPFS, which Protocol Labs is building. And it kind of targeted some of the problems that we were having with the existing software. And I mean, I can explain a little bit of that. But suffice it to say, it was a good option to move our network to that style of network. And so we switched over to IPFS and it caused us to have to rebuild the app once again. And so we're literally right on the, I think probably in the next few days, we'll release the final 2.0 version, which is completely rewritten on IPFS. And way better, we've been going through beta for about a month now. And we've had about I think something like 40,000 users so far on that. And it's gotten a lot of really great feedback. And people are already using it. So it's pretty exciting. And so for anybody who is listening who really doesn't understand what OpenBazaar is, what's the best detail explanation you can give for it? Well, I think the easiest way to get people to wrap their head around it if they're not super up on the space is it's a marketplace similar to an eBay or an Amazon, except that there's really no corporation or company behind it. And so what that means is you still go and you search for products or whatever and you buy them. But there's no web server. It's basically just your application talking to someone else's application directly. And through the magic of Bitcoin, obviously, you're able to basically do all the things that you would need a centralized marketplace to do. So eBay would, they provide the place to put your listings. They provide the escrow service. They provide customer support. All that stuff is provided by the company. And in OpenBazaar's case, there is no company. And so it's a lot more private, a lot more secure to do business with people directly, which is kind of the idea behind the name OpenBazaar. Bazaar is like a local marketplace where people go and they talk and they haggle. It's a much more intimate experience. And so the idea here is that we're not thrusting you onto this massive Amazon marketplace where a corporation manages it. You're actually talking with people. You can chat within the program. You can talk with them. You can do a lot more interesting things with it. And so right now, the only option for commerce is Bitcoin. Are you guys planning on adding other crypto into it? Yeah, so early on, we made the decision to just primarily focus on Bitcoin. I mean, in the very beginning, there wasn't really a lot of other options. I don't even think Ethereum was finished at the time. And the other altcoins had like nothing in terms of volume of usage. So we just wanted to keep it simple and stick with Bitcoin. But we ultimately envision OpenBazaar as a marketplace protocol that's agnostic to all the blockchains. In fact, we had a hackathon a little while back where some people hacked in Sprite payments, which was kind of interesting because you could pay with credit card. And that certainly could work. I mean, there's changes the way it functions, but we have a contracting system inside of OpenBazaar that is not tied to, it's not Ethereum smart contracts, it's not Bitcoin smart contract. It's just literally just like a contracting system that is completely blockchain agnostic. And that was on purpose. We want to be able to support all these different coins. So let's say I log into OpenBazaar, I see. So how easy is onboarding process? What does it take to get on OpenBazaar? So in terms of other marketplaces, it's pretty simple. Like you basically just download the desktop app. Right now it's only a desktop application, but it runs on Mac, it runs on Windows and Linux. You just download the app, install it. And then once you start the application, you're there. You have a store. I mean, all you have to do is create a listing, which takes a few minutes. There's no registration process because we're not collecting identity information or anything like that. There's no need to like, there's no login. It basically all running off of your own computer. So it's pretty quick. Like I would say less than five minutes, you can get a store up and running. So for example, in Amazon's case, they'll do all the shipping. They'll do logistics for you. And I'm assuming this is very similar to eBay where the individual himself would do the shipping. Yeah, exactly. So one of the benefits of having those big marketplaces is they have a lot of integrations with third-party services. They have a lot of tie-ins with fulfillment, shipping systems, which is a non-starter I think for some merchants. They have a whole workflow that they go through. So asking them to move off of that into something a little bit more rudimentary is probably a big ask. But you know, I mean the software is open source and so we're hoping that as we grow and more people come onto the platform and find it valuable that they'll help us build some of those integrations or work with us to try and tie some of that stuff in. It's harder for us to do like vertical integration like Amazon does where like they can just give everybody shipping capabilities or whatever because we don't have that centralization in that control. Like we don't see exactly what people are sending. We don't have access to the addresses that they're shipping to. Like there's no way to do that. So it presents an interesting challenge. But you know, we think that as we go we'll like