The Blog

TrueUSD to be integrated in the BitBoost marketplace

Stablecoins have already become an important feature of the blockchain world, allowing traders and other users to escape the volatility for which crypto is famous, while still keeping their funds in a form that can be quickly deployed into the market and moved around frictionlessly. We believe that stable crypto is of fundamental importance to blockchain e-commerce, which is why we have decided to integrate TrueUSD into our platform!

Crypto is notorious for its volatility. In fact, one of the regular objections to widespread crypto adoption is the problem of price stability: how can ordinary consumers be expected to use something that might lose 10-20% of its value in a day, and 80% or more in the space of a few months?

As a result there have been several attempts to create so-called stablecoins over the last few years. Some have used algorithmic alchemy to ‘peg’ their price to USD, such as Nubits and BitShares’ smartcoins. These have not found widespread acceptance and there are questions around their viability, not least because in some cases their models only work within certain tolerances of price fluctuations – meaning that their proposed answer to moderate market volatility is, ironically, vulnerable to extreme market volatility.

This explains why Tether has proven so popular. USDT tokens are supposedly backed 1:1 by real dollars, which are held in a bank account. Tether has become the de facto standard for locking value on the blockchain in the crypto world. However, there are numerous problems with Tether, not least the trust issues that continue to plague the company, and the fact that it is not possible for ordinary traders to cash out their USDT to a bank account.

The combination of clear market need and real or perceived issues with Tether is why we have chosen another solution for the BitBoost marketplace, TrueUSD. This again is backed 1:1 by funds held in bank accounts, but there are several differences to USDT. The process takes place within a clear legal framework. Holdings are regularly and professionally audited, with results published transparently. Moreover, the TrueUSD company itself doesn’t have access to any funds, meaning there isn’t the same conflict of interest that exists with Tether. (Tether and Bitfinex are essentially the same entity. As an analogy, this is like the Federal Reserve also owning the New York Stock Exchange. The potential for abuse should be clear.) Instead, there is a series of professional ‘Trust firms’ with dedicated banking facilities to ensure tokens can always been redeemed at $1.

All of this has the effect of moving USD onto the blockchain without the opacity and confidence issues that have (rightly) never left Tether. We are exploring integration now and will keep our community posted on our progress. We are excited to be able to add this service to the BitBoost marketplace, knowing that it will address one of the biggest obstacles to mainstream adoption of blockchain-based e-commerce. In the meantime, you can still use ETH to purchase items on the platform.

For more information, see https://www.trusttoken.com/trueusd/

The arbitration process for our marketplace explained.

This blog post will provide an overview of the BitBoost arbitration process, both as it will be in the first release and how it will expand and improve in future releases. We will illustrate how the system works with example scenarios.

Arbitration is a method of resolving disputes between buyers and sellers when they arise. Ideally, there would never be any disputes but, in reality, there will be disputes and we need to have a way to resolve them. This is not a role that can be played by smart contracts alone – resolving disputes will require human judgment about matters that are open to interpretation, so arbitration will be done by people, not code. BitBoost has built the code to make arbitration possible, but in the end, that code is only in place to support, not conduct, arbitration.

The Arbitration System

Pricing model

Arbiters only charge for performing arbitration; the arbiter only gets paid if there is a dispute that s/he settles.

Arbiters will charge a percentage of the item’s final selling price for their service. The percentage will have an upper limit, to prevent an arbiter from taking advantage of inexperienced sellers: the upper limit is 20%, set in 0.5% increments, starting at 0.0%.

How will arbitration work?

At launch, there will only be one, default Arbiter. The default Arbiter at launch will mainly work in English, though other languages may be arranged. After launch, BitBoost will open up the Arbiter Verification process in order to add additional service providers.

Arbiters will be ‘insured’ against bad arbitration and thus add to the trust of the process.

On the initiation of a dispute, Arbiters will be able to chat directly with both the buyer and seller. The Arbiter will also receive access to the chat log between buyer and seller. Chats are encrypted in transit and at rest, and can only be decrypted by the Arbiter in the case of a dispute. If a transaction is completed without a dispute, then chat logs are permanently deleted.

Upon reaching a decision, the Arbiter has three options. S/he can send the disputer funds 1) only to the buyer, or 2) only to the seller, or 3) to both buyer and seller in some ratio that the Arbiter chooses. The Arbiter’s fee will be subtracted from the disputed funds before they are released to the buyer/seller.

We have included examples of Arbitration at the end of this post.

Arbiter control

Arbiters do have control over how they operate. They can set the following three things:

– what they charge, as explained above

– the languages in which they can work

– the amount they are “insured for,” which is the amount they currently have in their “insurance account” (more on this below)

Arbiter verification

BitBoost must verify Arbiters. This will be like the blue checkmark that Twitter offers to some of their users. BitBoost Marketplace is our product, so BitBoost must verify all Arbiters. Arbiters will have to pay a non-refundable fee up front to BitBoost to cover costs to review them. They will have to identify themselves with government documentation.

