When selling goods or services, you might want to consider using an auction format to maximize your profits and customer satisfaction. For those of us that don't know, selling through auction is the way where the price of the item is determined by the bids of the buyers, rather than by the seller. It's an interesting approach when trying to attract more buyers and generate more exposure. It can generate a buzz around your item and business, drawing attention from potential buyers who might not otherwise be interested, with any healthier word-of-mouth marketing and social media sharing.

Lately I've been reserching on this topic, thinking on how it could be implemented here on SN. Exploring other forums with more and fewer functionalities, have noticed that some really dive in with years of experience, trust build systems and the ability to offer this service with honesty and confidence. It's curious to see how all this started back in Babylon around 500 B.C., with brides as earliest known auctions “items” sold to grooms through descending bids. I'll leave you to research and discover why. Hopefully, ~AGORA auctions will be less problematic!

Firstly, I want to give you some history about “remote” auctions and how they have been evolving together with technological innovations. When TV and telephones were widely adopted in the west early in the late 80s, Nigel Myers, Director for Cox Automotive, describes the shifting mindset towards technology as: “a time when people were really beginning to grasp what technology could do and that traditional ways of working were going to be challenged. We adopted the view that we must embrace these emerging technologies before our competitors. We considered it essential to remain at the forefront of the industry.”

AuctionVision in 1991 was the industry’s first successful intent into “virtual auctions”, it offered the ability to buy and sell vehicles remotely for the very first time via satellite television. It revolutionized the industry that had remained largely the same for decades and provided the foundations for what we know as online auctions today. Anyone familiar with the telethon events that were popular in the 80s and 90s can picture the scene¹.

These auctions eventually moved and take more and more place through text-based groups and discussion lists. Yes, those times when cool UIs were not a thing, and one had to connect through the telephone line. Despite the technological challenges, such trades witnessed a huge popularity in those days and seeing the flourishing success of online trading, entrepreneurs began to realize the tremendous potential of online auctions. They understood the global reach online auction markets could have.

Ebay's AuctionWeb.com website launch in 1996

It was in 1995 that the first simple online auction website was made available by Pierre Omidyar, In September 1997, the portal was officially renamed from AuctionWeb.com to eBay.com.² Being the first such venture in the market, eBay had many advantages, which they utilized fully quickly becaming the biggest player in this industry. They have maintained their reputation till today, however, various websites soon came up and emerged as strong competitors to eBay. The leading competitors were Yahoo! Auctions and Amazon.com. Today we see an explosion of auction' website that cover specific markets, from cars to RE, art, clothes, snickers, Pokémon's cards , NFTs and who know how many more.

Together with technological evolution, auctions have been adapting and evolving to market request satisfying specific needs. Let's break down the various types of auctions formats to evaluate which one could be better suited for the AGORA marketplace.

Running with ascending bids, this is the most known and adopted worldwide. An initial value is usually defined by the auctioneer as a starting bid, meaning no less than that amount will be accepted. Bidders openly compete by raising the price with bids until the highest bid wins.

It's one of the oldest formats, dating back to ancient Rome (literally called auctus), where soldiers auctioned war loot. Modern English auctions quickly evolved in 17th-century England for antiques and art: the Mona Lisa was almost sold in 1959 but was withdrawn when bidding stalled at $5 million (a fraction of its value today).

I see this as a perfect match for our case, as it's the easiest to run manually, bids could be simply public comments for the auctioneer to easily track progress and evaluate the winner. It could be left open until no one else set more bids, or ending on a defied time set as deadline.

It is not a case, it runs with descending bids. Named as Dutch auction because it was firstly adopted in 17th-cetury's Holland to sell big quantities of perishable items like tulip bulbs (yes, that tulip mania), that if not sold quickly would end up being unsellable. The auctioneer, in this case, sets an intentionally high initial price, bids value were publicly dropped until a buyer screamed “Mij!” (Mine! in English) to confirm interest and stop the auctioneer lowering the price more to have more bidders interested.