start to tackle these things one by one. I'm curious stuff from a business standpoint. For example, he had notable VC such as Union Square, A16Z, et cetera. Have you guys given thought of going on in the future? Obviously users are the most important thing and how frequently they're using it and merchants using it. Have you guys given thought of new business models that OpenBizarre will create? Yeah, of course. You know, our thought process around monetization has changed so much from the beginning to like now. I mean, we started out with it wasn't ever designed to make money. I mean, it was just an open protocol that people could contribute to. Then we raised VC and obviously we had to like wrap our heads around the idea of actually making money. But it was super notional. Like even our investors, we got together and we said, look, this seems like an interesting idea. Like we don't even know if this can be monetized because we're trying to disintermediate all these other systems where they're charging fees and all this stuff. Like that's how they make their money. So our idea always was like, okay, look, we have this marketplace with this open protocol that we can't monetize or that we're like purposely keeping monetization out of. And where is the opportunity to make money? We think, okay, it's at the edges. So for instance, you mentioned like shipping integration. Okay, so maybe there's a way that we can provide some tools that tie into OpenBizarre, the protocol that we wouldn't want to bake into the protocol itself, but would still be valuable for serious merchants that are doing like large fulfillment, large shipping. Like we could build those integration tools and sell those services. And because we know OpenBizarre really well, we could build them easily and provide support and all that. So sort of like a, not necessarily like a red hat. Well Shopify is kind of like that. Even though you as a store owner, you pay a little bit. But if you're like a big store owner, you have to pay for all the extra applications on top of that. And it adds up like some of them like 20 bucks a month, 30 bucks a month, but you need like 10, 15 of those nonstop. Yeah, and actually, you know, I mean, the merchants that are serious, that are making a good amount of money are willing to pay for things that are useful. So that seems a reasonable expectation. The only challenge with that is that you actually have to have a marketplace that has enough users and enough traction to have a good customer base. You know, early on OpenBizarre doesn't really have that many users. And so, you know, like Obi-Wan hasn't really built any of those services yet. We dabbled with a couple of like hosting things, but there's not enough users yet to like really have a meaningful billion dollar business, which is what like these types of VCs are looking for. And when you talk about users, where are you finding most of the users that are coming from right now? So over the years, like mostly it's been like Europe and North America, which makes sense. Cause I think that's where, you know, the super technical people and, you know, a lot of like what Bitcoin normally is being used for is outside of like mining and stuff. But we are starting to see a lot more interest in India and in China. And, you know, there's a lot of business. I mean, China's huge for business on, you know, e-commerce obviously with Alibaba and others. And, you know, those marketplaces are doing just like eBay and Amazon. They're starting to raise their fees. They're starting to exert more control. They're kind of limiting a lot of like the way that they do businesses and changing their models up. And so I think that they're much more willing to like explore alternatives. And we're seeing that like, for instance, there's this like one guy who basically lives like really close to factories and he like negotiates deals and he can like do custom product orders and something like you really just, you don't see here in the Western world, but like is super available through Open Bazaar, which is like completely different. And it's a lot cheaper too because, you know, he's getting charged like 25% or something when he does it through Alibaba. So we're hoping that those types of merchants will come over and like find some value here. I didn't see possibility for business integration. For example, let's say a merchant accepting Bitcoin or Ether or whatever in the future and you need a rail system to convert that into Fiat to pay for your overhead. There could even be a business application there where you work with certain merchant accounts or banks for them to actually integrate with Open Bazaar. Yeah, so, you know, this is another like area where I think people like Obi-Wan would provide some extra value because we wouldn't necessarily like, we try not to like bake like a certain specific third party into the app itself. So there's one caveat. We do have shapeshift integration, which we made a compromise on that because we knew we weren't gonna be able to support altcoin payments for a while. So we allow people to pay using shapeshift in the app, but like we don't really have tie-ins to like coin base, for instance, to get out to Fiat or like, you know, Unocoin or whoever it would be. But, you know, there's no reason why people couldn't provide some kind of plug-in or something on