Civ Kit, the Nostr marketplace created by Bitcoin developers

Nicholas Gregory, Ray Youssef and Antoine Riard have proposed a new “peer-to-peer electronic market system” on Nostr, the Bitcoin-friendly social networking protocol. Their introductory whitepaper describes a censorship-resistant system that uses Nostr for its order book and the Bitcoin blockchain for contracts and record-keeping.

The whitepaper’s notable authors call their new market proposition Civ Kit. They describe the new market as an enabler of global trade in goods, services and foreign exchange (FX). In particular, they suggest a way to sell goods or services through the following method.

Civ Kit: Step-by-step

1. A seller lists their item for sale via a bulletin board (a Nostr server connected to a Bitcoin Lightning Network onion gateway).
2. The message board publishes the entry to all its Nostr followers.
3. A willing buyer examines the listing and submits a hashed timelock contract (HTLC) via the Bitcoin Lightning Network that supports Civ Kit’s escrow contract.
4. The seller delivers the goods or services and requests funds from escrow. The buyer releases deposited funds.

Civ Kit leverages Nostr’s reputation-based public keys. Within Nostr, content creators have a persistent public key that allows permission-free porting of followers across all social media applications that support Nostr public keys. Civ Kit Marketplace participants have a financial incentive to build and maintain a positive reputation in the same way that eBay users have a financial incentive to maintain a positive reputation.

Jack Dorsey financed some of the earliest developments of Nostr. His endorsement gave the protocol and its most popular social networking app, Damus, instant popularity among Bitcoiners. Although not using Bitcoin’s blockchain, the protocol was loved by Bitcoiners through its censorship resistance, Bitcoin-like nodes and public/private key cryptography, and early support for Bitcoin and Lightning Network payments.

Read more: What is Nostr and why Bitcoiners love it?

Like Silk Road or OpenBazaar, but better

Of course, there have been many peer-to-peer electronic markets in Bitcoin’s history, including OpenBazaar and Silk Road. This latest white paper by Gregory, Youssef and Riard cites prohibitively high barriers to entry in global marketplaces today, lack of access to dispute resolution systems and a design that effectively shuts out large parts of the world’s population. The white paper also cited centralized parties controlling reputation/rating systems, as well as fiat on/off ramps with limited transparency.

Civ Kit’s innovations unlock a new combination of Bitcoin, Nostr and blockchain contracts.

• Civ Kit promises reduced centralized control from parties with a vested interest in censoring content, including products and services sold on the marketplace.
• Cryptographically secured Bitcoin Script contracts will provide escrow services and execute automatically when certain conditions are met.
• Civ Kit promises to reduce the upfront costs of entering the market.
• The marketplace uses technology to reduce the costs of middlemen.
• ‘Infrastructure-as-a-service’ protocols will provide incentives for nodes to enforce accurate, transparent operations.
• Civ Kit promises to reduce discrimination based on location, types of trade or trade flows.

Decentralized markets are not new

Previous attempts to create a decentralized marketplace include Silk Road and OpenBazaar. Developers created OpenBazaar in 2014 as part of a hackathon. They originally called it DarkMarket, then abandoned the concept. Another team of developers picked up the prototype and changed it to OpenBazaar in an attempt to distance it from failed darknet marketplaces like Silk Road.

OpenBazaar ceased operations in 2020 due to lack of funding. However, new news indicates that it may be relaunched as version 3.0. In fact, the Twitter account appears to be back online.

Even an early Bitcoin-related code indicates that Satoshi Nakamoto considered including a marketplace in the early “peer-to-peer digital cash system.” Nakamoto told Mike Hearn about working on an eBay-like marketplace before he disappeared in 2011. Interestingly, an anonymous team of developers completed that project and launched it as Particl.

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