Welcome
Welcome to our new forum! Those who have been following the events of the past week probably realized that I should have created a forum for these thoughts a long time ago. I won't go into boring detail about the previous events; you can read about what happened in detail if you care at http://reddit.com/r/bitcointhoughts.
This forum will provide us with more freedom to do what we want without reddit's administrators being able to overrule Kibubik, who will continue to moderate this forum. As before, I will not delete posts here. I don't want to create huge codes of rules, so I propose a "common law" approach of rulemaking; we will use precedent set in earlier cases to create only the rules that are necessary. However, there are a few restrictions I think that should be kept from the previous forum:
- Rule #1 ("be excellent to each other") still applies here.
- This is a family-oriented place, so obscene and sexual language is not permitted.
- Posts older than a week will never be deleted, even if banned.
- If you violate the rules, you will be warned first, so that people who do so unintentionally won't suddenly find themselves gone.
- There are no "shadowbans" and what you see is what other people can read too.
Comments on reddit content
One of the common refrains I hear on reddit is "we need more people like you," whether "you" refers to me, moral_agent, Emocmo, or anyone else. Many people seem to feel that most reddit posts are not detailed enough and lack content. I happen to agree with this assessment.
Last weekend, I spent some time researching the issue of "shadowbans," which had apparently caused controversy in the past quite often. Reddit's source code, when you look through it, contains a lot of shady things. For example, some posts are automatically downvoted by the system just as if a person had downvoted them (which violates their own policy of one vote per person). When posts are removed from a forum by its moderators, the poster doesn't see any indication that they are gone. When unrelated users are shadowbanned, you probably weren't aware that entire threads of your own posts also disappear sometimes dating back for years.
There was a guy several years ago who had contributed karma of more than 150,000 who was suddenly banned without warning on the grounds that he had created accounts to downvote people who opposed his viewpoint. I do agree with the rule of "one vote, one person," but a permanent ban for such an offense on the first time is unreasonable. He wasn't the only one; the Internet is awash in stories of moderators of big subreddits who suddenly disappear one night, causing a stir among readers of those subreddits.
I have yet to read a story of one of those people returning to reddit after a ban, and that gets down to the core of the problem with reddit's lack of quality content. There are two issues here. First, people leave because they cannot trust the administrators to be fair and warn them before issuing bans. When spammers or people who contribute one-line replies are banned, they just create new accounts and continue their useless contributions. When people who spend a lot of time on the site are banned, they see that they could get banned again and don't return. Not only that, people of both types lose respect for the rules when they are banned so easily. While I was always careful about not submitting what could be considered as spam, in the future I probably won't hesitate to create a new account and advertise the mining pool in the appropriate subreddits if necessary, because it no longer matters to me if I'm banned again.
Second, the karma system itself is fatally flawed. Reddit attracts people who want to receive upvotes. I can look this up explicitly if necessary, but I think that my account had something like 10,000 karma. The recent "thoughts" posts were receiving about 20 karma per post. A two-paragraph post I put in /r/bitcoin criticizing PETA for reneging on their promise to move to P2Pool received 250 upvotes. If I actually cared about reddit to increase this meaningless number, it would be very efficient for me to post one-line comments, each of which is likely to get 5-10 upvotes, rather than to post long comments, which receive 20 or 30 upvotes but take 10 times longer to write. This is because people who read detailed content are generally wise to the karma game and gain pleasure from reading the content, so they don't vote. People who think that I care about things like "vote brigading" pay little attention to the content and look to the buttons on the left first. You end up with the most knowledgeable people (who recognize that karma is just a number) not voting, and the people who rarely contribute (and who therefore are less likely to be able to judge good content) voting much more often.
OpenBazaar set to change the world
Just like it took me a while to recognize the importance of bitcoins, it also took me a while to recognize the importance of OpenBazaar. OpenBazaar is a decentralized marketplace where anyone can sell anything, and all item information is permanently recorded across a huge network without the possibility of a takedown. The system has a set of arbitrators, which will make it possible to deal without needing a centralized authority like PayPal to mediate. OpenBazaar is not finished and has a while to go in development, but if the developers can get a product out, then every day I'm more convinced this is revolutionary. Unlike Ethereum itself, which has a large budget and spends its own product, OpenBazaar has committed itself to a no-profit model and has 9 volunteer developers. This is why it will be so successful.
Right now, eBay makes 12.9% or more in fees for every purchase. The fees are so excessive that Chris Sokolowski recently listed a $220 speaker system on Craigslist for $180, because he would still earn more on the system without eBay. However, the system did not sell, and I suspect that Craigslist is only useful if you live near a huge city where more people read the local boards. He'll have to list it again on eBay, losing money to them.