top of that and do that and take advantage of that because you're right. I mean, until the world really gets behind cryptocurrencies and you can pay for all of your overhead and stuff with cryptocurrency rather than, you know, Fiat, they're gonna have to have those bridges in place. On a side note, viewing Open Bazaar, have you seen some interesting say patterns? Like, have you noticed certain products are being sold more than others? In the first version, it was like super random. You know, we saw like some merchants would do better than others, but it wasn't like one specific type of product that would do really well. You know, I think it's always an interesting question because the way that people ask it, it makes it seem like, oh, everything has equal opportunity to be sold. So like what's the most popular thing? But what really happens is it's more like, well, which merchants are out there pushing their products on Twitter or on Reddit or like Facebook and like who's marketing it better and who's got a better looking page and like there's a lot to it. I mean, there's, you know, the second half of your business is not just opening your store. It's marketing yourself. And so the things that do really well sometimes are really odd. I mean, like we have like a huge comic book store. The guy has like 2,000 comic books or something for sale and he sells a bunch of those because he is like a big part of the market. When people browse, they see a lot of comic books and you know, like he does advertising and there's like other people that do the same thing. So, but I would say like overall the things that are selling the most are like clothing and like smaller priced items. I think people are still not quite willing to take the risk to buy huge things yet. You know, because it's a new system and they don't know if they can trust the vendors yet. In 2.0, we are seeing an interesting trend though. There is starting to be more people like trying to do some of the stuff from like dark net markets, which is a shift. We didn't expect that much in the first version because we didn't really have very good and anonymous support. So it wasn't really like a great option. In this version, we've put in tour and so we are seeing a little bit more traffic coming from those types of vendors but our search engine kind of filters out the illicit stuff. So it's there, but it's not really like first and foremost but we are seeing people use it. So that is one new area that we weren't really expecting. And you mentioned like India and China. Are there, I'm just curious maybe you know this answer. Are there countries in the world where people don't have access to eBay? Cool. Yeah, so eBay is interesting because eBay, the corporation I believe owns a bunch of like subsidiary marketplaces, right? So like I think they've acquired smaller e-commerce platforms like around the world. I guess that's easier than trying to figure how to get eBay into those areas and like supporting those countries. I know like in South America, I believe they have like Mercado Libre which is like an alternative that they own. So I think most of the world has some kind of option but they all have like separate rules and they don't have that reach. Like if you're selling things on Mercado Libre, I don't think that like somebody from the US can buy from you, right? So it's not like truly global marketplace. They're kind of more micro, you know for that geography. So, it really depends on which country we're talking about on how great their options are. So moving forward, where do you envision open Bazaar within say next year or two? So then over the next year, so 2.0 was really about like getting like the basic marketplace like working again. Like I said, we did that on 1.0 but we identified all these like kind of critical architecture problems. For instance, you have to run the store all the time, 24 hours a day if you want to have your store open. We kind of resolved that with IPFS and the new version. So you don't have to do that. So now we've kind of gotten this offer back to like the idea of just doing simple marketplace stuff. So the next year is really going to be focused on expanding that and doing new use cases. So one thing that we're going to be bringing out is something called channels. And right now when you open up open Bazaar, you kind of, you get a search page and it kind of just throws up some random stuff. And there's some categories suggested and things like that, but it's not a lot of like, there's not a lot of curation going on. It's really just like kind of a raw view of the network with channels. We're going to allow people to create things similar to like a Pinterest pin board. So you'd be able to like kind of configure how you want your own personal channel to look and you can curate it with like the products and services and things that you like. Sort of like a pin board and then people can like subscribe to those channels and see like new content and stuff. So it's going to give the users a chance to like really filter and like surface good stuff to the front. And then it'll make sense why you're like following accounts because in open Bazaar you can like follow any store or like any user. And there's not like really a lot that that does other than say that you follow them. But the idea is in the future that there will be like a