Bitcoin Forum

An Explanation Of Bitcoin And Its Implications For Consumer Protection

http://www.naag.org/an-explanation-of-bitcoin-and-its-implications-for-consumer-protection.php

TL;DR but let me guess. More middlemen feeling left out?

bitcoin does not have consumer protection. but any business no matter the currency, if its selling goods and services to customers, they need to obide by consumer protection rules as they exist today. this is not a bitcoin issue this is a business issue.

Aren't consumers protected by bitcoin through multisig escrow and arbitration? Isn't this at least similar or possibly more secure form of consumer protection than conventional credit card disputes?

It is in early stage of bitcoin which is not perfect yet to protect customers' right. The majority of people don't have sufficient  knowledge of how to protect themself.

no and no, not by default
you can try getting businesses to set up multisig's or getting them to agree to use an unaffiliated middleman.. but then that involves the middleman being trusted and ethical.

once you give a company your bitcoins.. its theirs..

consumer protection in regards to businesses is that a business is suppose to offer refund policies... basically be ethical and honour refunds, right now BFL is in a lawsuit case for not being ethical.

i think BFL will be the precedent that will make scammers think twice. as they beleive they are above consumer law by taking bitcoins, it is just a shame that consumers dont use these consumer laws and instead cry in their basements when a business rips them off.

This is why trusted platforms that integrate mutisig escrow seamlessly by default will become more popular in the future like openbazaar.

http://www.coindesk.com/openbazaar-bitcoin-build-decentralised-ebay/

Eventually it could be possible to see a sort of consumer union of people who buy things through a trusted address that has enough of a reputation that businesses are willing to accept these escrowed funds and abide by the agreed upon policies.

It would be a long time from now though. We're still in the merchant adoption stage and this I think is something that would happen post-merchant adoption. When the advantage merchants have over consumers is too great and the consumers can leverage their buying power as a group to effectively buy protection from unethical business practices.

It will be interesting to see if this happens or not. Since something like this is precisely what consumers should be doing when operating in a free market economy.

If you were to deal with large companies then you will somewhat be protected. In the event that a transaction goes "bad" somehow, meaning that they do not deliver as promised then they will risk their reputation if they do not make things right.

at the moment there are a few multicoin exchanges that due to the fact they manage different alts, they also offer escrow services.

EG
Person A wants litecoin, person B wants bitcoin
(A) puts their bitcoin into a bitcoin escrow address held by the exchange
(B) puts their litecoin into a litecoin escrow address held by the exchange.

when both sides are confirmed the funds move to designated recipients.

when exchanges climb out of their basements and start getting liability insurance, you will see people use escrow alot more (no regulation needed). and if they default and try shouting bankrupcy, consumers can still use CURRENT consumer laws and insurance claims against these companies. if not insured then consumers become part of the bankruptcy debt (research mtgox saga).

no laws need to change. just a strengthening of consumers perceptions.. most consumers blindly trust basement dwelling scammers, simply because they have a glamorous website.
its consumer rights training that is needed, not new laws


exactly. with consumer training about their rights they already have, they can 'vote with their feet' and stay away from businesses that are not insured, that hide behind proxies/whois guards. and show no insurance reference numbers on their exchanges., as for merchants, insurance is less needed (BFL for instance) as all consumers need to do is call upon consumer law agencies. (BBB)

Business, for their own interest, will provide competitive price and quality service.

But it's still in consumers best interest to get as much as they can from the business via organization. This way they can negotiate as a group. And it's in the best interest of the business to cooperate as well. Best way to reach an equilibrium. But people have to realise that their aggregate spending has power and that their power should be used to their advantage.

Exactly. That is the nature of free and open markets. Reputation is as much a currency as bit coin or fiat.

That's true, but it's still in consumers best interests as a group to maximise their value.

- Each wallet comes with one private key, which is available only to the owner of the virtual wallet, and an infinite number of public keys, which are used to send and record the transfer of bitcoins.[11]
- The public key encrypts bitcoins to ensure safe arrival to the recipient, and the private key decrypts bitcoins once they have reached the intended virtual wallet. [12]

Clearly some factual errors here. This is a good example of the steep uphill battle Bitcoin faces if it's ever going to be widely used.