Will Cryptoauction Become the 'New eBay of Bitcoin'?

Nov 22, 2013 at 10:41 a.m. UTCUpdated Nov 24, 2013 at 4:14 p.m. UTC. Irish company Cryptoauction is aiming to become the new eBay of bitcoin.

Sellers, whose identities are always protected, can choose to hold a regular auction where the item can sell for any price, or they can opt for a fixed-price auction, with or without a 'buy it now' price.

To mitigate against a 'bad actor' not sending funds to the seller, Cryptoauction has integrated an automatic settlement feature, which Cusack says will resolve any disputes by "Comparing the relative karma of each of the transactors".

The aim is to judge buyers and sellers on their reputations in a user review system, effectively creating a 'wall' around good buyers and sellers, protecting them from those who are less reputable.

Cusack said building trust among a distributed network of users is a "Chicken and egg situation", but he hopes it will catch on as trust flows into the system organically.

"Users with high ratings will benefit when the escrowed funds are in dispute, as they'll be awarded equally to users with an approval rating above 80%," he explained.

According to Cusack, the company uses a dynamic system, so if a user's reputation starts going down, their rewards will too.

Cryptoauction has registered multiple domain names in different locales around the world to cater to different national markets, and, if the idea takes off, it will push out in new directions.

Cryptoauction has also tried to minimise the amount of time each user's funds are held, he explained.

"We use cloud flare to avoid going offline during a DDoS, and we're registered in Ireland, under the Business Names Act, as an Irish company and under Irish law, and we intend to work with the Bitcoin Foundation and DATA to ensure that we meet best practices for handling cryptocurrency," Cusack added.