Bitcoin Forum

When I was reading an article, I came across a disadvantage of bitcoin that stated that there "No Chargebacks or Refunds" in bitcoin transactions. What do you think can be the way forward in solving this problem? Many, regardless of whether you are pro-bitcoin or anti-bitcoin, your interest is in making sure that transactions where currency is involved have a Charge-back or Refund policy.

Below is what the article said on this point: "No Chargebacks or Refunds"
One of Bitcoin’s biggest drawbacks is a lack of standardized policy for chargebacks or refunds, as all credit card companies and traditional online payment processors have. Users affected by transaction fraud – for instance, they purchase goods that the seller never delivers – can’t request a refund through Bitcoin. In fact, Bitcoin’s decentralized structure makes it impossible for any single party to arbitrate disputes between users. While miners take responsibility for recording transactions, they’re not qualified to assess their legitimacy.
Some newer cryptocurrencies, such as Ripple, have rudimentary chargeback and refund functions, but this feature has yet to be built into Bitcoin.

Why do you want to make Bitcoin transactions refundable? No monetary system or currency in the world offers refunds. The Dollar, Euro, Yen, Yuan, the list goes on...none of them offer refunds.

To do so you'd need to centralize the administration of transactions.

Additionally, how do you verify that a refund request isn't fraudulent?


You've got the following concerns to contend with:

• Verifying that a refund request is legit (and not fraud)
• Suspend or hold the value of transactions for whatever grace period is allowed to honor refunds
• Figure out how to handle refunds requested of wallets that no longer have funds to recover it

It's companies and people that offer refunds, not currency, not monetary systems. If you want refundable bitcoin transactions then only transact with companies or people that are willing to refund your transaction.

Return incorrectly sent or bitcoins spent on payment for goods can not be and I believe that this is very good. Yes, purchases through the crypto currency in this case may have difficulties, but I think that this problem can be solved. For example, use insurance services that will be intermediaries between the seller and the buyer.

its a big issue i have with bitcoin. no charge backs makes it easy for you to get scammed and the scammer gets away scott free.

Simple, implement a unique smart contract that is witnessless, capable of fulfilling the agreement to transact only upon some certain required conditions being met, agreed upon by the two or more parties involved with the transaction. This way, the payment will be negligible if the conditions aren't met, thereby issuing a reimbursement.
  Now if only I was tech smart, luckily we have such a diverse community of crypto enthusiasts, someone will certainly fix this issue. I'm sure their are already protocalls out that tack such a problem as this.

That is where escrows come in to prevent you from getting scammed, Use escrow and make sure you are using a good escrow. You really can't blame bitcoin for this because companies like paypal are much easier to use their chargeback feature and scam people, That's the whole point of bitcoin, To have no chargeback and be decentralized.
Don't you know that bitcoin has escrow protocol? It's not yet implemented but it's there in the design, It just needs some development to have such smart contracts to act as escrow without the need of a third party.

its an issue i have with creditcards/paypal.. ALLOWING chargebacks.. a customer gets the goods and gets their money back, because its then easy to chargeback scam a seller to get goods and run off with the money aswell scott free

Credit card chargebacks are pain the the a** for merchants and same with paypal like payment methods where customer can file chargebacks even after getting goods at good condition.

Bitcoin is here to solve this problem and this is not actually a problem in bitcoin  ;D

Use escrow, a lot of people who buy/sell things on this forum are using one, especially for moderate and big transactions. If Bitcoin will be widely used commercially, for example by sites like Amazon and Ebay, they will be acting as middleman and only forwarding coins to the seller after the buyer confirms the purchase. There's already a site called XBTFreelancer where people can earn Bitcoins by working on projects, or hire people, all with Bitcoin and it acts like that - employers deposit Bitcoins and they are released after both sides agree to do so, if there is some dispute, admins step in and solve it.

maybe you are conveying is one of the weaknesses and risks in investing with bitcoin I'm sure one day bitcoin will solve the problem and risk

yes, I agree with you, when the bitcoin transaction, then there is no refund. this is a user mistake. and this bitcoin technology, not the same as fiat, or with other currency. digital has a shape of transaction that is easier and safer, but will be risky if our transaction is wrong.

this is not a  disadvantage and the author of what you were reading haven't even read about bitcoin! even if you read the paper you can see this clearly there. as a matter of fact having "charge back" features is one of the reasons bitcoin was created because it is a huge flaw of a payment system to have charge backs and this has been one of the biggest sources of fraud in those systems such as credit cards, paypal,... that has damaged businesses greatly.

if you are so concerned about a trade that you are doing (like buying something from a shop) then use multisignature features that bitcoin offers. that can easily perform what you require.

