OpenBazaar tokens, or OBT, are blockchain-based tokens that can be used on the OpenBazaar marketplace. Today, we’re explaining everything you need to know about OBT tokens and how they work.
What Are OpenBazaar Tokens?
OpenBazaar tokens, or OBT, are used by curators to monetize channels. “Channels” on OpenBazaar are curated lists of content. Curators will accept tokens in exchange for premium advertising spaces.
OBT can also be used to create decentralized channels that use market auction forces to arrange content. OpenBazaar claims this is the first platform of its kind.
OpenBazaar announced their new OBT tokens on December 5, 2017 with a blog post. Here’s how they explained the tokens:
“The token adds value to the OpenBazaar protocol without acting as a gatekeeper to the protocol, or threatening its stability. Ethereum contracts using the token are also independent of the token itself, enabling the system to be flexible to additional features and bug fixes.”
Users can create smart contracts with OBT, adding a new layer of utility and value to the network.
To date, OpenBazaar has argued that the platform doesn’t need a token. The world’s largest decentralized marketplace relies on other cryptocurrencies to operate. As of now, that plan appears to have changed.
What Problems Does OpenBazaar Seek To Solve?
OpenBazaar believes that its tokens will solve several crucial problems with today’s decentralized networks. Decentralized networks have a number of major advantages, but they also have several shortcomings. One of the biggest issues with a decentralized network is the discovery problem. Data in the network is distributed so well that it’s difficult for users to crawl and parse this data. The data could also be redundantly shared in its entirety between peers, which leads to rising storage and maintenance costs.
We see this problem on OpenBazaar. The marketplace has a wide range of listings, images, and social content published by nodes on the network. The average user struggles to interact with this content in an efficient way.
With that in mind, OpenBazaar plans to organize content more efficiently using user-driven curation. OpenBazaar tokens are used to incentivized this curation process.
How Do OpenBazaar Tokens Work?
OpenBazaar tokens (OBT) are Ethereum-based tokens with a fixed total supply. The tokens can be transferred between accounts or used as inputs for the execution of OBT smart contracts. OBT smart contracts require OBT to change the state of the contract to embed data into the Ethereum blockchain. Data is embedded in the form of OpenBazaar-IPFS content addresses, which essentially work as pointers to data hosted by peers on the OpenBazaar network.
All OpenBazaar nodes monitor OBT smart contracts for state changes corresponding to new content addresses.
This ultimately leads to two key benefits and features, including channels and better flexibility for OpenBazaar.
How Do OpenBazaar Channels Work?
OpenBazaar tokens lead to the creation of channels. A channel is a data structure (JSON) that arranges OpenBazaar content (like listings, images, stores, and social content) into user-defined collections. This user-curated list of content (i.e. channel data) is parsed and rendered in the client to enhance search and discovery of goods and services.
Any individual or group on OpenBazaar can create a channel. You can create channels for any subject or theme.
Channel authors are incentivized to keep a channel updated with freshly curated content. The goal is to enhance the discovery of valuable content, goods, and services across the OpenBazaar marketplace, thereby driving attention and sales.
How can channel authors monetize their channels? To monetize a channel, the author can display a smart contract. That smart contract is deployed on the Ethereum network. The purpose of the smart contract is to auction off premium content positions within a channel. An advertiser might bid on the top banner listing on a channel, for example, to drive sales.
Advertisers can target popular channels to purchase ad space, then pay channel authors in OBT.
In other words, channels can lead to the creation of a decentralized ad network.
Other Uses For OpenBazaar Tokens
OpenBazaar tokens give the platform more flexibility. The goal is to create a money substitute for the OpenBazaar platform – specifically for executing OpenBazaar smart contracts.
As OpenBazaar continues to grow, the developers plan to see new smart contracts funded by OBT, created by client developers.
Ultimately, OpenBazaar now has its own token, and it’s called the OpenBazaar token (OBT). The token will be used to facilitate smart contracts on the OpenBazaar platform.
Prior to the release of OBT, OpenBazaar’s developers argued that they didn’t need a token. In June, for example, they released a blog post explaining, “Why OpenBazaar Token Doesn’t Exist”. As of December, their stance has changed.
We don’t have any information about a release date for OBT – but we’ll keep you posted about this latest announcement from the world’s largest decentralized online marketplace.