Today, tech helps with that: digital clocks sync with global logistics. Flowers bought by 10 AM are shipped by noon and sold in NYC by the next day. The Aalsmeer complex is 1.6 million m² (≈200 soccer fields)³. Forklifts zip through 100+ km of corridors, selling over 12 billion flowers a year. Nearly 80% of global flowers, with some lots dropping from €10 to €0.50 in minutes when bidders sense oversupply. They are also called Clock Auction, as the price drops by the second. Bidders just need to simply press a button and get the item.

Auction board from the Aalsmeer in Holland

This would be a bit harder to run here, as it would be the auctioneer making lower and lower offers in the in comments. Bidders stay unnotably silent until interested. But the Auctioner couls also be the only spectator... Fun Fact: Google’s 2004 IPO tried a Dutch auction to “democratize” share pricing, it was probably more a sealed-bid auction, but anyway, some say it wasn't a success.

First higher price win: due to this nature, it's probably obvious, it was popularized by governments, specifically for procurement contracts. For example, the U.S. Treasury Inc. has used it since the 1800s to sell bonds to bidders that privately submit offers.

The auctioneer reserve the right to close receiving offers at a certain time, or when enough offers have been received to be able to select the highest(s) or the most interesting one(s). As you can understand, bidders often suffer the winner’s curse, most of the time ending up overpaying due to the secrecy detail.

We cannot sto auctionees from posting these, but from a bidder or buyer perspective, I'd advise avoiding the participation on this format on SN. It is much riskier for the bidder and definitely doesn't much our value of transparency. Just mentioning as it is part of my research.

Similar to the Sealed-bid auction, with the only difference that the winner pays the second-highest bid, for example, if you bid 0.05 BTC, and next highest is 0.04 BTC, you win the auction, but you pay 0.04 BTC. This approach, born as improvement of the previous one, incentivize to bid the true max value without penalty for honesty.

Named after William Vickrey, a Nobel-winning economist who designed it in 1961 to incentivize a more truthful bidding format. A practical example are the Government (again) Spectrum Sales, where FCC uses Vickrey-inspired formats to allocate radio frequencies more fairly and try to avoid bid inflation. Good fit for stackers? Definitely not!

Along the centuries, auctions have evolved. Those mentioned above are the most common and adopted. Other really specific formats have been designed to fit specific markets or occasions. For example, Silent Auctions are an English Auction's variation, with the only difference that bids are anonymously offered in writing. Mostly used for fundraising and Ads placements, where the bidders prefer to keep certain levels of privacy.

Penny (or Incremental) Auction is one where participants pay (historically was just 1 penny to join in, from here the name of the format) to place bids. The timer resets with each bid. Highly risky when applied to online auctions because bidders need to pay for participating. I'll avoid mentioning controversies and scams in history related to this format. Just note down that, to participate, you must really know and have full trust in the auctioneer or the people selling the items.

Reserve Auction is where the seller or auctioneer sets a hidden minimum price; if unmet, the item will remain unsold. This could fit here: an auctioneer maybe just need to clearly state “Reserve Met” or “Reserve NOT met” publicly to close the auction, without the need to publicly disclose it in the initial post.

Here a simpler table comparison with evaluation criteria for possible SN'~AGORA implementation

Notes: 
- *No-Reserve: High fraud risk if starting bid is too low.  
- †Reserve: Transparency is higher if the reserve is disclosed upfront.  
- ‡Dutch: Requires strict timekeeping.  

The challenge to run and monitor auctions on SN still unsolved, at least for me. Considering there's not yet a publicly available rating to identify users' trust within the community, nor a private messaging or escrow service, I'll try my best to find the right matches and offer few options to inspire stackers.

With further research, and I'll put together a draft guide to see what you all think about it. Ideally, receive feedback and together make this happening, fostering a more free and open market incentivizing a wider bitcoin circular economy.

Thanks for reading until here, hope you find it entertaining. I'll leave you with an ending fun fact: In the 1800s, cattle auctions in Dodge City in Kansas used English-style bids, with cowboys literally shouting offers. Deals were sealed with a handshake and whiskey!