feed. So, you know, if you're following some store and they have a discount code that they put out or they have a new product that comes out, you'll be able to get notifications about that. You know, it's basically just making it like much more robust and like more interactive. We want people to like think of open Bazaar as not just like a place to like run in and grab an item and get out. Like we want them to, we have chat in there for a reason. We have following lists for a reason. So all of that's going to get expanded over the next year. And then also, you know, just making it better, a better e-commerce platform, like starting to try and get closer to parity with the Shopify's and stuff so that it's actually a viable alternative. People really want to use it rather than think of it as like a very limiting platform. Sorry, I'll meet a quick question. For the reviews such as Amazon, are you guys going to be giving more say, focus on having people have more weight on reviews and open Bazaar? Yeah, like the review system is not like a super perfect solution right now. It's pretty basic. It's like enough to get by to be really honest. But yeah, we want to improve that. You know, like building a system, a reputation system that is not able to be gamed, that people really can trust is not an easy thing. It takes a lot of effort to do it right. We have, we funded some research in that area with a group called Trust Is Risk, which they're based out of Greece and they're working on like a whole system for how trust could be done, decentralized fashion. It's really, really fascinating. We're probably going to look at like how that might be integrated. And you know, right now you can only review merchants, like their products. You can't like buyers can't be rated, moderators can't be rated. So we want to like try and figure out how that could be done. So I think that'll be another interesting area that we work on. We don't really have any like clear plans yet on what that solution will be, but yeah, it's definitely an area that we know needs work. Great, and final question. What's your thoughts currently on the whole crypto space? Where do you see us in the next like a year or two? So I think, you know, I think what we're seeing right now is this, you know, over the last six to 12 months we've seen like this huge interest in creating alternative coins or tokens for different uses. And it's mostly only kind of like manifested in like huge amounts of capital being raised. Like we haven't really seen the result of that capital inflow. Like we haven't seen great products come out yet or anybody like proved traction because of that or any of these tokens like really get like massive usage beyond speculation. So I'm hoping that the next year we'll start to see some of the fruits of that. I don't know how much will happen. We might have a crash and like a lot of them go away or something, but you know, ideally I think with like two and a half billion dollars worth of investment into these projects, I think we should be able to see something interesting come out of them. You know, one thing I didn't mention is that we do want to, we're going to try and support other currencies on the platform over the next year. And you know, this, what shakes out of all this will be the ones that we focus on, you know. And in terms of like the kind of the legacy coins like Litecoin and Bitcoin and none of the token ones, you know, I think it seems like those guys are starting to kind of hunker down and position themselves as more of like this stable store value rather than like a transactional currency. And so, you know, for us, it probably will make more sense to start shifting towards, you know, encouraging people to use some of the other coins that are better for day-to-day usage. You know, we don't want to ask people like if the fees on Bitcoin go up to $20 of transaction doesn't make much sense to ask people to sell T-shirts for Bitcoin. And so we have to kind of be able to evolve with that. And we've spent a lot of time trying to like encourage Bitcoin community to like rethink that. And like, you know, we've been supporters of Segwit 2x because we want them to like, we want to push them to consider like our position, which is that we're trying to create a useful service on top of Bitcoin that people use daily, not just to store value, like, and we're trying to suss out whether or not that is possible. It seems like we're getting a lot of pushback for that. So, you know, I mean, maybe that's just not what it is. I mean, obviously Bitcoin is bigger than just us. So we have to kind of be able to adapt. So, you know, that's like a very rambling statement on where I think the space is, but it's complex, it's confusing. There's a lot going on and it's always moving really, really fast, so. Well, Brian, I appreciate you answering that question. I appreciate you coming on the show. If people want to get more information about you and OpenBizarre, what is the best resource? You can go to openbizarre.com and download OpenBizarre. I recommend you do it immediately. Yeah, do it, guys. There's a link below this video for OpenBizarre. And for me, you can find me on Twitter at BrianC Hoffman. That's the best place to find out what's going on with me. Awesome. Well, Brian, thank you so much for coming on the show and have an awesome day. Thanks.