Arbiter ‘insurance’

Once BitBoost verifies an Arbiter, that Arbiter will contribute to an ‘insurance account’ representing the Arbiter’s value to the seller/buyer. This will act as an ‘insurance’ policy for buyers and sellers against bad arbitration and thus add to the trust of the transaction process. In the case of a bad arbitration decision, the buyer or seller can contest the Arbiter’s decision (see below), and this deposit can be used to reimburse the injured party if necessary.

An Arbiter may withdraw some or all of their insurance deposit at any time, even if they have just deposited it. Exceptions: If you have been selected as an Arbiter, some or all of your money may be locked into a smart contract. This money will be returned as soon as all active transactions are closed by the buyers.

For instance, a large ticket item costing $2000 with a potential arbitration settlement of $2000 could lock $2000 (or as close to $2000 as the Arbiter’s deposit allows) into a smart contract in the case of a contested arbitration decision, until the dispute is resolved.

Only when the transaction goes into dispute, and the Arbiter’s decision is contested, does the maximum possible award go into a smart contract while the governing body decides on a resolution. At that point, the money is either returned, in whole or in part, to the Arbiter and in whole or in part to the disputing party. For the time during the contested dispute, that money cannot be available to be locked for other transactions.

Only in the case of an arbitration being requested, completed, contested, and then found 100% in favor of the non-arbiter would this money be lost. This is unlikely but possible.

If payments are made from this fund, it will change that Arbiter’s value to buyers/sellers (in terms of the highest ‘insurance’ amount).

Arbiters can be listed as ‘insured’ up to the amount of their deposit. For instance, an Arbiter who has deposited more could be more valuable in the case of higher priced items/listings.

Arbitration ‘SUPREME COURT’

There will be a sort of ‘Supreme Court’ for contested arbitration decisions. This anonymous group or committee will gain control over the escrowed deposit in the case that buyer or seller disputes the Arbiter’s decision. The funds will be held in a smart contract that can be publicly inspected and audited. The group must be anonymous so that they cannot be contacted and bribed for positive results.

Examples or arbitration

*Example 1: The basics*

We have 4 parties: the seller, the buyer, the Arbiter, and the arbitration court. The seller chooses the Arbiter at the time of listing. Arbiters set their own fees for their service. In this example, assume that the Arbiter has set an arbitration fee of 5%.

The seller creates a listing and chooses the Arbiter. At this point, the Arbiter does not get paid.

The buyer buys an item. His money moves from his wallet to the escrow contract.

The seller ships the item. The buyer receives the item.

At this point, the buyer can finalize the sale, or open a dispute. If he finalizes the sale, the money moves from the escrow contract to the seller. The Arbiter does not get paid.

If the buyer opens a dispute, two things can happen.

1: the seller agrees with the dispute, and the money moves from the escrow contract back to the buyer’s wallet. The Arbiter does not get paid.

2: the seller also wants to open a dispute. In order to do so, the seller must pay 5% of the disputed amount to the Arbiter. This will be built into our smart contracts, so it happens automatically, from escrowed funds, if the seller also opens a dispute.

At this point, the Arbiter will gain control of the escrowed money, and can send the money only to the buyer, or only to the seller, or to both buyer and seller in some ratio that the Arbiter chooses, minus the arbitration fee.

Arbitration can be started by either the buyer or the seller; however, the seller will always pay for arbitration because the Arbiter’s percentage comes out of the cost of the item.

*Example 2: Seller pays for buyer’s mistake*

Because the arbitration fee comes out of the escrowed funds, it is the seller who always pays for arbitration, even if the dispute is the buyer’s fault. The seller needs to take this possibility into consideration when pricing his items.

In this example, the seller is selling a kitten for 1 ETH. He selects an Arbiter who charges a 5% fee for arbitration, so the fee is 0.05 ETH. A buyer places an order, and the seller approves it. The seller tries to mail the kitten to the buyer, but the shipment is returned because the buyer gave the wrong shipping address. The seller contacts the buyer and asks for extra money to pay for a second shipping fee. The buyer refuses to pay for the second shipping fee, even though the extra expense is his own fault. The seller does not ship the kitten a second time. At this point, the seller decides to open a dispute. The dispute is eventually decided in the seller’s favor, and the Arbiter awards the seller the shipping fee, minus his 0.05 ETH, from the escrowed funds, and returns the rest to the buyer.

*Arbitration Example 3: Arbiter selected but no dispute*

If there is no dispute at all the Arbiter never gets paid, so choosing an Arbiter is free for the seller as long as there is no dispute. There is never a cost to the buyer.

How to manage buyers’ data in our platform

How to manage users data in BitBoost Marketplace

With the new GDPR laws now in effect, sellers will need to know a little bit about how to deal with the data of their European buyers. Here is an overview of some of the factors it helps to understand.

