While I am not the author, I have worked with his framework since he released the first version a couple of months ago. I therefore feel qualified to answer some of the questions.
1) I don't understand why there is a need to encrypt data and send it over the Bitcoin blockchain, it will be there forever and if someone can decrypt it then everyone will know what you bought, and since we are talking about peer-to-peer networks it is better to destroy everything after the trade is finished.
2) You did not mention how to deal with scammers, will the service provide an escrow? And if so, what will escrow be? Or will it rely on trust points?
We must understand that his software is not a single market but a "repository of markets" where users can open their own market with their own rules.
There is an inbuilt reputation system that is fee based. In addition, a market owner can freely set his own fee as a percentage of the listing price. The market owner sets the rules and can use e.g. 50% or more of the listing price as an escrow value that is returned if the customer has no complaints. There are no limits to creativity.
But what if the seller or buyer wants to return the transaction data due to a dispute? This will be impossible if the data is destroyed.
This is where you would turn to a BaS (blockchain as a service) solution to protect/validate the data like the bitcoin network does.
If Bitcoin is going to survive long term, we need to
eliminate garbage data on the blockchain. I define garbage data as not useful to the majority of network participants. Your example above would include that.
Customer data can be RSA 4098 encrypted and sent over the chain. This is optional however and most users of his protocol use off chain methods (e.g. Telegram or a website) to transfer this customer data. The more valuable part, the listings, market configurations etc., are OP_RETURN encoded but are very small (and can therefore also be pruned by Bitcoin software). From all transaction outputs in his protocol, only a small amount is OP_Return data.
However, the bigger problem is BlockAze is currently a cesspit of drugs, guns and violence. Clear web websites that used be hidden in the dark net use it to immortalize their presence.
But is it a problem of human nature itself if given unlimited freedom? It is unregulated and obeys the same rules as Bitcoin. Should we regulate Bitcoin as well if used for such purposes? It is a really hard question and I understand OPs fear.
