Bitmarkets: A decentralized P2P escrow platform and open source marketplace

Whenever consumers hear the term “anonymous market,” they think of all sorts of illegal products and services associated with it, and in their view, Bitcoin facilitates these illegal activities. But Bitmarkets wants to give a different image to P2P decentralized markets.

There is one major difference between running a centralized online marketplace and a business model that uses P2P technology: centralized marketplaces require intermediaries to operate every transaction, which means that every transaction must pay fees to the intermediaries.

In addition, traditional online trading markets are closed source, which means that individual users interested in the project cannot participate in the maintenance of the platform. Imagine if eBay was an open source market project, what would happen? Then more people would participate in the project and help it improve, making eBay a household name.

The main problem with centralized exchanges is the lack of privacy protection for users and high transaction fees. Although users can use fictitious usernames to conceal their true identities, daily transactions still leak most of their personal information. Although most people don't think there is anything wrong with this, it can indeed be further improved.

This means that a standard P2P order combined with P2P payment is not the best solution. Users also need to have full privacy protection and do not need to pay any fees when using the platform. These factors are very important. In addition, the platform can still be further improved.

Bitmarkets, is an open source project based on P2P technology and concepts. They are also further improving the platform by introducing another P2P layer to the infrastructure. A P2P escrow system helps to ensure the safety of buyers' funds, and it also requires sellers to deposit a small amount of funds. The platform does this to provide ultimate security for both parties' online transactions. Both buyers and sellers have to deposit a margin in the escrow system. If either party commits fraud, the margin will be lost, thus preventing one party from deceiving the other for profit. If a buyer or a seller violates the rules and engages in such deception for a long time, they will be banned from trading on Bitmarkets.

The concept of Bitmarkets was proposed around 2013, and the project's application was demonstrated at the Amsterdam Bitcoin Conference in 2014. Soon after, Bitmarkets released the Apple operating system version of the platform to users around the world. Later this year, Bitmarkets will release clients for both Windows and Linux users.

Eliminate the need for artificial intermediary trustees

P2P escrow services remove the need for human intermediaries. When a transaction goes wrong, it is often difficult for human intermediaries to fairly resolve disputes between the two parties. Bitmarkets’ new escrow system ensures that fraud will not occur, as both parties will bear the consequences of their own fraud.

To explain more clearly how the Bitmarkets escrow system works, here is an example. When a buyer buys a product, he must first pay two funds, one for the actual payment of the product, and the other in the escrow service system. In turn, the seller must also deposit a sum of money equivalent to the price of the product into the escrow system. In this way, the seller knows that the buyer can afford the cost of the product, and the buyer also knows that the seller has actual funds, proving that the other party is a legitimate seller.

Both parties must sign the transaction at the same time and each send a portion of the funds to the escrow wallet address. If the transaction proceeds normally, both parties can sign the transaction, and the escrow system will return the remaining funds deposited by both parties to them. In the event of a refund, both parties must also reach an agreement on the refund and sign the transaction.

If neither party reaches an agreement, the funds will remain locked until an agreement is reached. This situation is very difficult for both parties to the transaction and also reduces the liquidity of Bitcoin.

Completely different from OpenBazaar

After listening to the introduction of Bitmarkets, some people may think of another online P2P market - OpenBazaar. In fact, there are big differences between the two. OpenBazaar uses a reputation system, combined with the Tor network, to provide a completely anonymous market and human participation in hosting.

While Bitmarkets does not provide anonymity and is not integrated with the Tor network, the platform aims to provide a legal solution to the P2P network market and remove the negativity of the P2P network market.