BitBoost’s marketplace allows anyone, anywhere in the world to do business with each other. Unlike conventional e-commerce platforms, there are no restrictions for certain countries or jurisdictions. Buyer and seller connect on a peer-to-peer basis, with the ability to trade with whoever they want, assuming that both parties agree.

While this gives a high degree of freedom to all our users, it also shifts the burden of responsibility onto them for understanding and observing any relevant laws or regulations within their jurisdiction. For example, sellers are responsible for their own taxes, and deciding whether they need to pay VAT – which varies from country to country. The same is true of the way customer data is handled. With the EU’s General Data Protection Regulation (GDPR) now being enforced, sellers will need to be aware of how they should treat buyers’ personal information.

No personal data until sale

On our platform, sellers will only have to worry about dealing with customer data after a purchase has been made. While the buyer is still browsing and going through the purchase process, no personal information is collected – it is only when the sale is finalised that details such as the address for delivery are provided to the seller. However, invoices and delivery information will include personal data, and as such should be treated carefully.

Data is valuable – and possession is nine tenths of the law

The maxim has become that data is like the oil of the internet. It’s hugely valuable. Online services run on data, collecting and monetising it in a variety of ways. E-commerce is no different – but the advent of GDPR means that this is going to change. No longer can businesses collect and use customer data without their explicit consent. One of the core principles of GDPR is that personal data is just that – personal – and that customers have the right to determine what is done with their information.

Transparency matters

Previously, online businesses were typically opaque about the data they collected and how they used it. Not any more: if you want to keep customers’ details and use them in some way later, you need to be up-front and transparent about exactly what you’re doing. Your customers will also need to give explicit consent to this. That means drawing it to their attention in clear language, and not bundling it with many other issues in your terms and conditions. It’s no longer acceptable to assume consent on the part of your users, and it’s also important to give them the ability to withdraw consent easily in the future.

If customers want, they are within their rights to demand to know what data you are holding about them. They can ask to see a copy of it, they can ask to have that transferred to another business, and they can require that you erase it.

Separate consents

One of the things businesses will need to get used to doing is taking a more granular approach to data use. Previously, a catch-all tick box would typically be used to cover a wide range of activities. However, merchants are now required to confirm consent for each different purpose. GDPR is quite specific about this. Separate tick boxes are needed for order processing, marketing, and statistics or transfer of data to other companies. Accepting each one of these must be a distinct, deliberate action for the customer. Pre-checked boxes are no longer allowed!

What if it goes wrong?

Data breaches are a fact of life for 21st century web businesses. No one should be complacent about this, but the odds of data going missing or being corrupted or stolen are high. GDPR states that customers have a right to know when there is a data breach – this is their personal information, after all, and they need to be able to mitigate any damage that might be caused by it (e.g. by changing passwords).

Any company that experiences a leak or breach in its data storage must report the incident to the relevant supervisory body no more than 72 hours from the moment they notice the problem. There are some heavy penalties for non-compliance, so aside from making sure your security is up to scratch and any data you collect is stored carefully, it’s worth knowing who you should report a breach to. Information about your supervisory body should also be made available to customers, since they have a right to know who to make a complaint to in the event of a grievance arising (see the List of National Competent Authorities).

Making life harder?

There’s an overall sense that GDPR will make life more difficult for e-commerce companies. There are some potential short-term impacts; for example, the new laws will make it harder to carry out mailing campaigns, since every single person on your email list needs to have given consent for you to contact them. The inevitable result is that mailing lists will become shorter. In fact, the Wetherspoons chain of pubs recently deleted its entire email database, saying it would no longer send out newsletters this way. (There was some speculation that it may have been a result of the company losing track of who had given consent, and therefore running the risk of heavy fines if they sent any further emails.)

As a general principle, though, GDPR brings greater clarity to e-commerce businesses as well as their customers. It formalises rules that already existed, but that were rarely enforced. It also places businesses on a more sustainable footing for the future. In codifying the rules around the collection of personal data and ensuring its transparent use, it lays the groundwork for forward-thinking businesses to regain the trust that has been lost by many large online corporations.

For more information, see https://www.eugdpr.org/.  

Why not just use PayPal, eBay or Amazon?

 

There are a handful of names that are practically synonymous with e-commerce, but all of the mainstream platforms come with strings attached – which is why we think there’s a big potential market for BitBoost.

There are already a number of well-established e-commerce platforms and payment processing services, most notably Amazon and eBay, which also bought PayPal back in 2002. These have significant network effect and will not easily be unseated from their place at the top of the pile (Amazon was in the top 10 Google searches for 2017, to give an idea of its ubiquitous web presence). And yet, e-commerce as it currently exists has many drawbacks. BitBoost’s marketplace aims to address the most serious of these with a blockchain-based platform on which buyers and sellers can interact directly. So what, exactly, can BitBoost offer than conventional e-commerce cannot?

