Connect with us

Interviews

P2P E-Commerce Network: OpenBazaar CEO Gives Talk To Packed House In San Diego

Published

on

SanDiegoMeetUpIn North Park, a hip and central bedroom community of San Diego, local businesses Airbitz and CoinStructive hosted an evening of craft beer and Bitcoin discussion at Union Cowork last week. Founder of OpenBazaar, Brian Hoffman, who comes from San Diego but lives in Washington D.C., held an hour-long speech about the state of his company.

// -- Discuss and ask questions in our community on Workplace.

Founded by CEO Hoffman – who previously worked as a cyber-security and IT consultant at Booz Allen Hamilton where Edward Snowden contracted – open-source project OpenBazaar (OB) strives to create a decentralized network for peer-to-peer e-commerce devoid of fees and censorship. As OpenBazaar states, “…it’s the baby of eBay and BitTorrent.”

The OpenBazaar client (a downloadable application) allows you to create a product listing like Etsy and eBay – such as model trains or old laptops – on your computer. Once the listing is published, anyone searching on OB’s distributed p2p network for model trains or laptops can find it. They can either pay the price you’re asking or make a counter-offer. Once the terms are agreed upon, the OpenBazaar client creates a contract with the users’ digital signatures. Hoffman hopes to carry on the original spirit of the Internet.

When the Internet was created it wasn’t created as a photo sharing platform. It was created to network computers around the world for time sharing purposes so that researchers and scientists could pull their resources together and create this massive global network, and it seems to have succeeded. It makes life much more efficient and shows the power of networks.

OpenBazaar, which strives to be an alternative to centralized services like eBay, Amazon, and Etsy, has the goal of putting power back into the hands of its users by connecting them directly, without third parties. To a degree, for Hoffman, it’s a personal issue.

// -- Become a yearly Platinum Member and save 69 USD. Click here to change your current membership -- //

“I really hate eBay and love to piss on them whenever I can, based on personal experience. eBay wasn’t originally created to be this asshole-ish. Pierre Omidyar,the founder of eBay, wanted to create this network, this site, that would create a perfect market where bidding would create this balance between all the different people participating on the network,” Hoffman told the audience in San Diego. “Everything would be priced exactly where it should be priced because people would be bidding against each other and only pay what they should have paid.”

“Unfortunately, as time goes on, you see they get investment, they go public, all these things happen, it distorts that original vision,” Hoffman added.

Where OpenBazaar differs from Etsy and eBay most notably is in arbitration.

Whereas eBay and Etsy handle all arbitration within customer service departments, OpenBazaar approaches the problem differently.

OpenBazaarSanDiego

“We have this concept of moderators, which are this third party part of the transaction process. They aren’t selling goods and services, they aren’t buying goods and services, they’re providing value to the users of the network,” Hoffman said. “For that they can receive tips and they can receive fees based on how much value they provide the users.”

“On eBay you’re paying 10% and that covers those services, and its mandatory,” he continued. “In this case, if you want those services, you can bring the moderators in. We think that’s a pretty different approach to doing this.” This idea landed OpenBazaar $1 million in funding.

“We got in front of Union Square Ventures and Andreessen Horowitz and they asked, ‘How the hell are you guys gonna make money, why should we give you money?’ And we said, ‘We have no clue,’ and they said, ‘Well, this sounds really fucking crazy, and we like that and we’ll put the money in,’” Hoffman recalls.

I can’t explain why somewhere along the line they felt like it was a great idea. Chris Dixon, our partner at Andreessen, worked at eBay for awhile, and sold his company to eBay, and so is very familiar with the challenges of those kinds of market places.

But in what exactly did Andreessen Horowitz invest since OpenBazaar is an open-source protocol? They invested in the first business on top of OpenBazaar. As Hoffman explains:

“A lot of the news articles said OB gets funding,” Hoffman said. “Not really true – OB is just an open project. They invested their money in OB1, which is supposed to be the first business on top of Open Bazaar.” With the interest in the project and the funding, OpenBazaar expanded upon its original vision, which has caused a delay in the release of the application.

