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Those kinds of trust issues are present in some form in many kinds of commercial transactions, and there are many ways of dealing with them (insurance, lawsuits
by javert 14y ago
Those kinds of trust issues are present in some form in many kinds of commercial transactions, and there are many ways of dealing with them (insurance, lawsuits, interact with companies you can trust and avoid ones you can't, etc.).
- shuw 14y agoBitcoin provides plausible deniability, which makes lawsuits difficult. In contrast to centralized banking systems which leave a paper trail. And insuring bitcoins has its own logistical challenges that will probably scare an actuary. Trust is a hard one as I'm sure the people who used bitfloor had trusted it until today.
- javert 14y agoInsuring bitcoins is actually pretty easy. As a sidenote, there are already people doing it. The ideal way to do it would be to audit the exchange, and possibly also use an escrow, populated with money from the exchange, that pays you (the insurer) if the exchange loses money. It would be in the interest of the exchange to cooperate in these areas, in order to promote the availability of cheaper insurance, and therefore more customers. A digression: Bitcoin would be the government regulator's wet dream if you could assign people addresses (and they could only use the assigned address), because you can trivially track all transactions. Actually, I have in mind a way to implement such a system in a (likely) cryptographically sound and enforceable way. But in theory, the government could outlaw cash and track all transactions anyway.