Fees

One of the biggest problems with mainstream e-commerce platforms is the fees. Many consumers will be unaware of these, since they are hidden from buyers. For sellers, though, it’s a different matter. Fees are how e-commerce sites make their profits, but the commissions can be punitively high – up to 20 percent, in some cases, and often well into double figures depending on the product. This represents a real problem for small businesses, who have their own websites and sell direct to customers but who need the exposure of a large marketplace in order to reach a wider audience. The high commission fees erode the benefits of accessing more customers, but there is very little choice in it for businesses.

Additionally, there are charges associated with credit card fees. These can also be relatively high, and are a particular problem for high-turnover, low-margin businesses. Again, their impact is generally hidden from the buyer.

BitBoost’s platform will not charge any fees for users, beyond the small fees paid by sellers after a successful sale (there are no up-front listing fees; the cost to the seller is 0.9% of the price of the item sold, or a flat fee of $0.10 USD if the price is under $10). Additionally, there are almost no charges associated with payments. Transaction fees on the Ethereum network are very low compared to credit card companies and international payments via the banking system. The overall savings can be shared by buyers and sellers, with cheaper prices and higher profit margins.

Privacy

Centralised platforms like eBay and Amazon always require users to register and log in, typically with an email address and usually far more extensive information about themselves. This personal information is used and abused in a variety of ways. Aside from being the basis of the ads you receive (along with other browsing data), it may be shared with third parties, used for wider marketing, sold or stolen by hackers.

The only way for an e-commerce platform to keep personal data safe is not to collect it in the first place. BitBoost’s app can be used without any registration or personal information at all being shared. All that is required is an Ethereum address, which can be created when the user first accesses the platform. Crypto addresses are pseudonymous, and when used carefully there is no easy way to trace them to a real-world identity. In fact, buyers can use a separate address every time, if they want. They can also use their own Ethereum node to broadcast transactions, should they wish. This ensures a high degree of privacy when using the marketplace.

Direct access

Online marketplaces mediate every relationship between buyer and seller. They enable buyers to find (or not find) certain stores; they handle communication between them, with oversight of every message sent; they manage payment, taking a fee; and they handle any arbitration necessary in the case of a dispute, which is often resolved without a full understanding or appreciation of the circumstances. The software itself is hosted on a centralised server, so from time to time it may simply be inaccessible and users cannot open their accounts. Alternatively, if an account is suspended for one reason or another, there is little the user can do. They are forced to wait while the platform administrators go through their policies and processes – and there is no guarantee an account will be reopened at all.

BitBoost’s marketplace ensures direct contact between buyers and sellers at every stage. There is no unnecessary moderation, mediation or interference. Escrow ensures safe payments without intruding into the process, and the only time a third party is introduced is in the case of a dispute, when arbitration is necessary. Because it runs on the blockchain and uses smart contracts, there is no downtime, and accounts cannot be closed – there is no central authority who can block accounts.

Effective protection for buyers and sellers

BitBoost features escrow for payments and arbitration by a third party in the case of a dispute. The arbiter is independent, agreed by both buyer and seller, and is not a representative of BitBoost or the platform. This removes the conflict of interests that exists with mainstream e-commerce platforms. eBay, for example, is notorious for siding with the customer in the case of a dispute, because their business model is predicated on attracting as many buyers as possible to the platform. Thus sellers may unfairly be hit with chargebacks if a customer fraudulently claims that an item never arrived, and has their payment reversed.

Growing network effect

BitBoost isn’t exactly starting from scratch in terms of its user base, thanks to its existing token sale community, but the plan is to bootstrap adoption with a series of merchant partners. This will help build network effect quickly. We also anticipate that the marketplace will appeal to particular demographics, including the crypto community in general, the large Ethereum community more specifically, and those who struggle to access traditional e-commerce platforms for one reason or another, perhaps due to their location or available banking facilities.

Conclusion

BitBoost’s marketplace is the first of its kind: a decentralised platform where buyers and sellers can meet directly and conduct e-commerce. The peer-to-peer approach is fundamentally different to conventional e-commerce solutions like Amazon, eBay and PayPal, and there are good reasons why users would want to opt for BitBoost rather than one of the mainstream platforms. Chief amongst these are the low fees, lack of intervention, privacy, and direct access to customers for sellers. There is no unnecessary mediation, just free trade for anyone who wants it.

No trust needed, a new approach for e-commerce using the blockchain.

E-commerce has always fundamentally involved trust. BitBoost’s marketplace changes that for the first time – ever.