“I skyped in June 30 last year, I think, and told everyone it’d be ready in something like August of last year, so we didn’t meet our [goal],” Hoffman admitted. “But I think the project gained a lot of visibility, and the scope kind of broadened, which has been one of the challenges we’ve had.”  As for the team built up around OpenBazaar:

“It is a six person company, three founders and three employees. We have [people in] Greece, Australia, Chicago, New Hampshire and two in Virginia,” Hoffman said. “We are basically working full-time to finish OB and drive the community forward, and hopefully once that is done we will be able to build a value-added business on top of the platform just like anyone else.” Things have picked up recently for the OB team.

“The last few months have been quite a ride,” Hoffman said in the most serious tone of the night. “We’ve been trying to get our funding, and put together a full-time team, which kind of slowed us down a bit.”

“Right now our road map shows that we are aiming for a full release sometime around Thanksgiving this year, which means that everybody should be able to download our core app and start doing all the stuff they want to do on OpenBazaar,” he said. Many have questioned the project’s relationship to Tor. Hoffman addressed these concerns.

There have been some misconceptions about our support of Tor. Our investors would like us to say we don’t support Tor and don’t plan to support Tor because it makes it easier for them. [However], our stance is that Tor is very important.

Hoffman also revealed that, in order to make its platform more available to the users of Etsy and eBay, OB is considering incorporating USD transactions. After the speech, a brief Q&A session took place, and more local craft beers – like Ballast Point – were consumed before some of the attendees headed around the corner to City Tacos – a Bitcoin accepting Mexican food place – for dinner.

Images from Hacked, featured image from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

5 stars on average, based on 1 rated postsJustin O'Connell is the founder of financial technology focused CryptographicAsset.com. Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.




Feedback or Requests?

4 Comments

4 Comments

  1. Tony

    July 21, 2015 at 2:49 pm

    OpenBazaar is such an exciting project. Looking forward to it!

  2. Burnt Eloi

    July 22, 2015 at 11:14 am

    Why only BTC though? The system should be modular enough to accept any crypto. And now they are thinking USD? How are they going to implement that?

  3. Philosopher Rex

    July 29, 2015 at 7:46 am

    I hope they look into porting OB for the SafeNet (aka MAIDSAFE).

You must be logged in to post a comment Login

Leave a Reply

Financial Freedom

Interview: Tax Strategies for Crypto Traders

Published

on

Crypto taxes

With cryptocurrencies going mainstream, more and more people are asking how trading and holding of it should be reported to the tax authorities in their respective countries. And not only are people wondering, even the tax authorities themselves sometimes seem to have a hard time figuring out how they should deal with it.

// -- Discuss and ask questions in our community on Workplace.

Although guidelines in many countries remain unclear, we do know that the authorities have stepped up their efforts in uncovering unreported crypto fortunes with new measures. One recent example is from California where a judge last year ordered Coinbase to turn over personal details on all accounts worth over $20,000 between the years 2013 and 2015, to the US Internal Revenue Service.

According to current regulations in the US, the IRS considers cryptocurrency as “property” for tax purposes, meaning each and every transaction is in fact reportable and taxable. This includes trading from fiat to crypto as well as from one crypto to another crypto.

For active traders and day traders, manually reporting this on forms to the IRS obviously involves a lot of work, something many people have complained loudly about in online discussion forums:

// -- Become a yearly Platinum Member and save 69 USD. Click here to change your current membership -- //

crypto taxes

The early days – “see no evil, hear no evil”

In the early days of bitcoin and crypto trading, the number of people involved, and the amount of money it represented, was so small that the tax authorities didn’t bother looking much after it. Although everyone was, of course, technically required to report their holdings and profits, very few did.

The tax authorities didn’t know anything about bitcoin, and the risk of getting caught was small.

This first started to change after the dark web marketplace Silk Road was shut down, most recently in 2014. That’s when the IRS in particular first started to become aware of bitcoin, and became interested in figuring out ways to trace bitcoin payments that were used for illegal activities and tax evasion.

Then came the extreme bull market of 2017, a lot more people got involved with crypto, and a lot of money was made in the market. And as always when someone is making a lot of money, the government wants its share of it.

The tax situation today

Today, taxes are again a hot topic of discussion among cryptocurrency investors, with many feeling anxious about previously unreported gains made in the crypto market.

Andrew Henderson, founder of Nomad Capitalist, told Hacked.com that there is indeed a lot of confusion among crypto traders these days, in particular with regards to the new Trump tax reform in the US.

“The number one issue people come to me with is obviously taxation. The new Trump tax reform in the US really screwed a lot of people, and now even intra-crypto trades are taxable,” Andrew explained.

