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How to Fight against the Assault on Crytocurrency Privacy with OpenBazaar

7-23-19



In 2008, when Satoshi Nakamoto published his paper Bitcoin: A Peer-to-Peer Electronic Cash System (pdf), he wanted to provide a system for privately transferring money directly between individuals via the internet, without involving a centralized third party, such as a bank. Those of us who understand the need for privacy, know there are many good reasons for demanding privacy. Today, the banks of developed countries have managed to successfully insert themselves into and eliminate privacy from nearly all cryptocurrency transactions. Banks have been able to get away with this thanks to the "know your customer" laws that conveniently require them to assume their customers are money launderers until their customers produce sufficient identification to prove otherwise.

If you've never considered the details of what happens when you exchange cryptocurrency for legal tender, you may not understand that it no longer works at all like Satoshi once envisioned. No matter how you buy or sell a cryptocurrency, you will almost certainly be required to give up a piece of personal information, whether it be a bank account number, a phone number, or something else that can be used to identify you. Yes, you can buy a burner phone to get around this with some organizations like paxful.com, if you mail cash to an individual to purchase cryptocurrency and never use the burner phone from an address that is tied to your identity. If you have the option of meeting the seller face-to-face (which is rather unlikely to be convenient), you can use localbitcoin.com or Bisq. If you are willing to take the time, make the effort, and assume the risk of doing these things, you can still buy cryptocurrencies anonymously. But few people are willing to go through this much trouble, so almost all cryptocurrency transactions now involve handing over your personal information to a centralized authority that can then track every transaction you make with that cryptocurrency. In fact, any cryptocurrency that goes to the same wallet address can be linked to you and used to track your purchases.

Lest you think that so-called "privacy" cryptocurrencies like Monero and Zcash are solutions to the problem of lack of privacy associated with cryptocurrencies, read this. And, just because no one has yet cracked the privacy of a particular "privacy coin", doesn't mean they never will. When that occurs, your past transactions will be exposed for all the world to see, even if they are years, or even decades old. Saying that a cryptocurrency can be created that perfectly protects your privacy is like saying an uncrackable encryption algorithm or a totally secure computer can be created. Such an animal does not exist!



OpenBazaar

Fortunately, a method of anonymously and more conveniently obtaining cryptocurrencies has come along recently. OpenBazaar is a decentralized app that runs on your Windows, Mac, or Linux computer and allows you to exchange cryptocurrencies and to use them to buy and sell products through its distributed network. OpenBazaar2 uses the IPFS network. Because OpenBazaar is distributed, no bank is involved. In fact, no organization can control what happens in the OpenBazaar store. Buyer and seller buy and sell directly without the aid of a third party. This also means that no third party gets a cut of the seller's sales revenue. And, OpenBazaar is easy to set up and use. It even comes with its own four-cryptocurrency wallet. OpenBazaar also encrypts data that is passed between computers on the network. OpenBazaar2 will automatically detect the TOR browser and ask if you want it to connect through the TOR network, as long as you start the TOR browser before starting OpenBazaar2.

If you're afraid that OpenBazaar is too good to be true, or you're worried that it's another Silk Road, I may be able to allay your fears. I have visited OpenBazaar several times. While I have not been looking for anything illegal, I have also not stumbled across anything illegal, either. OpenBazaar also has a setting to hide adult material which is set by default to filter out all adult material from the pages that you see. Most products for sale in OpenBazaar fall into these categories: cryptocurrencies, art, music, toys, crypto-related products, books, health-related items, games, hand-made products, clothing, and electronics. In other words, you see many of the same things you see on Ebay or Amazon. OpenBazaar also offers a moderation service that provides escrow accounts for sellers who are willing to pay a small fee. So, if you are a buyer who is risk-averse, you can stick to buying from sellers that use moderators. You can find out more about how the moderation service works here.



Installing and Running OpenBazaar

You can download the OpenBazaar binaries (.exe files, for you Windows users) here. For Mac and Windows users, install the downloaded OpenBazaar executable just by clicking on it. Linux users have a choice of 32 and 64-bit deb and rpm packages. I downloaded and installed the deb package onto Linux Mint 17 without any problems. Using the TOR network with OpenBazaar2 will prevent your IP address from being revealed. To use OpenBazaar2 with the TOR network, follow the instructions found here.



Buying on OpenBazaar

After OpenBazaar installation, you can run OpenBazaar by clicking on its icon in your computer's menu or on its desktop. Then click on the "Get Started" button and follow the directions. If a window ever comes up that says, "Unable to load verified moderators", just click it away. To view items that are for sale, just click on the blue "discover" icon that looks like a tent in the upper right-hand corner of the page and scroll down. Click on the item you're interested in and read the description. Make sure the seller ships to your country and that you are willing to pay the additional shipping charges. Some sellers also have additional conditions. To buy the item, just click on the "Buy" button and fill out the order form. Then click on the "Pay" button to pay using your OpenBazaar cryptocurrency wallet. Obviously, you have to have transfered some cryptocurrency into your OpenBazaar wallet before you can make a purchase.



Selling on OpenBazaar

Selling on OpenBazaar is not much harder than buying. Simply run the OpenBazaar application, click on the blue "discover" icon, and click on the "My Page" button on the upper right-hand side of the page. This brings you to your personal store. To list an item for sale in your store, click on the "create listing" button. Then fill out the form that comes up. There are blanks for a title, a description, shipping information, and any additional terms of sale that you may want to attach. You can also upload pictures of your item. You can choose to accept any or all of the following cryptocurrencies: Bitcoin, Bitcoin Cash, Litecoin, and Zcash. If you don't like any of the above cryptocurrencies, you can exchange them for other cryptocurrencies in OpenBazaar for a fee. When you have filled out the form to your satisfaction, click on the "Save" button. In 10 to 20 minutes you should see your item listed in the OpenBazaar store where other people can see it. Nothing could be easier. To see if someone has ordered an item you are selling, click on the bell-shaped "notifications" icon on the upper right-hand side of any page in OpenBazaar.

Since OpenBazaar is a decentralized application, your description of the item you are selling is stored on other computers on the OpenBazaar network. This means that in order for a potential buyer to see your item, at least one computer connected the network must have a copy of your item listing. This is not guaranteed 24 hours a day, 7 days a week unless you run OpenBazaar continuously on your computer. If you are in no hurry to sell your item, you may want to try running OpenBazaar for half an hour a day and see what results you get. If you would like to sell as much as possible, you may consider setting up a computer dedicated to OpenBazaar sales and running it continuously.

As with any software, OpenBazaar software has some bugs. I had some difficulty getting my item listing to show up in the OpenBazaar store where other people could see it. If you have problems, you can contact the OpenBazaar Zendesk by clicking on the "Feedback" tab in the lower right-hand corner of any OpenBazaar page and supplying your email address. You do have an email address that is not traceable to your real identity, don't you?



Conclusion

If you are someone who likes the idea of anonymously obtaining cryptocurrency, OpenBazaar is currently one of the few remaining options for doing so. Buying and selling on OpenBazaar involves no third party, so you don't have to ask anyone's permission, and no one gets a cut of the sales. I wish there were more distributed applications like this that allow people to trade crytocurrencies and buy from and sell to each other directly. Hopefully, we'll see more soon, and then it will be easier to exchange cryptocurrencies directly with individuals. Until then, I hope you will be smart and try to avoid using centralized methods of obtaining and using cryptocurrencies that are designed to take away your privacy.



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