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Bitcoin might be more "secure" in some fiddly sense, but the credit card system is much safer for normal people. A chargeback system is a protocol requiring ce

Bitcoin might be more "secure" in some fiddly sense, but the credit card system is much safer for normal people. A chargeback system is a protocol requiring centralized trust. A company will no doubt implement this. Centralized trust is of course necessary. One could argue that it defeats the point of bitcoin. Yet that's not true, if you think of bitcoin as being a currency (rather than a "secure" currency, or any other label). If it's a currency, then a chargeback protocol is simply a company waiting to happen. And the company would necessarily have to be large, because it has to bear the cost of fraud. Luckily, PayPal has already done a lot of the homework necessary to pull off such an endeavor. Lastly, it doesn't matter what normal people use. It matters what will become convenient for normal people to use. That's a subtle distinction, because it means as soon as infrastructure is built then people may start using it by default.

nadaviv 13y ago
For the case of buyer-seller disputes, Bitcoin has a really neat way of handling escrow with its m-of-n transactions [1]. You can make a payment that requires 2 of 3 public keys (the 3 keys being the buyer's, the seller's, and a trusted third party) to be redeemed. If the buyer/seller agree, they can move the money on their own. If they don't, they can go the the third party and solve it with them. Yet, the third party never controls the money and can't take it without one of the buyer/seller signing the transaction. Indeed, all is needed is some trusted company to start doing that. [1] https://en.bitcoin.it/wiki/BIP_0011 https://en.bitcoin.it/wiki/BIP_0011
- tptacek 13y ago
  We already have a company that does this with real money: Paypal. How do you feel about how they adjudicate disputes and enforce outcomes?
  - bmdavi3 13y ago
    With Paypal you get one option for dispute resolution: Paypal. With Bitcoin, you can have any number of companies compete to be the arbitrator for your transactions. May the most even handed one win.
tptacek 13y ago
I can make anything trustworthy by positing that someone will eventually come around and make it so.

nadaviv 13y ago

For the case of buyer-seller disputes, Bitcoin has a really neat way of handling escrow with its m-of-n transactions [1]. You can make a payment that requires 2 of 3 public keys (the 3 keys being the buyer's, the seller's, and a trusted third party) to be redeemed. If the buyer/seller agree, they can move the money on their own. If they don't, they can go the the third party and solve it with them. Yet, the third party never controls the money and can't take it without one of the buyer/seller signing the transaction. Indeed, all is needed is some trusted company to start doing that. [1] https://en.bitcoin.it/wiki/BIP_0011 https://en.bitcoin.it/wiki/BIP_0011

tptacek 13y ago
We already have a company that does this with real money: Paypal. How do you feel about how they adjudicate disputes and enforce outcomes?
- bmdavi3 13y ago
  With Paypal you get one option for dispute resolution: Paypal. With Bitcoin, you can have any number of companies compete to be the arbitrator for your transactions. May the most even handed one win.

tptacek 13y ago

I can make anything trustworthy by positing that someone will eventually come around and make it so.