OpenBazaar is the type of technology that people never envision until it appears, and then afterward it seems like a logical progression. Bitcoin itself was one of these technologies, where nobody ever considered that money could be created by anyone else than governments. Up until now, the largest use case for bitcoins has always been thought to be the savings that merchants can obtain from it. By eliminating credit card fees, merchants could save 3% and therefore lower prices on bitcoin purchases by 3%.
But with OpenBazaar, a new type of shopping experience is likely to emerge. In the past, the model was moving towards enormous retailers. In the 80s, Sam Walton revolutionized the business by opening Wal-Mart and later Sams Club. People can go to Wal-Mart and buy everything, or go to Sams Club and buy a selection of things in huge quantities. The price of stuff was brought down by the purchasing power of being able to buy items in bulk from the manufacturers. There are studies that demonstrate when a Wal-Mart opens in a small town, the price of everything can often drop by several percent as competitors have to cut profits in order to stay alive.
The new model is to have anyone be able to sell anything. There is no need at all for eBay in a world where you can list stuff with zero fees - at all; their business model will simply cease to be viable entirely. At first, merchants might list stuff both on traditional channels and on OpenBazaar. But people will see that the same items on OpenBazaar are 15% cheaper and do a double-take. Since OpenBazaar will only accept bitcoins, that will lead to rapid price appreciation as people need to use their earnings to buy other stuff on OpenBazaar. More interestingly, there is also less need for Wal-Mart in this type of world, because it is so cheap that you and I will be able to undercut Wal-Mart with "like new" items that we got at Christmas or have lying around the house and have no use for. Combined with drone delivery, the only use for big box stores will be for product categories that people can try out before buying, like clothes. Soap or shampoo, for example, are items that have no benefit being sold in a store because people actually have less information available on them at the store than they would searching the Internet.
Whether or not OpenBazaar itself is the successful technology is irrelevant. If they can't manage the project effectively, then someone else will start a new project and produce a distributed marketplace a little bit later.
A global reputation system
A side effect of a system like OpenBazaar is the advent of a global reputation system. The single biggest problem in the world today is pretty simple: how can you distinguish the good guys from the bad guys? Most of the world we do every day revolves around eliminating people who do bad things. The sole purpose of insurance companies, for example, is largely to push paperwork that verifies that claims are accurate. As the Internet becomes indispensable, people spend a lot of their time online and this becomes more important with the threat of hackers. However, all the previous attempts at solving this problem involve a central party storing the reputation information. Getting back to reddit, they have a sort of reputation system in karma, but because the system is centralized, it has fatal flaws. First, administrators can overrule the reputation system and play around with karma or delete accounts. Second, karma isn't worth anything, so people have no incentive to care about their level of karma or to accurately grant others upvotes on the basis of good contributions.
But with OpenBazaar, a reputation system will develop that will make its way into other facets of life, should OpenBazaar see widespread usage. Unlike reddit karma, you can only vote on a seller or buyer when a transaction has actually occurred, so in order to make a vote, you need to spend money. Since money needs to be spent to obtain ratings, you can't just create a new account and start over with no problems. And you can prove that your account is associated with your identity using cryptography and key possession. Surely, free cell phone apps will develop, just like those that have developed on eBay, that make it easy to take a picture and list items, but these apps can now be easier because the entire payment process can be followed from start to finish without third parties. That allows people to gain or lose a reputation quite easily.
Consider the following: unless I'm buying drugs, I will be more likely to buy from someone who uses his real name in sales than a screen name. Showing I have nothing to hide is why I changed to posting using my real name here. This is the trend of the Internet, as you can see with sites like facebook and Google+. If OpenBazaar becomes the way to trade things, then everyone will have bought at least one or two things from there. And if people decide to suddenly change their accounts, their previous keys will be listed publicly in the bitcoin blockchain and such an act will be traceable.
While privacy advocates will abhor this outcome, it could transform everyday life towards a more honest society. Right now, people who have dates sometimes search the Internet for information on them, but that information often comes from unreliable sources because there is no cost to post a webpage. If I was going to go out with someone in this future, why wouldn't I search the most reliable source out there: one that cannot be altered by administrators, cannot be deleted, is agreed upon by society as a whole, and from which dummy profiles can't be created in a day at no cost? People don't act differently in their professional and personal lives; those who are dishonest in dealing with money are risky employees and the same problems aren't going to go away as husbands or wives.