Sure chargeback has an advantage but there are also disadvantages of having a chargeback system, first of all there should be a company that will monitor all transactions and give service to all people, making it a centralized currency which is oppose to original purpose of Bitcoin being a decentralized cryptocurrency. However, it is possible to have a chargeback if an online wallet (with KYC) provider wants to, what will happen is it will function just like paypal and credit cards. For me there's no need for this because we have a lot escrow service out there.

You mentioned Ripple. Have you ever used Ripple.  If you ever lose your backup wallet you will lose all your Ripple. Refund will only work if you have the backup file but once you you lost it is as frustrating as other cryptocurrencies. If you want refund use escrow services or better yet a smart contract. You are always looking for chargebacks and refunds even though the fiat system fails as well when it comes to this issue.

Ripple is a centralized altcoin that the owners control everything including your wallets! in the eyes of the public it is like any other cryptocurrency but the fact is in the past they have shown that they can easily put their hands in your pocket and take the coins you have. so the features of centralized payments systems like paypal is also available in centralized altcoins like Ripple.

this is not something we  want or need for bitcoin which is why it doesn't exist.

I  think you can use Multisig wallet or escrow for the payment if you are not sure of product or service.
Most of the service chargeback happens because company save your CC details and put recurring payment for next month.
Use of BTC will guarantee that no body can charge  you autmatically

If I were your friend and you send me some coin wrongly, I can send it back to you minus fee's mining.
That's fair, but if you put another wrong address that tou do not know who belongs to, that's buddy is a one way trip.

Be wise and think twice and remeber to double check before sending

I think with a decentralized infrastructure like Bitcoin it's almost impossible to create a refund system, because no one can judge which transaction is valid for refund or not. refund in BItcoin can also create security holes for its users rather than providing protection to users.

if you have proof of delivery then you wont have this issue . i always add tracking to my shipping so buyers cant say they didnt get the item.

That article is actually incorrect. There's a reason why a lot of companies wait for at least 1 confirmation before sending you whatever you bought. I'm not going to go into detail about it just because not a lot of people know about it, so there's no reason to spread info about it. Bitcoin does have the ledger system that lists out all of the transactions, so there's technically a list of every transaction made. There's nothing stopping someone from finding a transaction based on a transaction ID. The only part that people have issues with is the fact that both parties are linked by an anonymous address.

Bitcoin transactions will never be reversible or refundable. Once your transaction is complete, you receive a notification and that is that. One will always be recieve the goods you bought from a company when money transaction is complete. If by one way or the other, you do not receive what you paid for, then you can trace whatever you bought with your transaction ID. Moreover, you should be aware of the authenticity of the company or shop you are dealing with in order to avoid being scammed.

 Actually I agree with you, when the bitcoin transaction, then there is no refund. This is a user mistake and this bitcoin technology, not the same as fiat or with other currency. Digital has a shape of transaction that is easier and safier the world. But it's a matter of sorrow that will be risky if our transaction is wrong. :)

What do you mean by no currency or monetary system in the world offers refunds? I thought when we wrongly purchase an item instead of the one we want, for example online shopping, you can request refund before the product is delivered or shipped so as to purchase the right product you wanted. It certainly happened to one of my friends and me where refunds were made. And in addition, I understand and partly agree to what you have said, but in the article a cryptocurrency company added the refund functions which are still developing.

There is no way to revert the transaction after it is confirmed and I think that's how it should be in order to build transparency and trust on this technology. I don't see any need of having refund feature in cryptocurrencies. If someone is concerned about the security while doing any transaction then there are plenty of escrow services available to add the extra layer of security.

Thats a challenge when it comes to.bitcoin. Once done cannot be refunded as there is no controlling authority

This would be good for those that got scammed, but this can also be used to scam as anybody can request even a fraudulent refund. There will always be people that will find ways to abuse something that can give them money. I think will not be a good idea.