Ever since cash moved away from being pieces of precious metal we exchanged directly between us, the monetary system has required trust. When the first coins were minted 2,500 years ago, you had to trust the issuer (typically the king) that the metal content was equal to the face value of the coin. Needless to say, most of the time it wasn’t, the difference representing profit margins of varying greed and acceptability. When the first banks arose, you had to trust that they owned the gold that backed the paper notes they issued. When money moved into the electronic realm several decades ago, even more trust was required – as shown by the story that one of our UK users recently shared with us:

‘When I first went to university, back in 1997, the internet was still in its relative infancy. Everyone was given a university email address, but we still had to access it over telnet, for example. I needed a particular book and the only place I could get it from was the US, so I emailed the book dealer. He told me he would need my credit card number – in those days, there was no PayPal – but that, for “security”, I should email it to him in two sections!’

There are a couple of points to be made from this great little illustration of e-commerce, 1990s style. Firstly, tech moves fast. That happened in 1997, and less than ten years later we had one-click ordering on Amazon, with instant search and payment seamlessly integrated into the platform. Blockchain is moving at a similar pace – faster, even, because it’s building on that existing tech, e-commerce framework and culture. 

Secondly, the need for trust hasn’t changed: it was and remains an integral part of the conventional e-commerce environment. It may no longer involve emailing your credit card number (presumably to be entered manually into the merchant’s PoS terminal in his store), but trust is still a feature at every stage. And trust, as we’ve found in a series of episodes to impact the tech world, has a habit of being broken.

Trust online

When you buy items on the web, you are placing your trust in a number of different entities. Obviously, there is the seller, who you trust to dispatch the product that you bought, in good condition and in timely fashion (and not, if it’s 1997, to steal your credit card details). Thanks to the development of effective reputation systems and sellers’ desire to maintain their status and livelihoods, this is probably the least of your worries now. It takes a long time for a seller to build up the strong reputation that makes them a popular option for buyers, and they will go to considerable lengths to protect it. Generally, reputation systems work pretty well, since it’s hard to fool the crowd and poor customer service is made plain for the world to see.

But you’re also trusting the platform – the technology developed by eBay or Amazon – as well as the company behind it. Servers go down, databases are hacked, businesses go bankrupt, or change their terms and conditions, or make decisions about who can and can’t use them. Then there’s the payment processor, whether that’s PayPal or your credit card provider, who can block or reverse transactions. Depending on their arrangement with the e-commerce platform, that may consistently work against you – PayPal, for example, has a policy of siding with the customer in disputes around eBay orders, meaning that sellers are often hit with unfair chargebacks.

In short, life online entails trust. These are big corporations with very lucrative businesses to defend. They can do pretty much whatever they want, and there have been enough stories about unfair business practices and unjust policies towards their users, to make it clear that customers are being forced to trust something that is at heart untrustworthy (see the controversies around Amazon for more details). That is not a good position to be in. Until now, though, consumers have never had a choice.

Detrusting e-commerce

Centralisation inevitably entails control, and therefore trust. The history of humanity and technology – and especially money – has been a story of increasing centralisation. Blockchain finally starts to reverse that trend.

BitBoost’s marketplace is built on the Ethereum platform’s smart contracts, which execute automatically when the given conditions are met. Simply, this takes the trust element out of our e-commerce platform’s infrastructure. As John Gilmore, one of the founders of the Cypherpunks movement, said, ‘That’s the kind of society I want to build. I want a guarantee – with physics and mathematics, not with laws – that we can give ourselves real privacy of personal communications.’ We know that cryptography and the blockchain offer a far more reliable and fair foundation for a platform than any regulatory framework or code of conduct.

This enables a totally different approach for e-commerce. There is no company to take a cut of profits, to intervene in the purchasing process, or to reverse transactions. (BitBoost is able to operate a completely different business model thanks to the blockchain, and doesn’t need to charge commissions or other fees.) E-commerce is, finally, much like regular commerce in the physical world, as it always used to be. The buyer connects with the seller, hands over cash directly, and receives their goods. The trust involved in the last step, the delivery of items, is also managed by smart contracts and an escrow system that ensures there is fair arbitration with an independent arbiter in the event of something going wrong.

No trust required

And so, third parties no longer need to be trusted when buying and selling online. Trust, where it is required at all, is in the protocol – something that is underpinned by strong cryptography and powerful economic incentives. Smart contracts offer a fundamental advance for e-commerce, enabling it to evolve beyond its current model into something qualitatively different.

BitBoost’s marketplace is the first full-featured platform of its kind: a trustless e-commerce application, built on the blockchain. We have done everything we can to ensure that it combines the best of both worlds, with a great user interface and sellers’ tools, but without the centralisation and trust that come as standard with eBay and Amazon. We’re thrilled that you’ve chosen to find out more and hope you’ll join us on our journey!

Our approach to open source

At BitBoost we have been working hard to launch a great e-commerce marketplace over the Ethereum network. We have been talking about its main features, and also about how our customer will benefit from them. Now, we would like to announce that we are going open source, and how it will look.

Our marketplace has three “moving parts” in it:

  • The user interface.
  • The protocol with the smart contracts, running all the business operations.
  • And a caching system we call e-cache that controls the access to the protocol, records transactions to the blockchain, and manages tokens for that purpose.  The connection between the client (the app) and the protocol is done through an API, which allows the client to talk with the protocol.