“The second problem I typically hear about from people in the crypto community is that they cannot participate in ICOs because they are living in the US.”

“Many of these people say they are missing out on a lot of good investment opportunities because of that, and they want to find out what they can do to no longer be considered US Persons,” he added.

Andrew, who has been advising people on offshore tax strategies since 2013, explains that the solution for most of these people is to go out and set up a base of operations somewhere outside of their home country.

Unfortunately, he said, the old strategy of leaving one’s home country only to “become a resident of nowhere” is increasingly not working. In other words, people who want to invest in certain ICOs or lower their crypto tax bill therefore need to find a new country that is accepting of crypto and have low or zero capital gains tax.

Is not reporting an option?

When asked if crypto traders should even bother reporting all of their transactions and profits to the tax authorities, Andrew is pretty clear that at least people from Western countries, and the US in particular, should respect the taxman.

He explains that the IRS in the US is “really aggressive,” and that there is a real risk they will bust anyone who tries to evade taxes. In addition, Andrew said, “you’re probably going to want to spend the money some day. If your crypto holdings by this time has grown into a lot of dollars, you’ll have a problem explaining where all that money came from if the tax man asks.”

Going offshore

Given the fact that US citizens are liable to pay taxes on their worldwide income, Andrew’s advise to big crypto traders is clear:

“I think if you’re a US citizen, you might just want to consider not being one anymore.”

Although this measure may sound extreme to a lot of people, the suggestion appears to be backed up by statistics. Each quarter, the IRS publishes a list of Americans who have renounced their citizenship in the quarter. According to the statistic, there has been a steady increase in the number of people who have renounced over the past decade, with 2017 being the first year to show a slight decline from the previous year since 2013.

The United States is one of very few countries in the world that taxes its non-resident citizens on their global income.

Unfortunately for many of the readers, non-US citizens will therefore have an easier time implementing some of the strategies for lowering their crypto tax bill.

Residents of other high-tax countries such as the EU countries or Australia can in most cases simply declare themselves a tax non-resident in their home country by moving overseas and making sure they spend no more than a specified number of days each year in their home country.

While some countries require their citizens to continue to file and pay taxes for a number of years after they moved out, other countries will consider those who have moved a non-resident for tax purposes right away.

Because of all this, it’s important to distinguish between US citizens and citizens of other high-tax countries when it comes to regulations and taxes related to crypto.

If you’re a US citizen, what it all comes down to is basically how big of a problem it is for you not to be able to participate in a lot of the ICOs that are coming out. If this means a significant monetary loss to you, it may well be worth it exploring options for relocating yourself. For citizens of other countries, moving abroad for a period of time can be an effective way to slash your crypto tax bill without having to completely cut ties with your home country and give up your passport.

Featured image from VCG.com.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
3 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 5 (3 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.3 stars on average, based on 32 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




Feedback or Requests?

Continue Reading

Interviews

Blockchain Asset Manager Ambisafe Talks About Institutional Guarantees, Parity Debacle

Published

on

Ethereum platform Ambisafe has quickly emerged as one of the blockchain’s most promising asset managers. Hacked recently spoke with representatives from the company on their product, institutional bottlenecks and other contemporary issues facing the cryptocurrency market.

// -- Discuss and ask questions in our community on Workplace.

Ambisafe Asset Platform

In the world of blockchain, Ambisafe is well established. The company has been involved in the cryptocurrency space as far back as 2010, and is today one of the blockchain’s leading asset issuance and management firms. The company provides many go-to-market offerings, including ICO services, asset issuance and custom Ethereum development solutions.

Ambisafe operates several other companies, including Orderbook, an Ethereum token exchange. Orderbook has 25,000 active users and is averaging about two ICO launches per week, according to a company spokesperson. Combined, ICOs launched via Orderbook have generated more than $35 million in funding.

Orderbook claims to provide full transparency and immutability by recording all transactions on the blockchain. In this sense, it is entirely trustless and stores all assets “on-chain.”

// -- Become a yearly Platinum Member and save 69 USD. Click here to change your current membership -- //

The companies (both Orderbook and Ambisafe) areled by Andrey Zamovskyi, who has been coding since the age of nine. He has his fingerprints all over first of their kind blockchain projects, such as wallets, merchant services, exchanges and trading platforms.

