Decentralized: Interview with The CEO of Newly Launched P2P Trading Platform Bitalo

02.02.2016

While the community is waiting for release of long-expected decentralized trading platform OpenBazaar, Bitalo has already launched its own decentralized marketplace Bitalo Market.

The service is distinctive mainly because everyone may start using the platform right away. Another important difference is that Bitalo operates via web interface, so a user doesn’t have to download anything to start buying or selling stuff for bitcoins. Bitalo is also complete with a warranty system protecting customers from possible scam on the counterparty side.

Currently, the platform services several artists selling their paintings, sellers of handmade fireworks from Ghana, and Trezor, a well-known wallet company.

Martin Albert, CEO of Bitalo AG

ForkLog talked with Martin Albert, the platform’s founder, about Bitalo’s work.

FL: Could you explain the technical nuances of the platform’s escrow? Is it a completely decentralized system?
MA: Bitalo is a semi-decentralized system, that might be hard to understand. The website is a centralized access point, but the bitcoins are stored decentralized in user-side encrypted multi-signature wallets with backup transactions. These coins can under no circumstances be accessed by the site administrators and you can get out of the website, even when the site is completely offline. So you do not depend on Bitalo. Bitalo only comes into play when coins are hold in escrow. For the escrow we use 2 out of 3 multi-signature escrow addresses whereas buyer and seller get one key each and the third key is hold by Bitalo. This means that Bitalo can never access the bitcoins ever, unless either buyer or seller agree together with Bitalo that there was a scam case. This method is super simple and secure.

FL: What if a customer doesn’t want to use your escrow service?
MA: If you do not trust Bitalo at all, you can also trade directly with the person via an external escrow agent and just use our free listing functionalities and encrypted chat functionalities to find customers.

FL: Imagine there’s a malicious operator on Bitalo side – could he or she possibly steal the funds?
MA: There is no realistic scenario under which Bitalo could steal funds, unless the website code is changed. We have sophisticated intrusion detection systems that shut down the websevers automatically when the code is changed. For the future we want to finalize the code and then use a checksum method to prove that the code works correctly and as described

FL: What about regulation? It is a burning issue for bitcoin community these days. How a deal between a Czech-based merchant and a Russia-based customer would look in legal terms?
MA: We cannot comment much on regulatory issues, because these are far too different in different countries. But in my opinion selling and shipping products privately is allowed everywhere in the world. Bitalo has the huge advantage that users trade directly to each other. This means that even under severe scenarios like when, for example, Russia plans to make Bitcoin to FIAT exchanges illegal, it is irrelevant, because products are traded directly for Bitcoin. We advocate the use of Bitcoin as private currency that allows to trade between parties directly.

FL: What about various local regulation requirements?
MA: We will not enforce any local regulations in behalf of foreign governments, unless our users get scammed and need our support. Also, we allow anonymous accounts and will not hand out user information. Bitcoins at Bitalo are anyway encrypted and cannot be frozen or seized and our chat is user-side encrypted so that Bitalo administrators can not access it.

Decentralized trading platforms where users may sell their goods for bitcoins is a well-known and extensively-discussed trend of the cryptoindustry. The discussion around OpenBazaar has been continuing for around a year. However, the platform is still under development and prepares for a release in beta.

Traditional trading pltaforms like eBay are also becoming increasingly interested in cryptotechnologies. November 2015, eBay filed two patent applications to the United States Patent and Trademark Office, titled “Distributed Crypto Currency Reputation System” and “Distributed Crypto Currency Unauthorized Transfer Monitoring System”.
Distributed counterparts of eBay, Amazon and Taobao have their own advantages over theor rivals, including:
– setting more loyal fees for sellers and buyers (or have no fees whatsoever);
– minimum red-tape procedures and simple payment tools, like bitcoin;
– storage of minimum required personal data of users, which minimizes data theft risks; and
– greater flexibility and scalability

However, only time can tell how decentralized markets would develop in the future, and whether the general public becomes interested in this kind of platforms.

During recent Bitcoin Incredible Party conference, recently held in Ukrainian city of Lviv, Martin talked about the role of Bitcoin as a payment method vs. Bitcoin as a currency.

Here’s the video graciously presented by Distributed Lab:

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Tags: Bitalo, exchanges