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Bitcoin has solutions to these issues, which will continue to grow and develop as the ecosystem matures. There is a built-in system for escrow that works will

by jnbiche 13y ago

Bitcoin has solutions to these issues, which will continue to grow and develop as the ecosystem matures. There is a built-in system for escrow that works will for this kind of transaction with a merchant of unknown repute. For that, you pay a small surcharge to the escrow provider, and you are then protected against fraud: https://www.bitrated.com/ https://www.bitrated.com/ But for all those transactions where you trust the merchant (ie, overstock.com), you don't have to pay for a service that you don't need.

JohnTHaller 13y ago
Does this automatically work with all bitcoin accepters? Or do they have to option / decide if they want to accept it?
- nadaviv 13y ago
  They have the option to accept it. Technically, if you figure out the merchant's public key, you could "force" them into being a part of the "escrow" [1], but unless they agreed to it (and agreed to the arbitrator being used) they won't consider the product paid until the payment is under their control. [1] I'm using quotes because the way it works with multi-signature isn't an escrow, but escrow is commonly used when talking about something like this. There's some explanation about how multi-signature transactions works and why its not an escrow in Bitrated's FAQ, under "How does Bitcoin arbitration work?" and "Is this an escrow?" (https://www.bitrated.com/faq.html https://www.bitrated.com/faq.html)
nadaviv 13y ago
One note about fees - because of the way this works with Bitcoin's multi-signature transactions, arbitrators don't have to intervene at all when there's no dispute so a lot of them choose to charge fees only for disputed transactions, meaning that most transactions should be free of charge. That being said, I do see the rational behind charging for every transaction and think that its going to be a popular choice too. I wrote some of the reasons for that here: http://www.reddit.com/r/BitcoinSerious/comments/1sqibz/bitratedcom_uses_bitcoins_nofm_protocol_to/ce1o6ds http://www.reddit.com/r/BitcoinSerious/comments/1sqibz/bitra... (near the end, in the "Edit:") (full disclosure: I'm Bitrated's creator)
- jnbiche 13y ago
  I absolutely think the only feasible business model for arbitrators is to charge a fee for each transaction. Otherwise, how can they afford to spend the time and money to investigate a dispute properly? People are not going to want to pay for more than the cost of an item when there is a dispute, yet it could cost many more times the value of the disputed item to conduct a proper investigation and produce a fair arbitration. Great project, by the way. Thanks for releasing it open source!

by jnbiche 13y ago

JohnTHaller 13y ago

Does this automatically work with all bitcoin accepters? Or do they have to option / decide if they want to accept it?

nadaviv 13y ago
They have the option to accept it. Technically, if you figure out the merchant's public key, you could "force" them into being a part of the "escrow" [1], but unless they agreed to it (and agreed to the arbitrator being used) they won't consider the product paid until the payment is under their control. [1] I'm using quotes because the way it works with multi-signature isn't an escrow, but escrow is commonly used when talking about something like this. There's some explanation about how multi-signature transactions works and why its not an escrow in Bitrated's FAQ, under "How does Bitcoin arbitration work?" and "Is this an escrow?" (https://www.bitrated.com/faq.html https://www.bitrated.com/faq.html)

nadaviv 13y ago

One note about fees - because of the way this works with Bitcoin's multi-signature transactions, arbitrators don't have to intervene at all when there's no dispute so a lot of them choose to charge fees only for disputed transactions, meaning that most transactions should be free of charge. That being said, I do see the rational behind charging for every transaction and think that its going to be a popular choice too. I wrote some of the reasons for that here: http://www.reddit.com/r/BitcoinSerious/comments/1sqibz/bitratedcom_uses_bitcoins_nofm_protocol_to/ce1o6ds http://www.reddit.com/r/BitcoinSerious/comments/1sqibz/bitra... (near the end, in the "Edit:") (full disclosure: I'm Bitrated's creator)

jnbiche 13y ago
I absolutely think the only feasible business model for arbitrators is to charge a fee for each transaction. Otherwise, how can they afford to spend the time and money to investigate a dispute properly? People are not going to want to pay for more than the cost of an item when there is a dispute, yet it could cost many more times the value of the disputed item to conduct a proper investigation and produce a fair arbitration. Great project, by the way. Thanks for releasing it open source!