For over four years, OpenBazaar has been servicing the Bitcoin industry by providing a platform that allows users to buy and sell products using bitcoin, without a middleman.
While the platform is known by many in the Bitcoin space, OB1, the team behind the project, announced on September 25th that they intended on shutting down OpenBazaar's supporting services, namely the platform's seed nodes, API wallet, and exchange rate API, as soon as October 1st.
The issue, according to the announcement, was that because OpenBazaar ran on the premise of "zero platform" fees, the only revenue OB1 received from the project was donations in bitcoin and other cryptocurrencies, which were close to depletion.
"Unfortunately, we simply haven’t achieved the level of user growth and adoption required to build a sustainable business off serving OpenBazaar/Haven users. As a result, OB1 cannot sustain funding the ongoing infrastructure costs."
Two days after OB1 published the letter, it was revealed that an "anonymous donor has agreed to cover the costs" to run OpenBazaar and its infrastructure through to the end of 2020. The amount donated was not disclosed by the OB1 team.
Although OpenBazaar has dodged a bullet in the short term, the project still needs financial support from its users to last the next year. Internally, the company is looking to "lower costs and decentralize more of the infrastructure" to extend its financial runway as far as possible.
OB1 seeks to secure funding for OpenBazaar's "next phase [to] unlock explosive user adoption," but thus far, the team has been "unsuccessful" in those efforts due to "last-minute funding deals falling through."
OpenBazaar's ongoing dilemma highlights the gloomy reality that a wave of Bitcoin startups have had to shut down over the past year due to a variety of issues.
In late 2019, Bottle Pay, a service that had allowed users to tip bitcoin via the Lightning Network, shut down due to new anti-money laundering regulations enforced by the European Union.
Other companies that have shut down include Purse, which had previously allowed users to purchase items on Amazon with bitcoin, and BitSpark, a cryptocurrency remittance service based in Hong Kong.