Bitcoin transaction should be refundable if sended bitcoins on incorrect address or scam by someone. blockchain need to make a authority so they can trace our transactions is that good or not or sending bitcoin is legal transaction or not and ensure buyer and seller their bitcoin is safe. but now this is not possible if u are sending bitcoins than check twice bitcoin address and ensure that person is not a scammer.

that is perfectly the truth because all the currency listed above has no refund so why should bitcoin has refund. now one thing there is that; this is blockchain everything is decentralized so to all the transactions has it's own records but it can't refund it mistaken send to the wrong address, during transaction make sure that the wallet you are using perfectly right and negotiate with the third party before doing transaction as well you have a middle man that will stand in respect of the transactions that you are doing, I think with it will be ok but talking of refunding is no possible.

I have no idea there are some coins that have the refund feature. All along I thought all coins do not refund transaction. But until bitcoin build the refundable function to their services, we just have to keep doing what we do and that is double checking the addresses we make transactions to.

before investing instead of you you have realized the risks of bitcoin investment?
then why would you want your money back? Get out of here.
my advice to you, learn before you make an investment.

It seems to me that this is not a drawback of bitcoin and any other crypto currency, but on the contrary is an advantage. People will finally begin to pay more attention to their money and money transfers.

Many people lose their bitcoin to other people through wrong transactions. People after receiving the bitcoin do not send it back to the owner thereby causing the sender to lose it. It’s important to understand how Coinbase handles digital currency transactions to ensure any refunds reach the sender’s account. Coinbase does not support digital currency being returned directly to an address it was sent “from” (in the digital currency world, we call these input addresses).
When a Coinbase user sends digital currency from their wallet, the address it comes "from" is one of Coinbase's many hot wallet addresses. Any coins sent back to that address would be sent to Coinbase, not your own wallet.

There is no way that you can refund your Bitcoin if you already sent it unless it ia a personal transaction or business transaction that is known by you and they offer a refund policy on their transaction.

There is no way a transaction already sent will be refundable in this Crypto currency sphere, this can only be done with the agreement of the recipient deciding to return.

No I have never used it, but Ripple was mentioned in the article. But thanks for recommending Escrow.

Thank you, very insightful.

I believe that if bitcoin does not have a way to return the transaction, it is the opposite of bitcoin.
There are a lot of projects in the block system that are connected to databases, and the biggest plus is not the ability to change the data.

Bitcoin is a currency system that is online based. Which is transmitted through the p2p system and it cannot refundable once it transmitted. For this reason many times many people mistakenly send to other people, which they can not bring back.
It should be refundable because when people mistakenly send their money to another then they can bring back their money. Also it should not be refundable otherwise people can be dishonest like after sending someone, they will take it again.

Indeed, this can be a serious matter when we have sent bitcoin transaction successfully; nothing will be refundable specially when its a close deal. Maybe there's a scenario it will be refunded if we know personally the person whose the recipient of the bitcoin you sent for. Because you're being transparent in both parties, but with an anonymous deal just expect no honesty for that. The refunds can be done by personal intentions, and not with reverse transactions.

  it depends on the type and nature of the transaction. if there is a mutual agreement and evidence of  business transaction as per both parties agreement
and goods delivery then we know that both reached an agreement there is nothing to argue over of refunding. but when it comes to issue of fraud, scam, internet theft such as hackers hacking into account to clear account, how can that be traced to the perpetrators via the transfer, i think there should be a way out, only then bitcoin can be refundable

Thanks for this valuable information. It might help me some other day.

If transactions are reversible, the Bitcoin must operate in a centralized system, not decentralized one. I suppose this feature of Bitcoin is not its shortcomings but the feature that was intentionally created to protect users from getting scammed.

For what I know lightning network provides for reimbursement in case one wants to be smart but the blockchain of bitcoin does not have to rollback.

I am not an expert but it seems legit for me that we cannot have that option while we're having that decentralized system, because it needs that somebody will take upon themselves those responsibility to refund, and since nobody rules Bitcoin, who will pay?

I am a pro person against bitcoin. and I've been doing a lot of bitcoin transactions, and never billing and fraud with bitcoins

Bitcoin transactions is and cannot be refundable,simply because is its nature,a decentralized transaction.. Except block chain is going centralized, of which one of the aims of bitcoins is disabled..

very difficult if the transaction using crypto can be refundable. the transaction involves the seller and the buyer, so as not to involve the other party for approval of the transaction. so very difficult to apply it.

one of the shortcomings of bitcoin or it can be said of a bitcoin wallet about a transaction that is not refundable if we transact on an unknown person, except when the person who we can know the solution is sent back to our wallet.

there are a few things about bitcoin you should know it, bitcoin payments are irreversible this mean transaction cannot be refunded, it can only be refunded by the person receiving the funds.

