drwasho

Ricardian Contracts in OpenBazaar

What is a Ricardian Contract

A Ricardian Contract can be defined as a single document that is a) a contract offered by an issuer to holders, b) for a valuable right held by holders, and managed by the issuer, c) easily readable by people (like a contract on paper), d) readable by programs (parsable like a database), e) digitally signed, f) carries the keys and server information, and g) allied with a unique and secure identifier.
- Ian Grigg

The Ricardian contract is a means of tracking the liability of one party to another when selling goods to each other in OpenBazaar. Fundamentally, a contract represents a single unit of a good or service. Ricardian contracts should be used in OpenBazaar as they are means of effectively tracking legitimately signed agreements between two parties, which cannot be forged afte

drwasho

Peer-to-Peer Lending on OpenBazaar

Preamble

Banks are centralised institutions that, among other things, offer credit to individuals, groups and corporations. Historically, banks were a nexus of borrowers and lenders, matching the supply of liquidity to the demand for credit. The primary role of a bank was risk management in the form of the due diligence required to assess if a potential borrower was a worthwhile investment. With the advent of nation-state money printing and fractional-reserve banking, whereby money is lent into existence and losses are publicly subsidized by inflation and bailouts, the traditional care of risk management for loans has all but been obiliterated.

Peer-to-peer (P2P) lending has emerged as a means to decentralise the oligopolistic hold that banks possess in every category for lending. While P2P lending is still in early days, regulatory pressure is mounting making P2P lending

drwasho

Auctions on OpenBazaar

Dependencies

1. Ricardian Contracts on OpenBazaar
2. P2P Lending on OpenBazaar

Introduction

drwasho

Service Contracts in OpenBazaar

Introduction

A service contract in OpenBazaar replaces a physical good to be sold with the terms and conditions of a service to be performed by one party. The distinction between a good and service within a Ricardian contract is minimal, as will be described in this article. Morever, the combination of pseudonym (nym) reputation management (proof of burn nyms, web of trust) and surety bonds can ensure a robust service industry within OpenBazaar.

Service Contracts

drwasho

The Issuance and P2P Transfer of Shares in OpenBazaar

by drwasho and Delain Markos

Introduction

Decentralised money necessarily requires decentralised markets.

drwasho

Voting Pools in OpenBazaar

Introduction

The advent of multisignature transactions within Bitcoin is a monumental achievement for the development of trustless (and near-trustless) systems. Building on top of the multisignature revolution is the possibility to create voting pools. A voting pool further distributes the role of an arbiter in a multi-party transaction and reduces the risk of fraudulent behavior within a pseudonymous marketplace like OpenBazaar.

Voting Pools

drwasho

OpenBazaar Genesis Contract

The following article contains OpenBazaar's first ever Ricardian contract for the sale of a good between Sam Patterson and Brian Hoffman, arbitrated by Dr Washington Sanchez. In short, the signing process follows these steps:

1. Creation of the seed contract by the seller

• The seller creates a contract to sell a good

2. Creation of a bid offer for the contract by the buyer

• The buyer appends their details to the seed contract and digitally signs it

drwasho

Distributed Currency Exchange on OpenBazaar

Introduction

OpenBazaar allows for the decentralised exchange of types of currencies using the flexible Ricardian contract system. Currency exchanges are not limited trades between crypto-currencies, but can also facilitate exchanges with fiat currencies using reverisble and non-reversible payment systems.

Currency Exchanges

Fundamentally, currency exchanges require a matching of buy and sell orders at a certain price for a given volume. Firstly, buy and sell orders will be created and issued as a Ricardian contract, formatted according to a specialised 'currency' template in OpenBazaar. Secondly, matching buy and sell orders theoretically will be mediated over exchange nodes, which may also function as arbiters for each exchange. Alternative, buy and sell orders may be matched over the OpenBazaar distributed hash table. Finally, private exchanges can be made bet

drwasho

Separation of Notary and Arbitration Services on OpenBazaar

Introduction

Thus far the proposals for various market implementations within OpenBazaar have assumed that the third party in a transaction (signer #3 in a 2-of-3 multisignature escrow address) performs two roles: a notary, and an arbiter. The notary aspect of their service includes digitally signing contracts and transactions, the latter in the event of a dispute between the buyer seller. The arbitration aspect of their role is to decide who the winning side is in a dispute between the buyer and seller. However, this overlapping notary-arbiter model is prone to several weakenesses:

• There is a conflict of interest between the arbiter and disputing parties
• There is a practical burden on a single agent to perform all of these tasks simultaneously for potentially dozens/hundreds of transactions

drwasho

Risk and Insurance in OpenBazaar

1.0 Introduction

Insurance is a valuable service that is often misinterpreted, over-regulated, and out of reach for many people. On OpenBazaar, insurance is contextualized as a service that can be offered by anyone or group, leveraging:

1. The clarity of terms and conditions set out in a Ricardian contract
2. An open marketplace for competing insurance policies and service providers