Irish company Cryptoauction is aiming to become the new eBay of bitcoin.
The company is due to launch on 30th November at the London Bitcoin Expo under the helmsmanship of entrepreneur Daryl Cusack.
He believes that, since the closure of Bitmit.net, the field is wide open for a new bitcoin-based auction marketplace.
Cusack is presenting a talk at the expo on decentralised corporate models “in order to achieve a people-not-profit corporate outlook”. He will explain how Cryptoauction’s trustless model fits in with concepts from game theory that incentivise trusting relationships between users without the need for third party mediation.
“There’s no way to eliminate bad actors entirely. The best we can do is mitigate the risk by incentivising trust amongst users. We employ an innovative mechanism to discourage improper use of the site whereby those with good reputations are rewarded financially and those with bad reputations are penalised.
We’re trying to create a system where the users create the best possible outcomes for themselves without the need for a trusted third party. When you take that variable out of the equation you end up with a purer vision of user to user interaction.”
Users will be able to post one listing a day for free, and can post subsequent listings for 2.9% + €0.10 each (capped at €95) – a measure designed to stop spammers from listing endless junk items. Each auction will last between one and 14 days.
Sellers, whose identities are always protected, can choose to hold a regular auction where the item can sell for any price, or they can opt for a fixed-price auction, with or without a ‘buy it now’ price. They also have the chance to choose which cryptocurrency they prefer to sell for, bitcoin, litecoin or primecoin, when they register.
“We’ll be moderating the items that are posted and do periodic reviews for inappropriate items, items in bad taste, illegal items and so on, so you won’t find drugs there,” Cusack stated.
To mitigate against a ‘bad actor’ not sending funds to the seller, Cryptoauction has integrated an automatic settlement feature, which Cusack says will resolve any disputes by “comparing the relative karma of each of the transactors”.
The aim is to judge buyers and sellers on their reputations in a user review system, effectively creating a ‘wall’ around good buyers and sellers, protecting them from those who are less reputable.
Cusack said building trust among a distributed network of users is a “chicken and egg situation”, but he hopes it will catch on as trust flows into the system organically.
“Users with high ratings will benefit when the escrowed funds are in dispute, as they’ll be awarded equally to users with an approval rating above 80%,” he explained.
According to Cusack, the company uses a dynamic system, so if a user’s reputation starts going down, their rewards will too. He explained:
“There’s a weighted review system over a fixed number of reviews that ensures, over time, good sellers will develop good reputations.
We also have a cancellation system where … once the funds are …read more