Wow, thanks for telling us. Nobody knew about that and this is not the reason why OP is asking whether reversible transactions can be added.  ;)


It's not a shortcoming, it's a well thought option that makes it similar to transacting in cash. If you meet someone in the street and that person sells you something, you accept the terms, pay and walk away, you can't get the money back. It's a normal thing that puts both parties on the same level. If you used the item, broke it, and demanded a chargeback it wouldn't be fair towards the seller, would it?

let me straight up this point.
Miners jobs arent recording transactions instead verifying it. It is the job of nodes to record transactions then pass it to the miners to verify it.

Sticking to Satoshi vision and Bitcoin whitepaper, chargeback, and a refund will only make BItcoin centralized which is, its the opposite of Satoshi vision. It is completely opposite if we talk about centralized crypto like Ripple.

No, once Bitcoin reaches 2-3 confirmations, this transaction can no way be reversed. It is settled. You can only get refunds if both parties agree and send a new transaction.

Most likely because of the possibility of fraud. Many residents do not even know how to use cryptocurrency. And the economy of some countries does not allow you to enter even some kind of cryptocurrency.

I don’t think it’s necessary to be implemented on Bitcoin because there is an escrow service if you want to transact safely or you are doubting a seller who has no track record rather than create a problem for Bitcoin and I think the best verification process is done by humans even though humans often make mistakes.

It’s true that Bitcoin users need refund feature but not Bitcoin should provide it, it’s the seller and customer’s matter, because if refund applied to Bitcoin it can create a security hole in Bitcoin and I think determining which transaction that have the right to get the refund requires human intervention because the refund requires verification from both parties, meanwhile Bitcoin runs on the community, not the institution.

Bitcoin is a digital currency that is used for payment of bills and purchasing of goods as the case may be, therefore, bitcoin is an asset, which every transaction made most be started clear before proceeding transaction .

I do not really know for now because basing on observation if you will send bitcoin to a valid digital wallet address then it could not be undone and you could never get back your BTC. Aside from that if the coins being sent to a digital wallet which is not being found then it will not going send and it will be lost in the air. So doing btc transaction should be a habit of checking the wallet address before sending BTC or any other related crypto.

Option, when the transaction will be returned, it is possible, but it is not clear what to pay for the miners, because someone must perform this work.

bitcoin is an online digital currency as we all know and a p2p transaction which makes it difficult to refund. making refunds can only be possible in  a centralised system of which bitcoin is a decentralised system. if there would be a refund then bitcoin would be a centralised system where transactions can be easily monitored  which i do not think it would be possible if it would then there would be a general reform in the bitcoin system which would take a whole processs and that would some how cause a delay in the system. for transaction to be refundable, there should be a data base for every holder of bitcoin account with his or her details including nationality and every other vital information. getting a refund depends on the both parties involved in the transaction if there is any closeness between both parties then there could be as both are well known to each other based on mutual agreement and understanding but however, getting a refund in the bitcoin transaction would not be that easy nor possible.

however, what is in bitcoin is complete. only need a few more innovations to be accepted into a large country. If that happens, the power of bitcoin is getting real!

Do I want to know more, in the transaction process if the error then the bitcoin is lost?

Bitcoin transactions can be refundable but the transaction fees which are paid can't be refundable now the transactions which you have done to the seller that you can get refund by talking to the seller. But the transaction fees and the confirmation time taken cant be refunded.

I think that will be depend on the error, if it's error cause wrong bitcoin address,  it will be lost forever and if it error because wrong address format, transaction wouldn't be executed and the fund will be refund to the sender address.

Why would be Bitcoin Transactions Re-Fundable???!!! do you get a refund when you invest or spend fiat?

There's no fiat currency that do transaction Refund when it comes to investment even when they are centralized, Bitcoin is a blockchain product and its decentralized, That's why there are lots of warning available before taken any decision be sure to read and understand to avoid regret or stories that touches

i dont think that will happen because as we know that bitcoin transaction is not refundable and i think that it will very immposible to make this happen, because the system at the beginning is work like that.

That's why bitcoin called a currency that stand alone. If you want bitcoin stand alone no someone can interaction with your transaction, you must ready to take all risk. Yeah and we all know bitcoin is first digital currency. :)

I don't think that's possible or should even be possible.
Bitcoin is what it's today all because of the services that it entails such as untraceable, unrefundable etc. I must tell you that if we want bitcoin to even be more than what it's today, it must remain anonymous. And Moreover sofar it's going through blockchain transaction then it has to remain unrefundable, my take.