A Lack of Institutional Guarantee

Ambisafe told Hacked that one of the biggest challenges facing the crypto-sphere isn’t payment processing, but a lack of institutional guarantees. This could make it difficult to attract new investors as the market eventually stabilizes and cools from its recent streak of record-setting gains.

In explaining this issue, Ambisafe drew our attention to account guarantees in the United States. In the U.S., all savings accounts held at banks are backed by a guarantee of $250,000 from the federal government. This is essentially a guarantee that your funds will be protected for that amount if the bank fails.

Moreover, if your credit card is stolen, U.S. law limits personal liability drastically so that you are not left on the hook for a massive bill payment.

These same guarantees are not present in the cryptocurrency space. Quite the contrary, as a matter of fact.

For example, if my Trezor is stolen or Coinbase is hacked, I simply lose everything. Large-scale trusted and insured institutions need to back vaults with extensively audited multi-sig wallets before we’ll see widespread displacement of credit/checking accounts.

Parity Wallet

Ambisafe also chimed in on the recent controversy surrounding Parity Technologies, whose account holders were locked out of $190 million worth of ether tokens. When asked about how the accounts could be unlocked, Ambisafe referred to the fact that there are some Ethereum Improvement Protocols (EIPs) on how to recover the funds. However, the discussions appear to be ongoing with no immediate solution in sight.

“In our solutions, we make sure to have a test coverage,” Ambisafe said. “Also, we don’t publish our code out in the wild just for the hell of it. We share the code by request though.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 417 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Interviews

Does ‘CryptoRuble’ Threaten the Point of Cryptocurrencies? Jean-Yves Sireau Weighs In

Published

on

Last month, Russia said it would move to regulate cryptocurrency by bringing mining and exchange under the purview of the central government. Investors rejoiced in the decision, as it signaled that another major economy would not ban cryptocurrency. However, as one prominent blockchain expert notes, the advent of a government-controlled cryptocurrency – i.e., CryptoRuble – would threaten the point of cryptocurrencies all together.

// -- Discuss and ask questions in our community on Workplace.

Binary.com Founder and CEO Jean-Yves Sireau (JYS) was recently in contact with Hacked.com, where he answered some of our most pressing questions. Below are excerpts from our most recent email exchange.

JYS Weighs In

According to the Binary.com founder, Russia’s plan to centralize the mining process is probably feasible, but will likely hamper the CryptoRuble’s popularity. That’s because this arrangement practically ignores one of the key selling points of cryptocurrency – that is, the potential for a universal token.

“​Indeed, the attraction of cryptocurrencies is that they are like cash: easily transferrable, essentially anonymous and open to everyone,” JYS says. “​A currency that doesn’t have these features is going to be at a competitive disadvantage. There are already hundreds of competing cryptocurrencies, hence creating one that has limitations is not likely to be a success story.”

// -- Become a yearly Platinum Member and save 69 USD. Click here to change your current membership -- //

As many of our readers know, Russia isn’t the only country looking to create a state-run cryptocurrency. Kazakhstan and Estonia are in the process of creating a state-run digital currency, with several others considering the idea. There has even been talk of China – a country that recently banned cryptocurrency trading – implementing its own state-run digital currency.

In Sireau’s view, there’s no guarantee that these currencies will be popular. As he rightly notes, “there are hundreds of cryptocurrencies with a very limited following.”

ICO Regulation

Russia has given mixed signals about how it plans to regulate ICOs. According to Sireau, this reflects broader confusion about how to secure a market that so few know about. Apparently, JYS doesn’t think too highly of ICOs, either.

“In my opinion most ICOs are worthless or scams, and investors will lose 98% of their money. Even if regulators do come up with regulations, it will be too little too late. In 1-2 years’ time there is going to be a flurry of lawsuits surrounding ICOs, especially in the US where law firms can organize class-action lawsuits. I think these lawsuits are what are going to tame the market, not regulatory action.”

On whether any jurisdiction approaching cryptocurrency regulation the right way, Sireau said flat-out no. That’s because “the core issue is that regulators are typically lawyers or compliance people who don’t understand the details of the technology. It’s like trying to create grammatical rules for Greek without having any knowledge of the language.”

The future of cryptocurrency looks promising, but will be marked by volatility and many failed projects. In Sireau’s view, this is especially the case with ICOs, which could “implode in a flurry of lawsuits, especially in the form of class-action lawsuits, in the U.S.”

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 417 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending