Bitcoin Marketplace OpenBazaar Narrowly Escapes Bankruptcy Thanks to Donations
A single donation has provided OpenBazaar with three months of funding.
Key Takeaways
- OpenBazaar recently announced plans to shut down its cryptocurrency-based, decentralized marketplace.
- However, it has secured enough funding to operate until 2021.
- The company is still seeking donations.
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Bitcoin marketplace OpenBazaar has secured a donation that will allow it to continue operating for one year, following an announcement that it had run out of funding.
BREAKING NEWS!
An anonymous donor has agreed to cover the costs to run OpenBazaar infrastructure through at least the end of the year. pic.twitter.com/VwSz9g27sa
— OpenBazaar (@openbazaar) September 27, 2020
OpenBazaar Runs Out of Funding
OpenBazaar is a decentralized Amazon competitor that allows individuals to buy and sell goods using Bitcoin and other cryptocurrencies. It was founded in 2014 and was once considered a highly promising Bitcoin application.
It ultimately failed to attract users in sufficient amounts, however.
The project’s parent company (OB1) attempted to shift its focus to a mobile marketplace app called Haven in 2019, but that app has failed to gain users as well.
“Unfortunately, we simply haven’t achieved the level of user growth and adoption required to build a sustainable business off serving OpenBazaar/Haven users,” OB1 wrote on Sept. 25.
However, the company has been saved from bankruptcy with a single donation, as revealed today on Twitter.
$12,000 Has Been Raised
OB1 did not reveal the size of the donation. However, based on block explorer records, it has received about $12,000 worth of cryptocurrency over the past two months. Donated coins include Bitcoin, Ethereum, Bitcoin Cash, Zcash, and Litecoin.
Though OB1 has raised enough to cover costs for the next three months, it is still asking for donations from the crypto community: “2021 will come soon enough. Please consider donating so that we can continue supporting free trade,” the company reported.
Statistics suggest that OpenBazaar handles around $6,000 in sales per month. The fees from those sales are presumably not enough to fund the developers and node operators that support the platform.
It is not clear whether OpenBazaar will survive beyond 2021.
OB1 believes that “the next phase of the protocol” will “unlock explosive user adoption.” Meanwhile, critics argue that the company should not seek funding for a service that users are not actually interested in.
The project also faces competition from other decentralized marketplaces such as Particl and Origin Protocol, as well as darknet marketplaces that accept Bitcoin and other cryptocurrencies.
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