With the wrong address format, the funds will not be "refunded" to you in any way since the "Send" button will not even function. Your bitcoins will not be moved as there were no transaction that has taken place in the first place.
The only "error" that you should be getting is none other than "Invalid address format." or "Insufficient funds." Both errors will not make you lose your bitcoins as the transaction will not come through. Once there's a valid address, sufficient amount of bitcoins to cover the transaction, then the bitcoin will be sent to the address. Sometimes it takes more time than the usual. There are traffics in bitcoin transaction as well but it's appearing a lot less than before even with small fees.
Obviously not when the transaction is done with physical money. In order for refund to take place in that, you have to convince the seller that you are reasonable to receive a refund. Otherwise, you can't just get refunded in buying things. On the other hand, in another part of the digital currency world, Paypal (the company), you can issue a dispute there. The thing with the dispute function is that it's abused by scammers and they have 180 days to dispute a transaction. A surefire way for them to get their money back is to claim that they got hacked and they didn't authorize the transaction.

I wonder what would be of bitcoin if we had that function. Would it be the same? I think the crypto world will be filled by scammers, just like the world of Paypal, and there will come a cryptocurrency that will overthrow bitcoin's from its throne simply because it has no dispute function. Dispute function is simply a flaw that people can easily abuse.

This is true, there is no way you can revert back the transaction that have been confirmed. That is cryptocurrency and blockchain.
so, this will not opening any room for errors or mistakes. You must not doing any mistake because it wont be able to reverse back.
I think this is not the lack of bitcoin or crypto, but this is the security of cryptocurrency.

In my opinion, this problem can certainly be solved, but this will lead to the fact that the crypto currency is subject to control from a third party. Return is nothing but the participation of the regulatory party. If you ask me-this function is not needed in General, and if you apply to stores, they can carry out a refund as a sending operation.

maybe you mean when you make a transaction failure and have issued the gas that you use to make the transaction, but there is no gas return like ETH or Riplle

Why do we need decentralized cryptocurrencies if they end up having the same disadvantages as our current system? And while there are certainly cases where people get scammed and it sucks not being able to get them their money back, I'd venture that most chargebacks done in the current system are not legit and make goods cost more in the end as chargebacks end up being passed on to the consumer

Yeah and it's quite impossible already to request for a refund given bitcoin's nature so better to check and double check first all information before finalizing a transaction. It's pretty much done once it pushes through

I do not think,  there's a measure already in place to make refunds.
It is not even possible to do this because of the decentralized structure of bitcoin.

.

Once any bitcoin transaction is confirmed and marked sent, there is no possibility of reversing it. That is why you need to be careful before confirming any transaction.

The problem with transactions and their cancellation cannot be solved. In Bitcoin, we do everything anonymously, so it is also impossible to return money to unknown people.

cancel the bitcoin transaction is impossible, this is not a warrant on the stock exchange. There is only one option, you can interrupt the transaction by setting higher parameters. :D

Luckily, your concern for such refund or chargeback is covered by the future direction that bitcoin will traverse to should the leading cryptocurrency hit it bigger and progress on, though not termed directly as a refund, yet, indicates payment guarantees.

Satoshi Nakamoto himself, back in 2010, indicates the variety of ways a transaction can be made where he cited Escrow transactions, bonded contracts, third-party arbitration & multiparty signature are among the possibilities.

Knowing that the non-refundable part of bitcoin's innate attribute will cause worry, part of bitcoin's design from the beginning was to incorporate safety measures of transactions. Thus, i do believe that your concern will be covered as the bitcoin technology develops over the years.

to have a chargebacks or refunds policy, you need to have third party involved
bitcoin is a pseudonymous peer to peer currency, it's a one to one transaction without identifiable user id
regular refund policy requires knowing a lot personal info about transaction and identified users involved
though another mechanism can be used to achieve similar effect... by using multisig address transaction and a trusted escrow as mediator :-\

That is one of the biggest setback of bitcoin, transactions are non refundable. Just like everyone said to make every transactions refundable a third party must be involved. Now is it worth it to sacrifice bitcoins main selling point which is being decentralized to fix this? I believe no. People will eventually leave and stop supporting bitcoin if that thing happens.

the only way is with an escrow system, because I've heard that system can return your money that you have sent, maybe you can use this system through services, because I think bitcoin hasn't added this system to the blockchain and might be afraid of using the escrow system .