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>When I buy something through a respectable platform I like the guarantees provided by the 3rd party in case something goes wrong. It's actually a feature for m

>When I buy something through a respectable platform I like the guarantees provided by the 3rd party in case something goes wrong. It's actually a feature for me, not a drawback. Isn't the guarantee already baked into smart contracts and escrow-like functionality? I mean that the deal, or money transfer only happens if both parties agree, e.g. you greenlighting the transaction after receiving and inspecting the good.

jstanley 9y ago
It's not possible to do this trustlessly. What if the seller doesn't post the goods? What if the seller does post the goods but I say he didn't? How can the smart contract distinguish those two cases?
- SXX 9y ago
  > It's not possible to do this trustlessly. It is possible as long as smart contract backed by money from both parties. Customer buy item for $5, but both seller and customer additionally put $10 each into contact and these money remain locked until both parties confirm that everything is fine. Once confirmed seller get his $5 and customer already have his goods, $10 become available for both parties again. This scheme worked on other online payment systems even decade ago and require zero trust. PS: This obviously just an example and not how it work on OpenBazaar and there is detailed post from developers in comments.
  - jstanley 9y ago
    That's a good idea, although obviously impractical for larger purchases.
    - dmos62 9y ago
      Look at how bisq does it. Trustless, private transactions of relatively large sums, with escrow and arbiter resolved disputes. Bisq is the best crypto-fiat exchange system if it's ok for the transaction to take a couple of days.
      - simias 9y ago
        For large transactions you have to put a lot of faith into the arbiter. What if they're not being impartial? What if they're corrupted? Eventually you want an arbiter that's "big enough" not to have an incentive to cheat you for any mundane transaction, like a bank or a huge company like Amazon. They're always available, mostly consistent with their rulings and can guarantee a huge amount of transactions at once without bottlenecks. I know that Amazon has no incentive to screw me over a $2000 purchase. Also since they generally have a history of transactions for both seller and buyer they can more easily identify fraud. The more information the arbiter has the more likely they are to rule correctly. Suppose that a Canadian buys a DVD from a German, some Chinese guy is elected by the system as arbiter. The Canadian guy claims he hasn't received the DVD. What does the arbiter do? Book a ticket for Canada to check it out? Ask the German to send him the DVD first so that he can forward it? What if the chinese guy steals it and claims he's forwarded it then? Here's how Bisq does it[1]: >Arbitrator follows a protocol to request additional information from both parties and renders his decision based on acquired evidence. Well that's very nice, how do you prove that you haven't received anything? What if you've received something but it's broken? Or not the thing you wanted? It seems so easy to game the system. I have a hard time believing that distributed arbitration system like the one you're talking about could beat the speed, scale and efficiency of our current infrastructure. Maybe for certain niches it would could work though, for a cryptocurrency it might make sense to avoid centralization and a single point of failure. [1] https://github.com/bisq-network/docs/blob/master/exchange/whitepaper.adoc#standard-exchange-process https://github.com/bisq-network/docs/blob/master/exchange/wh...
        dmos62 9y ago
        A bit of a late reply, but in case of bank transfers proof of transaction is actually an interesting topic. You use PageSigner[0] to make a cryptographically secure webpage screenshot of your bank statement. I'm still a bit confused about how TLSNotary (underlying technology) works, but apparently it does. [0] https://tlsnotary.org/pagesigner.html https://tlsnotary.org/pagesigner.html
- deleted 9y ago
  [deleted]
- deltron3030 9y ago
  Why would you give your Ok to the transaction if your transaction partner doesn't deliver? The smart contract just holds back the money, and pays the seller after your Ok. If you e.g. receive a broken product, you'd return it to the seller, and then wait for the seller to give his Ok. I haven't looked into OB and how it works over there, this is just my mental model of how smart contract might work in commerce. A transaction needs the Ok from two parties for it to happen.
  - jstanley 9y ago
    And if you do receive it, but you lie and say you didn't receive it? How does the smart contract know you're lying and not the seller?
    - deltron3030 9y ago
      It wouldn't be much different from how it's handled in traditional ecommerce. If there's a legal dispute, or something "disappears", the're ways to find out where it went missing, you could go to court. You're still using package services for physical goods. The money would be held back until both give the Ok and the dispute is resolved.
- simias 9y ago
  More specifically it's possible for digital goods since you can effectively do the entire exchange "on chain" so to speak, therefore letting the algorithm decide if the conditions have been met. But like everything else blockchain it breaks down heavily as soon as the physical world is involved because the blockchain has no practical way to reach an objective trustless consensus on the state of meatspace.

jstanley 9y ago

It's not possible to do this trustlessly. What if the seller doesn't post the goods? What if the seller does post the goods but I say he didn't? How can the smart contract distinguish those two cases?

