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Huh! I actually started working on a system that does something very similar, which ended up being morphed into Bitrated after a few people convinced me that it

by nadaviv 13y ago

Huh! I actually started working on a system that does something very similar, which ended up being morphed into Bitrated after a few people convinced me that it wouldn't work. This idea has been brought up in the Bitcoin community from time to time [1] [2], usually referred to as mutual assured destruction, risk deposit or nash equilibrium. I personally really like this idea and think that it could work well with rational players. The problem is that there is room for abuse - one party could tell the other party "okay, I'm not going to finish that deal with you. we can both either lose everything, or you pay me 70% of the risk deposit and get to keep 30% of it". In the long run, rational players should always refuse to such offers. If scammers would know that everyone always refuses, they'll quickly get into a loss and stop doing that. The problem is that I'm not sure how people would react in such situations - why not take the 30%? As to your idea of publishing history - that could work, if that system could somehow know who's a fraudster and who isn't. Its kinda hard to tell by just looking at the blockchain and seeing what happens with the coins, there could be multiple reasons for the funds getting split. [1] http://nashx.com/HowItWorks http://nashx.com/HowItWorks (requires trust in the website operator, as he holds the funds. at least it was like that last time I saw it) [2] https://gist.github.com/etotheipi/2305966 https://gist.github.com/etotheipi/2305966

darkmighty 13y ago
Interesting, let me add that you should let people convince you it won't work without proof, especially for something as reliant on behavior! I think a reputation system could be built using some kind of peer-to-peer trust system. For example, I'm aware you can prove a certain transaction is yours. Simply by collecting a series of transactions conducted with the merchant and with a series of merchant's trusted peers, the merchant could perhaps decide on the (k1,k2) he might propose; and similarly users may assemble a database of verifiable cases where the transaction backfired (since each user can prove the transaction and the merchant address). It just bugs me -- one of the great promises of crypto currencies is the elimination of need of trusted 3rd parties -- only to be unable to perform useful real world transactions without them. The key to enabling this would be devising a system for voluntary transparency, I believe.
Anderkent 13y ago
>In the long run, rational players should always refuse to such offers. If scammers would know that everyone always refuses, they'll quickly get into a loss and stop doing that. The problem is that I'm not sure how people would react in such situations - why not take the 30%? People have a very strong fairness instinct, and will probably refuse such blackmail. There's a famous experiment where some amount of money is given to one person, and he decides how to split it with a partner (50-50, 100-0, etc.). The partner decides whether to accept the deal or refuse it, in which case the money is lost. If I remember correctly most people refused offers under 20%, and that's without the anger that someone trying to blackmail you would cause.

by nadaviv 13y ago

darkmighty 13y ago

Interesting, let me add that you should let people convince you it won't work without proof, especially for something as reliant on behavior! I think a reputation system could be built using some kind of peer-to-peer trust system. For example, I'm aware you can prove a certain transaction is yours. Simply by collecting a series of transactions conducted with the merchant and with a series of merchant's trusted peers, the merchant could perhaps decide on the (k1,k2) he might propose; and similarly users may assemble a database of verifiable cases where the transaction backfired (since each user can prove the transaction and the merchant address). It just bugs me -- one of the great promises of crypto currencies is the elimination of need of trusted 3rd parties -- only to be unable to perform useful real world transactions without them. The key to enabling this would be devising a system for voluntary transparency, I believe.

Anderkent 13y ago

>In the long run, rational players should always refuse to such offers. If scammers would know that everyone always refuses, they'll quickly get into a loss and stop doing that. The problem is that I'm not sure how people would react in such situations - why not take the 30%? People have a very strong fairness instinct, and will probably refuse such blackmail. There's a famous experiment where some amount of money is given to one person, and he decides how to split it with a partner (50-50, 100-0, etc.). The partner decides whether to accept the deal or refuse it, in which case the money is lost. If I remember correctly most people refused offers under 20%, and that's without the anger that someone trying to blackmail you would cause.