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There is no way of having charges "deducted from your account" with Bitcoin so there's no need for dispute or chargebacks. The way cyrptocurrencies work, in or

There is no way of having charges "deducted from your account" with Bitcoin so there's no need for dispute or chargebacks. The way cyrptocurrencies work, in order for there to be an interface that allows third parties from charging your account, you would need a smart-contract for counterfactual transactions instatiation. Right now, I can't think of a "problem" that would require chargeback or dispute resolution and couldn't be solved this way.

hoffs 8y ago
You buy a good online from a seller, seller doesn't ship the item and refuses to pay back. What then? With credit cards you can go to the bank and demand chargeback or whatever.
- decentralised 8y ago
  Do you buy the good directly from the seller? If so, and if you believe the seller isn't trustworthy, I'd recommend the use of a smart-contract that only releases the coins if both parties sign a message.
  - ss248 8y ago
    But how would you protect the seller from the "evil buyer"? The one who receives the goods, but never releases the lock? Sure, he is not getting his money back, but the seller is not getting that money also.
    - decentralised 8y ago
      The buyer has to pay to make the order, that's usually the case in most e-commerce transactions I can think of. If the evil buyer convinces the naive seller to ship products without a payment being executed or a smart-contract based bond, then the situation is exactly the same with or without cryptocurrencies.... the seller must report the buyer to the police and either hire a collection agency or take some other action to recover the goods. edit: on a second look, I think I misread your comment... are you asking about the mechanics of conterfactual transactions? If so, the idea is that the contract is entered with the buyer signing a transaction with some form of conditional operation. One the seller ships the product, the shipping code could very well be the condition that allows releasing the funds. There's plenty to talk about here around game theory and mechanism design, but if you are interested in the topic I can recommend some cool state-channel and plasma contracts we can go over and discuss.
      - ss248 8y ago
        >The buyer has to pay to make the order You mean like another lock? But what is stopping the seller from holding buyer's money hostage and force him to release the lock just to get some money back even when he did not receive the goods? An example of evil buyer would be something like: 1. The buyer buys goods from seller with smart-contract 2. The money in buyer's wallet gets locked. 3. The seller ships the goods. 4. The buyer receives the goods, but never signs the smart-contract. That way the buyer gets what he paid for, but the seller never receives the money. No matter how i think about it, smart-contract idea looks abusable.
        decentralised 8y ago
        How about this: 1) the contract is initiated by the seller (sets amount, payable accounts, etc) 2) the contract is signed by the buyer, moving (or locking) an amount of money in the contract pending one of two situations: 2.1) the seller signs a message that the product has been shipped and the buyer signs a message the product has been received 2.2) the seller signs a message that the product has been shipped and after 30 days of no further message from the buyer's side the contract releases the funds In this case, the solution is to have a commitment from the buyer that unless they take action (sign a special message to denounce the transaction / pull out of the contract) the seller gets paid. To address the scenario where the seller is malicious, the buyer can use the on-chain commitments from both parties as evidence of malpractice and report the situation. (edit: formatting)
        siquick 8y ago
        Isn't this very similar to what Escrow does?
        deleted 8y ago
        [deleted]
        jakelazaroff 8y ago
        Your caveat still renders the system vulnerable to malicious buyers. What if the buyer receives the product but "takes action" by denouncing the transaction or exiting the contract?
- ss248 8y ago
  Banks are not really necessary. Even by basic game theory, scamming your customers has long term negative value. Reputation is worth much more than money. We just have to design systems around it.
  - mantas 8y ago
    But someone has to take the gamble. Or everybody uses only established reputable sellers. And newcomers can't break into the market. Customer protection is great to give small businesses a chance.
    - ss248 8y ago
      Basic solution would be for seller with low reputation to lower the price. Even if not a lot of buyers take the risk, lower price should eventually attract enough people to allow a legitimate seller to build the reputation.
      - mantas 8y ago
        People already don't trust too low prices, because that's a sign of a scammer. And margins are already rather low. Would you take a gamble save €10 or loose €1000? Even with all the customers' protection in place, I already rather pay 1-2% more if that means buying for a more reputable seller. Without the protection, they'd have to be in scammers' price range to be considered... In many cases the entrenched players in the market already have good prices. Upstarts who can't use economy-of-scale try to make their way by providing superb customer service or providing a better service in another way. But it's hard to give it a try when you don't have the protection of chargeback.
        ss248 8y ago
        Well, it's hard to compete in the already established markets. But you have to, one way or another, usually by providing better value. Be it lower price, faster delivery or higher quality products. Otherwise, if there is no initiative for people to use your services, are you really necessary?
- mrhappyunhappy 8y ago
  Blockchain based reputation system. Buy only from reputable sellers. First time seller, you just have to test your luck with those.
- deepnet 8y ago
  Yes and there is a converse problem, the seller ships the item but the customer having received the item fraudulently requests chargeback - this is common, sadly. I lose the item, the money and a fee - bitcoin, like cash solves the fraudulent chargeback problem - but the buyer is unprotected. Trusted Escrow solves both problems. The chargeback system isn't good for small retailers. The banks have no incentive to check the system or secure the card as the onus is on the merchant.
  - mikeash 8y ago
    The chargeback system is the only reason I’m willing to patronize small retailers at all in many circumstances. If it were really a net negative for them, they wouldn’t accept cards at all.
  - Frondo 8y ago
    You don't need bitcoin to operate an escrow service.