SXX 9y ago
> It's not possible to do this trustlessly. It is possible as long as smart contract backed by money from both parties. Customer buy item for $5, but both seller and customer additionally put $10 each into contact and these money remain locked until both parties confirm that everything is fine. Once confirmed seller get his $5 and customer already have his goods, $10 become available for both parties again. This scheme worked on other online payment systems even decade ago and require zero trust. PS: This obviously just an example and not how it work on OpenBazaar and there is detailed post from developers in comments.
- jstanley 9y ago
  That's a good idea, although obviously impractical for larger purchases.
  - dmos62 9y ago
    Look at how bisq does it. Trustless, private transactions of relatively large sums, with escrow and arbiter resolved disputes. Bisq is the best crypto-fiat exchange system if it's ok for the transaction to take a couple of days.
    - simias 9y ago
      For large transactions you have to put a lot of faith into the arbiter. What if they're not being impartial? What if they're corrupted? Eventually you want an arbiter that's "big enough" not to have an incentive to cheat you for any mundane transaction, like a bank or a huge company like Amazon. They're always available, mostly consistent with their rulings and can guarantee a huge amount of transactions at once without bottlenecks. I know that Amazon has no incentive to screw me over a $2000 purchase. Also since they generally have a history of transactions for both seller and buyer they can more easily identify fraud. The more information the arbiter has the more likely they are to rule correctly. Suppose that a Canadian buys a DVD from a German, some Chinese guy is elected by the system as arbiter. The Canadian guy claims he hasn't received the DVD. What does the arbiter do? Book a ticket for Canada to check it out? Ask the German to send him the DVD first so that he can forward it? What if the chinese guy steals it and claims he's forwarded it then? Here's how Bisq does it[1]: >Arbitrator follows a protocol to request additional information from both parties and renders his decision based on acquired evidence. Well that's very nice, how do you prove that you haven't received anything? What if you've received something but it's broken? Or not the thing you wanted? It seems so easy to game the system. I have a hard time believing that distributed arbitration system like the one you're talking about could beat the speed, scale and efficiency of our current infrastructure. Maybe for certain niches it would could work though, for a cryptocurrency it might make sense to avoid centralization and a single point of failure. [1] https://github.com/bisq-network/docs/blob/master/exchange/whitepaper.adoc#standard-exchange-process https://github.com/bisq-network/docs/blob/master/exchange/wh...
      - dmos62 9y ago
        A bit of a late reply, but in case of bank transfers proof of transaction is actually an interesting topic. You use PageSigner[0] to make a cryptographically secure webpage screenshot of your bank statement. I'm still a bit confused about how TLSNotary (underlying technology) works, but apparently it does. [0] https://tlsnotary.org/pagesigner.html https://tlsnotary.org/pagesigner.html
deleted 9y ago
[deleted]
deltron3030 9y ago
Why would you give your Ok to the transaction if your transaction partner doesn't deliver? The smart contract just holds back the money, and pays the seller after your Ok. If you e.g. receive a broken product, you'd return it to the seller, and then wait for the seller to give his Ok. I haven't looked into OB and how it works over there, this is just my mental model of how smart contract might work in commerce. A transaction needs the Ok from two parties for it to happen.
- jstanley 9y ago
  And if you do receive it, but you lie and say you didn't receive it? How does the smart contract know you're lying and not the seller?
  - deltron3030 9y ago
    It wouldn't be much different from how it's handled in traditional ecommerce. If there's a legal dispute, or something "disappears", the're ways to find out where it went missing, you could go to court. You're still using package services for physical goods. The money would be held back until both give the Ok and the dispute is resolved.
simias 9y ago
More specifically it's possible for digital goods since you can effectively do the entire exchange "on chain" so to speak, therefore letting the algorithm decide if the conditions have been met. But like everything else blockchain it breaks down heavily as soon as the physical world is involved because the blockchain has no practical way to reach an objective trustless consensus on the state of meatspace.