How does a distributed market (like OpenBazaar) deal with trust? Is every transaction put into escrow?
The idea of a open, distributed market, is great. But the reality of scammers, cheaters, etc. is a big hurdle to over come. One of the great things about Amazon is the customer service, I don't really worry about not getting a product, or if I need to return an item to Amazon I am also confident that it won't be an issue. This seems really hard to accomplish in a distributed system with lots of small "shops".
There are two types of payments in OpenBazaar: direct and moderated.
Direct is when buyers completely trust vendors. There's no escrow and no safety net at all.
Moderated is when both parties agree to a third party moderator and the funds go into a two of three multisig account. Two parties need to agree to release the funds. Normally it's the buyer and seller but if they can't agree then they open a dispute with the moderator, who resolves the dispute and sends the funds to rhe winning party (or slipts them).
Moderators get a small percentage payout when disputes are settled. It's an open marketplace for offering moderator services.
The moderator doesn't have complete control of the funds (two parties are needed) and they aren't even aware of the transaction until a dispute was opened, so it has some advantages over traditional centralized escrow services.
The idea of a open, distributed market, is great. But the reality of scammers, cheaters, etc. is a big hurdle to over come. One of the great things about Amazon is the customer service, I don't really worry about not getting a product, or if I need to return an item to Amazon I am also confident that it won't be an issue. This seems really hard to accomplish in a distributed system with lots of small "shops".