hoffs 8y ago

You buy a good online from a seller, seller doesn't ship the item and refuses to pay back. What then? With credit cards you can go to the bank and demand chargeback or whatever.

decentralised 8y ago
Do you buy the good directly from the seller? If so, and if you believe the seller isn't trustworthy, I'd recommend the use of a smart-contract that only releases the coins if both parties sign a message.
- ss248 8y ago
  But how would you protect the seller from the "evil buyer"? The one who receives the goods, but never releases the lock? Sure, he is not getting his money back, but the seller is not getting that money also.
  - decentralised 8y ago
    The buyer has to pay to make the order, that's usually the case in most e-commerce transactions I can think of. If the evil buyer convinces the naive seller to ship products without a payment being executed or a smart-contract based bond, then the situation is exactly the same with or without cryptocurrencies.... the seller must report the buyer to the police and either hire a collection agency or take some other action to recover the goods. edit: on a second look, I think I misread your comment... are you asking about the mechanics of conterfactual transactions? If so, the idea is that the contract is entered with the buyer signing a transaction with some form of conditional operation. One the seller ships the product, the shipping code could very well be the condition that allows releasing the funds. There's plenty to talk about here around game theory and mechanism design, but if you are interested in the topic I can recommend some cool state-channel and plasma contracts we can go over and discuss.
    - ss248 8y ago
      >The buyer has to pay to make the order You mean like another lock? But what is stopping the seller from holding buyer's money hostage and force him to release the lock just to get some money back even when he did not receive the goods? An example of evil buyer would be something like: 1. The buyer buys goods from seller with smart-contract 2. The money in buyer's wallet gets locked. 3. The seller ships the goods. 4. The buyer receives the goods, but never signs the smart-contract. That way the buyer gets what he paid for, but the seller never receives the money. No matter how i think about it, smart-contract idea looks abusable.
      - decentralised 8y ago
        How about this: 1) the contract is initiated by the seller (sets amount, payable accounts, etc) 2) the contract is signed by the buyer, moving (or locking) an amount of money in the contract pending one of two situations: 2.1) the seller signs a message that the product has been shipped and the buyer signs a message the product has been received 2.2) the seller signs a message that the product has been shipped and after 30 days of no further message from the buyer's side the contract releases the funds In this case, the solution is to have a commitment from the buyer that unless they take action (sign a special message to denounce the transaction / pull out of the contract) the seller gets paid. To address the scenario where the seller is malicious, the buyer can use the on-chain commitments from both parties as evidence of malpractice and report the situation. (edit: formatting)
        siquick 8y ago
        Isn't this very similar to what Escrow does?
        deleted 8y ago
        [deleted]
        jakelazaroff 8y ago
        Your caveat still renders the system vulnerable to malicious buyers. What if the buyer receives the product but "takes action" by denouncing the transaction or exiting the contract?
ss248 8y ago
Banks are not really necessary. Even by basic game theory, scamming your customers has long term negative value. Reputation is worth much more than money. We just have to design systems around it.
- mantas 8y ago
  But someone has to take the gamble. Or everybody uses only established reputable sellers. And newcomers can't break into the market. Customer protection is great to give small businesses a chance.
  - ss248 8y ago
    Basic solution would be for seller with low reputation to lower the price. Even if not a lot of buyers take the risk, lower price should eventually attract enough people to allow a legitimate seller to build the reputation.
    - mantas 8y ago
      People already don't trust too low prices, because that's a sign of a scammer. And margins are already rather low. Would you take a gamble save €10 or loose €1000? Even with all the customers' protection in place, I already rather pay 1-2% more if that means buying for a more reputable seller. Without the protection, they'd have to be in scammers' price range to be considered... In many cases the entrenched players in the market already have good prices. Upstarts who can't use economy-of-scale try to make their way by providing superb customer service or providing a better service in another way. But it's hard to give it a try when you don't have the protection of chargeback.
      - ss248 8y ago
        Well, it's hard to compete in the already established markets. But you have to, one way or another, usually by providing better value. Be it lower price, faster delivery or higher quality products. Otherwise, if there is no initiative for people to use your services, are you really necessary?
mrhappyunhappy 8y ago
Blockchain based reputation system. Buy only from reputable sellers. First time seller, you just have to test your luck with those.
deepnet 8y ago
Yes and there is a converse problem, the seller ships the item but the customer having received the item fraudulently requests chargeback - this is common, sadly. I lose the item, the money and a fee - bitcoin, like cash solves the fraudulent chargeback problem - but the buyer is unprotected. Trusted Escrow solves both problems. The chargeback system isn't good for small retailers. The banks have no incentive to check the system or secure the card as the onus is on the merchant.
- mikeash 8y ago
  The chargeback system is the only reason I’m willing to patronize small retailers at all in many circumstances. If it were really a net negative for them, they wouldn’t accept cards at all.
- Frondo 8y ago
  You don't need bitcoin to operate an escrow service.