OpenBazaar and the Bitcoin Closed Loop Economy

With the advent of digital currencies our financial lives have become vastly more complicated than ever before. Not only are we faced with the traditional financial decisions such as how much to spend, save and invest and the most efficient ways of doing each, now there is a new option of what form of money we want to use in our every day life and new ways to spend it online such as decentralized marketplaces like OpenBazaar.

We have all been faced with the uncertainty of needing to make a purchase such as groceries or clothes and questioning what currency to use. Especially after a large price increase or decrease in bitcoin, or possibly your native currency, this decision becomes even more confusing. I’m always second guessing myself if I should buy that pair of shoes with my coveted btc because I “know” that it will be it will be more valuable next year, or month, day or even an hour from now. The next instant I’m reminded of the latest news story predicting the demise of this libertarian ponzi scheme and a cold sweat breaks out as I fight the urge to cash out all of my bitcoin into gift cards, expensive items on Overstock.com or anywhere else I can dump my stash of digital “money”. Or maybe that other cyrptocurrency (fill in the blank) that I heard about relentlessly on Twitter recently, really is the future and it will overtake all the others by next Tuesday. Life used to be so much more simple and would probably sleep better some nights if I only had one form of money and only had to decide how much to spend, save and invest in US dollars but at the same time I can’t resist the excitement of this new frontier and feel appreciative that there are so many new options available today.

After deciding that I do want to send some bits, my first destination is always OpenBazaar because I think it is the much needed and essential platform that has the best opportunity to grow a closed loop economy based on bitcoin. This is an important aspect of growth for the community to have a place without restrictions or regulations where bitcoin can function according to its users in an open environment and with greater chance of bitcoin staying in the crypto ecosystem longer instead of being exchanged for government based fiat currencies immediately. As we all know, currently most retailers and sellers of gift cards that “accept bitcoin” immediately covert it to government backed money to eliminate volatility, regulations, and tax headaches from dealing with crytocurrencies while still being able to reach new customers and get publicity. Now imagine a world where all that money is kept in bitcoin either by HODLing or making other purchases through places like OpenBazaar. For instance, if I buy I used book from Alice and then she then turns around and buys a couple of jars of honey from Bob and so on, this will create a closed loop economy where the bitcoin is never again exchanged back into fiat. While there is still a long road ahead, I am optimistic that we will eventually get there. The long term effect of this is that new investors and buyers of bitcoin would have to rely more and more on the miners and speculators for a new supply of an increasingly scarce commodity as payment processors like Bitpay and Coinbase would have less bitcoin to dump onto the crypto markets as they exchange bitcoin for fiat for their customers as more transfers are happening peer to peer and not being moved back into the traditional banking systems.

Besides creating a closed loop economy, OpenBazaar could prove to be one of bitcoin’s saviors if all cryptocurrencies are deemed illegal or become so burdensome to deal with regulations that traditional retailers won’t touch it. This last month it became evident how fragile this technology’s current environment is when the People’s Bank of China did a routine inspection and sent a wave of uncertainty and fear across the world. A decentralized money needs a decentralized marketplace to ensure its usefulness and censorship resistance to create a truly free market where bitcoin’s value will not evaporate on the whims of regulators.

It feels like everything is falling into place this year with wider bitcoin adoption, continued price appreciation, possible scaling solutions and the launch of OpenBazaar 2.0 coming in the next few months so now is a great time to get involved and help the peer to peer network grow. If you are an artist, designer, farmer, writer, builder, tinkerer, or just have some junk laying around that you could sell, give OpenBazaar a shot for no other reason that this has never been done before and no matter what it will be an interesting ride, but more importantly it will increase the value of bitcoin and make it a more secure ecosystem in the long run.

If you are content HODLing, then keep on HODLing on, but if you got some bitcoin burning a hole in your digital wallet take a look at OpenBazaar and join a crazy experiment where the possibilities are endless and up to all of us to create and grow in a secure and sustainable environment to ensure the value and usefulness of bitcoin. By reducing the reliance on fiat currencies and creating a closed loop, a decentralized crypto economy will only further grow the value of bitcoin and make it more resilient to outside forces and this is what makes OpenBazaar an essential part of the future for all of us. Free the Market, Free the World!