Bitcoin Forum

Good faith in services won't be enough, we have learned.

I would strongly advise any new eWallet or Dwolla-like services offer a contract that when signed, legally obligates you to carry out your end of the services.  This includes compensation for any losses.

To the client-end, if they refuse to enter into a contract, DO NOT USE their services.

If it may be difficult on how to structure such a contract - treat it as if it were a Bitcoin Constitution.  Let the community build the template of this contract/constitution.  'All services must abide by these agreements herein'.

How do you enforce a contract with someone who doesn't have to identify themselves?

How do you grab bitcoins from inside a secure server?

Seems like the insurance rates would have to have been sky high to cover the losses that people's friendly neighborhood hackers are showing them - or maybe not quite exactly showing them in detail - how to "explain away".

I wonder how much losses paypal, e-gold, pecunix, alertpay and so on take regularly from these same or equivalent hackers?

Hey maybe they even use sock-puppet accounts to get auctionable stuff from merchants and charge back the merchants so as to cover all the losses these hackers cause them? Maybe that'd be better than admitting these hacks are so easy, that no system, even made by security expert computer-scientists, is unhackable, that, rather, one simply has to plan to in effect "pay off" a certain percentage of customer funds to hackers?

-MarkM- (Oh wait, did I forget a <sarc>...</sarc> somewhere in there?)

1. What contract would you get that could be enforced across all country boundaries?

2. Having worked in IT security for one of the big US Banks I can tell you that when it comes to Credit Card fraud it cost the banks a ton however at the same time Credit Cards are their biggest money maker with interest and fees. It was standard practice that if anyone from the CC group called and asked for some privilege that would normally require a bunch of paperwork and signatures that you were to do as requested right then and there, damn the paperwork.

3. As a Sysadmin that goes in behind a large number of techs and other Sysadmins I can say there are a ton of shortcuts and bad practices taken those that should know better so assuming any machine is "secure" is well, dumb.

I am not sure how much experience you have with the real world already... But in the vast majority of cases a contract is only there to benefit the richest party of a transaction (whoever can afford the lawyer) and its sole purpose is to LIMIT liabilities such as "having to pay for any losses" 

No company would ever sign random different contracts with / and made by each customer that would hold them liable for things beyond their control. That is insanity.

You already have a contract. If someone makes an offer and you accept it by providing them something of value, you have a contract. That's how the vast majority of contracts are formed:
http://en.wikipedia.org/wiki/Offer_and_acceptance

See, for example, Carlill v. Carbolic Smoke Ball Company:
http://en.wikipedia.org/wiki/Carlill_v_Carbolic_Smoke_Ball_Co

Mr katz, if you look at the original posters wording he is expecting "compensation for losses" which I don't think would ever be assumed in any verbal agreement?

That is reason that things like Insurance exists, because no person is going to be responsible for things beyond their reasonable control. Unless they charge a premium and specificly state they will offer insurance etc.

To be more specific, the contract wouldn't be geared towards financials and potential hack attacks from outside sources. 

I was imagining a contract geared more towards protecting against fraud.

I wouldn't trust any online wallet with bitcoins unless he/she publicly made a youtube video, stating they were going to do so, along with showing in the video various pieces of ID. Probably more...

Why, does something stop people from saying "I agree to compensate you for your losses"? And, in any event, these are not verbal agreements, these are written offers and then acceptance through an action.

That's certainly true. But I'm not sure what that has to do with trust and contracts.

Well I may have misread the original post, but to me it sounded as if the user wants an exchange that will guarantee them 100% of their deposit in case of a hacking. OR that he thinks individual users were to write up their own contracts with the exchange including any kind of zany compensation schemes the user could come up with.

I don't see that happening unless the fees are astronomical, and they specifically sold the fact that what is what they are offering.