Basically, we are opening up the code of the user interface, and we are also creating complete documentation for the API. The e-cache system will remain private, and this is because it’s where the listing payments, using our token, will happen. Hence, we need that to build a sustainable business!

What does open source mean for our project? We are building the foundational stones for an ecosystem, where people will be able to:

  • Build their own marketplace using our code, connecting it to the smart contracts through the API.
  • Connect their own e-commerce shops to our marketplace, getting the benefits of our smart contracts through a simple API.
  • Build e-commerce plugins and solutions for the most popular software solutions, such as Woocommerce and Magento, easily connecting them to the blockchain using our API.

Running an open source project is something that will be really helpful to grow our community. But besides that, we are also testing and hopefully growing a new brand business solution: a decentralized marketplace.

What does a decentralized marketplace mean? To understand it, we should first identify the core feature of a marketplace. And it’s not code. It’s the network effect. Marketplaces are great and work wonderfully because they have a network effect: the more people who use it, the more value it provides to all the participants.

Until now, the network effect has been built in a silo. Amazon has its own network effect, as well as eBay, Etsy, and many others. You can only participate in this network effect if you join the specific silo where it is built. With our open source ecosystem, we can break down the silo, because the network effect is built not on the platform level, but in the protocol layer.

Let’s explain the process. If you want to join the network of people doing e-commerce with us, you can either join our platform (the BitBoost Marketplace) or create your own shop, connecting it to the blockchain using our API. In either case, your inventory will be always available. It will be sold through your platform, through our marketplace (which will be a window to all the items listed in the protocol), or even through other e-commerce shops connected to the marketplace that decide to show your inventory. So simple. Everything is in the protocol, so everybody listing anything on it will contribute to the network effect, without even using our platform.

That’s our approach to building a decentralized marketplace. It will no longer require the use of a single platform; instead, a myriad of e-commerce sites will connect to the protocol in a decentralized way, with nobody controlling the process. This is a new concept that we want to explore and grow.

In the next few weeks, we will start publishing and promoting the API, the open source code, and a few more ideas and projects to build more apps over the protocol. And we are also organizing a hackathon to invite developers and business people to think, figure out, and code new solutions using our code and API. Join us, and let’s build the future of decentralized marketplaces!

New fees for BitBoost’s marketplace: a brief explanation.

new-fees

We have determined a way to charge sellers even less, allowing more people to use our app! We’re so excited to be finalizing and testing our code this week. This means the new model will be a part of our soft release happening on Monday, 25 June!

The old way

Almost a year ago, we published our first blog post about how our fees would work once our marketplace app was live. We considered two things. First, for this project to be sustainable, it had to make some profit. Secondly, the fees had to make sense for users. We needed a simple, inexpensive, pricing model so people could use our app. We said “Every seller pays one dollar in BTT (BitBoost token) for every listing. This will be the only fee required to use our blockchain-based marketplace, and goes to support BitBoost…These minimal fees will be our financial fuel to do that.” At the time, one dollar per listing sounded like a pretty good deal!

Why the change?

For the last year, we’ve been listening to our community and considering potential user issues with fees. We came up with several things. For instance, what if someone posts 100 listings and none of them sell? That person just lost $100! Or, what if you’re from a developing country and $1 per listing is too much?

To fulfill our mission of making e-commerce easier for everyone, we had to make a change. Our new model makes our app more affordable and opens up a global marketplace to more people.

What has not changed?

  • Buyers pay nothing to BitBoost.
  • Sellers pay a listing fee to BitBoost.
  • The listing fee is paid in BBT, the internal currency of BitBoost Marketplace.

What is NEW?

  • Sellers can list as many items as they want without paying an upfront fee.
  • Sellers only pay listing fees once an item has been sold.
  • Sellers will be charged less than 1% of the cost of each item that they sell.

Seller/Buyer Listing Cycle

Let’s say that “Sarah” wants to sell items on BBM (BitBoost Marketplace), so she buys some BBT on an exchange. Since BBT are a cryptocurrency, the price will vary from day to day. In this example, we’ll say the cost is 0.20USD per token. Sarah spends $20 and receives 100 BBT which she puts into her BBM wallet.

Later that week, Sarah opens the BBM app and creates a listing to sell an item.

Scenario 1: A buyer wants to buy the item in Sarah’s listing.

The buyer clicks BUY and the app takes the purchase price (paid in ETH) from the buyer’s wallet and puts the ETH into a smart contract.

In a few days, when the buyer receives his purchase, he goes back into the BBM app and clicks the Finalize Purchase button. This results in two events. First, the app collects a listing fee from Sarah’s wallet. Second, the app releases the ETH in the smart contract to Sarah’s wallet.

Sale completed!

Scenario 2: If no one buys the item in Sarah’s listing.

