Strategy & Risks
Strategy, Potential Risks and Liabilities
Disrupt and Distribute
Disrupt Ecommerce Auctions:
Sellers only have to give one (1) $BID "Bid Coin Utility Token) to activate a *room, and one (1) $BID to list an item (Can be physical service/contract), regardless of the item, service or contract value moved in the room.
Bidders only have to give one (1) $BID to enter an active room, thereby able to see it's listed items, and one (1) $BID for each actual "bid" they would like to submit to the item owner (Seller).
Distributed Business Logic:
Each vertical can virtually shape/custom tailor the Bid Coins DApp to fit their needs; each $BID holder, is able to submit code for review.
To both encourage community development as well as ensure development comes from those actually intending on using the system, any Stellar Lumens Wallet with 1,000,000 BIDS tokens or more, can commit code directly to the BidCoins.io DApp source code on Github.
We hope to pursue the designing of a mechanism (i.e. market) for the trade or exchange of physical goods, services and/or contracts (i.e. Government of Union Contracts) using blockchain infrastructure and Mobius's DApp store between person and person as well as person and smart contracts while feeding the activity with off-chain data from blockchain oracles.
This market is to be implemented using the Proof of Stake Oracle Protocol and the Blockchain Smart Markets Protocol given by Mobius to developers such as Bid Coin.
The following represent our strategy and goals:
● Incentivize authenticity via rewarding large stake holders with lower auction operations costs; further incentivzes intermediary distribution as well.
● All monetary transfers are settled in Mobius (for Phase I, then our planned $DIB, in Phase II, more of a currency class asset).
● Very easy to create and participate in auctionstransparent and easy to replicate.
● Facilitate an efficient exchange of information between oracles and smart contracts.
● Implement blockchain oracles communications architecture.
● Leverage Mobius's ability to have all data encrypted, added to the blockchain, with information exchanging between oracles and smart contracts via encrypted secret keys.
Design & Implementation:
User adds items, services or contracts and selects conditions according to predefined options, generating the auction smart contract. Data integrity, authenticity and validity requirements are part of the terms that govern the auction. This is made available by 'oracles', encrypted and added onto the blockchain; in BidCoins.io DApp, Users must give a small fee (a $BID Token) in order to attach oracle data, data which an Auctioneer or auction smart contract may have chosen as compulsory.
An auction Private and Public key is created; the Public key is declared and added to the blockchain. Users (Bidders) wanting to take part in the auction add data to the blockchain via oracles and encrypt it using the auctioneer’s public key (in this case, the auctioneer is the oracle). The winning Bidder is then provided with private keys to decrypt the data/receive ownership transfer after the auction ends.
Any and all transfers as part of the auction are settled in MOBI. In case the seller/auction sells multiple copies (i.e. a few rare comic books), then the data is encrypted with a public key and the private key is sold multiple times. Encryption keys are transferred to winning smart contracts after payment in MOBI. Smart contracts consume the data and have a fixed time to report any violations of terms, BidCoins.io DApp Users consumer their one-time-use $BID tokens up-front and oracles are paid after the expiry of the violation reporting time period.
Risks and Deterrents
Risks Within Auction Liability:
Distributive Application Favoured by the CJEU: In the case of L’Oréal v eBay, the High Court of England and Wales asked the CJEU if the use of trademarks in connection with offers for sale on eBay could ‘consist of or include the storage of information provided by a recipient of the service...(Cont.) It more specifically addressed the issue, asking:
"If the use does not consist exclusively of activities falling within the scope of article 14(1) ECD, but includes such activities, is the operator of the online marketplace exempted from liability to the extent that the use consists of such activities and if so may damages or other financial remedies be granted in respect of such use to the extent that it is not exempted from liability?"
This was a position also supported by Advocate General Jääskinen because ‘it is difficult to see that Directive 2000/31 would impose three distinct types of activity which would only be exempted if each of them is exercised in a watertight compartment’.
The CJEU proceeded with examining the liability of hosts, having acknowledged that eBay plays a number of roles: assisting sellers and advertising some of the products sold on the marketplace on search engines.
The Court also indicated that it was not disputed that the operator of an online marketplace is an advertiser when selecting keywords in the Google search engine and providing advertising links back to the eBay site,45 and moved on to analysing its liability as a host. This is an acknowledgement that eBay’s service is more complex than simple storage, and thus recognises the composite nature of the service. Because the Court proceeded with a dual analysis of eBay’s liability, as an advertiser and as a host, it is obvious that the CJEU supports a distributive application.
The liability of intermediary online auction sites is therefore a patchwork. For each role exercised, a different liability regime may apply, subject to national law. However, every time the online auction site acts as a host it can find a shield to liability under Article 14 ECD. To do so, it needs to satisfy the test defined by the CJEU and explored chronologically below..
Test/Exploration: Imposing a ‘neutrality’ test on hosts was somewhat surprising at the time it was first adopted in theGooglecase. But this position was reiterated by the CJEU inL’Oréal v eBay, confirming a restrictive interpretation of Article 14. Up to this point, Article 14 could be seen to require demonstration of the existence of ahosting activity and an absence of knowledge or awareness followed by prompt removal on gaining such knowledge or awareness to escape liability. In the wake of theGoogleandL’Oréal v eBaycases the protection of Article 14 can only be granted to hosting activities that are first and foremost ‘neutral’, before the other requirements under Article 14 can be applied.
Assessing Neutrality: Following in the footsteps of theGoogledecision, the CJEU inL’Oréal v eBaydecided that Article 14 ‘must be interpreted as applying to the operator of an online auction marketplace where that operator has not played an active role allowing to have knowledge or control of the data stored’. As a result, no protection under Article 14 can be granted if the intermediary played an active role. Activity is therefore the nemesis of neutrality. It is on the definition of such ‘active’ role that the legal protection applicable to online auction intermediaries turns. The CJEU left it to national courts to proceed with such interpretation. This presents important challenges because the notion of what is an active role (or a neutral one) is not defined by the ECD and only briefly sketched out by the CJEU. The section below details the way in which I understand the test to work, and how it ought to be applied to online auction platforms.
BidCoins.io Liability: If we follow the above to determine liability and then establish neutrality, we'll find BidCoins.io DApp would be completely free of any liability. Contrary to Google, L'Oréal or eBay, BidCoins.io is first and foremost, decentralized hosting and distributed storage; secondarily, BidCoins.io does NOT have custodial interest in the activity(ies) of the bidding forums. BidCoins.io is a distributed framework, more a "decentralized platform" which only works with one type of utility token, BIDS. BidCoins.io does not advertise it's content, sellers, users or their content; BidCoins.io does not profit from the sale/transfer of ownership of any item, service or contract which is transferred via BidCoins.io framework; and does not act as intermediary in any stage of the auction/bidding forum activities from activation through closing and/or awarding.
Deterrents Beyond Liabilty
Each version of phone hardware and software (operating systems) comes along with the likelyhood of required/compulsory updates from the BidCoins.io internal team and/or community. As technology marches, or rather, sprints forward, we'll carry internally the task of ensuring compatibility with the devices having the most wide-spread usage at the least.
Additionally, as blockchain technology itself also advances, including the rapidly advancing Stellar.org Blockchain we live upon, we'll need to both be vigilant in research as well as development so that we're ensuring the optimal levels of both security and usability for our BidCoins.io adopters.
Costs maintain compatibility with an ever growing stack of devices and communications protocols, new types of data and data coming in new types of ways, will all continue to demand our developers staff to increase.