The listing expires and Sarah doesn’t have to pay any BBT. However, the listing information is stored on Sarah’s expired listings page in BitBoost Marketplace so she can easily repost this listing if she wishes to do so. She’ll find a buyer next time!

Details of the New Pricing Model

Now, our listing fee is less than 1% of the cost of goods sold. If the cost of each item is $9.99 or less, the Seller will only pay 0.10 USD. If the cost of each item is $10 or more, the Seller will only pay 0.9% of the cost of each item sold. To show how it works, we offer this chart:

Listing fee

According to our old model, if a seller put an item up for sale for $10 on BBM, he’d have to pay $1 in BBT. That would be 10% of the sale, if it sold at all. If it didn’t sell, he would lose $1. Now, he only has to pay 0.09 USD, which is less than 1% of the sale, and he only pays when he makes a sale!

What if my listing contains more than one item?

No problem. Sellers now pay per item sold. Selling items for less than $10 each? You’ll pay 0.10 for each one sold. Items $10 and over? You’ll pay 0.9% for each item sold.

Let’s say that Sarah wants to sell 10 lamps at $50 each. For each lamp she sells, she’ll pay 0.45 USD. If she sells 10 lamps, she’ll pay $4.50 in BBT for the listing and collect $500. If she only sells 5 lamps, she’ll pay $2.25 in BBT, collect $250, and the remaining lamps will show up in her Expired items list so she can easily relist those later.

What else does BitBoost have planned?

We will always be considering how to improve our app, and that includes our pricing model. The BitBoost team believes that users should have options of how to pay for items on the marketplace, as well as listing fees. BitBoost is working on making it possible to buy BBT directly from the BBM wallet. Someday, maybe soon, we will offer more currencies, a stablecoin, or even fiat payments. If there is a reasonable way that BitBoost can innovate and improve our products, we will do it!

We listen to users’ needs! Have suggestions? Contact us at [email protected]

Some basic tax advice for sellers.

VAT and tax arrangements for sellers

As a seller on the BitBoost marketplace, you are responsible for your own taxes, including income tax and VAT. These will be different depending on your jurisdiction, so you should ensure you stay up to date with current regulations. The marketplace will include some tools to help sellers manage their accounts in due course.

Like traders on most e-commerce platforms, sellers are responsible for their own tax and accounting arrangements. This will include income tax – that is, the tax you pay on and profits – and VAT or GST. If you are holding cryptocurrency (ETH and/or BBT) in your account, which you later sell at a profit, you may also be liable for capital gains tax. Once again, the rules for how this applies vary according to country.

Please note that BitBoost do not claim to be tax lawyers or accountants. None of the following constitutes expert advice and should not be taken as such. Please inform yourself of the appropriate regulations for your jurisdiction and seek independent, professional advice if necessary.

Of the three, the rules around VAT are likely the most complex. If you are just making an occasional sale, you probably won’t have to worry. If you run a store for a living, though, you’ll need to know your way around the VAT system. The size of your turnover, the locations of your buyers and also their nature (business vs individual) may have a bearing on whether you need to pay VAT and, if so, how much.

The following resources may be of some help in understanding VAT and other forms of taxation:

We’ll be adding some tools to the marketplace to help sellers track their activity, with a view to making it easier to figure out your tax affairs. Meanwhile, if you are in any doubt then a conversation with a tax professional should help to clarify matters and can end up helping you save a lot of money.

BitBoost marketplace: a different paradigm for user data

paypal and the e-commerce privacy problem

The E-commerce business has currently a privacy problem.

Every major e-commerce platform harvests personal data, often sharing it or even selling it to third party providers. For users of Amazon, PayPal and eBay, there are no choices about this. It is presented as a fait accompli, simply the price of doing business. Operating differently needs not just a different attitude to customer data, but a whole new business paradigm and platform architecture – which is where BitBoost’s marketplace, with its ‘Don’t track, Don’t store’ approach, excels.

The Internet is the most liberating tool for humanity ever invented, and also the best for surveillance. It’s not one or the other. It’s both.

– John Perry Barlow, cyber rights activist

The recent storm around Facebook and Cambridge Analytica has raised fresh concerns about the theft and misuse of personal data. But there is another dynamic at work within e-commerce and other online services: the harvesting and distribution of personal data to third parties, completely legally but without users’ explicit consent – and on a scale that many customers will find almost unbelievable.

Sharing economy, shared data?

It’s a truism that online services collect personal data, but users generally assume that this is stored securely and used benignly, typically to conduct KYC and ‘improve services’ or similar. Unfortunately, interrogating that assumption demonstrates it to be deeply flawed. Where the platform requires real-world information such as home address, phone numbers and so on – as major e-commerce platforms do – serious concerns may arise.

Take eBay, for example, which will freely distribute the data provided by buyers and sellers to any prospective transaction partner who asks for it. In practice, this can be anyone at all, subject only to them registering on the platform. This isn’t simply a matter of privacy – it may be one of physical safety. Many sellers operate from home as a full-time business and the details they give to eBay are their residential addresses and personal phone numbers. Anyone selling an expensive or rare item constitutes a honeypot for criminals. When one critic asked for further information, eBay answered with the following: ‘Typically the seller shouldn’t have anything to worry about, as we only allow members of eBay to request contact information. We allow any transaction partner (including a bidder) to request the buyer/seller’s contact information. This includes a phone number, and the address. This is for all members of the site, and something we’ve found be very helpful overall. There’s not a way to opt out of this as we expect it of everyone on the site, namely because we’re only a venue and don’t buy or sell the item directly.’

Remember that phrase: ‘Typically the seller shouldn’t have anything to worry about.’ It falls somewhat short of being reassuring. Meanwhile, the company pushed responsibility for any problems that might arise from external communication onto the seller – suggesting that any harassment be dealt with by local law enforcement.

Then there’s PayPal, the payments processor owned by eBay, which shares customer information with a staggeringly extensive list of third parties. These may not be other buyers and sellers, but they certainly make up for it in number.

eBay’s business involves matching buyers and sellers. Where the e-commerce platform acts more like a broker, there’s another dynamic at work. Amazon also collects a bewildering amount of personal information about its users, much of it based on their search histories as well as what they actually buy. It does not sell this information to third parties (it says); instead, the data is used to build up an extremely detailed picture of its customers in order to present them with items that match their interests. On the one hand that’s fair enough, but Amazon also make it impossible to delete the data it has collected on you – which they will share with third-party affiliates. Even closing your account will not work. There is nothing customers can do about this: those account records allegedly represent part of their ‘business transaction records’ and will be retained by the company forever.

BitBoost: privacy guaranteed

These concerns about the large-scale use and misuse of personal data are one of the factors that has led BitBoost to create a blockchain-based marketplace that operates on entirely different principles and values. Privacy is at the heart of the platform, which is built from the ground up to protect users’ data and takes a ‘Don’t track, Don’t store’ approach to personal information.

Mainstream e-commerce platforms require registration, which is the first stage of the long data-harvesting process that will ensue. BitBoost doesn’t need any email addresses or even a password; the platform is accessed via an Ethereum address that is no more than a string of random characters, and inherently pseudonymous. This is used both to identify users and make payments, with further information being provided on an absolutely voluntary basis. Since strong encryption is built into every blockchain, there are in-built safeguards around orders and communication between buyers and sellers.

Amazon and eBay use credit cards and payment processors like PayPal, which not only share financial data with a wide range of counterparties but mediate in the case of disputes – often investigating in a cursory manner or simply siding with the buyer as a matter of policy. Sellers are frequently hit by chargebacks as a result. With blockchain-based payments and smart contracts, effective escrow and third-party arbitration becomes a reality, and a feedback mechanism ensures that the best and most trusted arbiters are rated more highly.

Ultimately, this isn’t just a marginal improvement but a complete paradigm shift away from data sharing as a tool of doing business. Data is personal and BitBoost ensures that the user remains in full control of their personal data at all times. In the course of using the platform, privacy isn’t considered a privilege, or even a right that needs protecting wherever possible – it is a sine qua non, something valued so highly that its integrity is never threatened as a matter of both policy and design.

 

Sellers will need BBT. This is how to get them.

The BitBoost Token (BBT) is a utility token, designed to enable users to list their goods on our e-commerce app. Since they will need BBT in order to use our service, sellers will also need a way to purchase tokens.

Tokens can be bought and sold on participating exchanges. For regulatory reasons, BitBoost has taken no action to get our token listed on any exchange. However, in anticipation of our live app release coming in June, some exchanges have independently decided to list our token. Sellers can therefore find the BBT on EtherDelta and other sites.

Most recently, the BBT has been added to Crex and BarteDEX by the staff of those exchanges. Crex is a low-tier exchange, with dozens of tokens already available. As a centralized exchange, it is ruled by a staff, with a support hotline available for all of the traders. BarteDEX is a decentralized exchange. It is open source and free for everyone, but lacks the customer support features of centralized exchanges.

We, at BitBoost, would like to remind you of the risks involved with using exchanges and with the use of digital tokens in general. Blockchain is a new world of technology. There is great promise but, as with all things, it is not perfect. The various government regulatory bodies are working to protect you but they are still in the process of determining best practices. You should learn as much as you can before choosing to use any digital token and before getting involved in any blockchain project.

BitBoost has created a Risk Disclosure document to help with this. You can find the link at the bottom of every page on our website by clicking “Legal.”  

Meanwhile, we would like to express our gratitude and appreciation for your support and patience. Blockchain projects can disrupt current practices and change the world, but we are nothing without our communities. Keep learning. Keep making great suggestions to help us redefine e-commerce. We listen. Thank you!