Bitcoin Forum

I was thinking that one of the biggest obstacles to people getting very much money into the Bitcoin economy is having to trust a total stranger...

you can either send lots of cash to somebody you've never heard of, or to a website you've never heard of... it would turn a lot of people off for large dollar amounts.

I would like to present an idea of a trustworthy way to clinch a large Bitcoin deal, in a manner that leaves the buyer with good legal recourse assuming the seller didn't deliver.  It's crypto-based, but also something that is likely to be recognized by the courts since they use this themselves: good old Adobe PDF.

Specifically, digitally signed using PDF's built in facilities (which requires getting a third party to issue you a certificate and key).  When you buy a key, you don't even get to see the private key.  It's generated and delivered on a USB hardware crypto token which does the signing for you.  This makes signed PDF's airtight against the defense, "someone hacked my machine and stole my private key".

So, someone would still be sending lots of USD to someone they've never heard of, but they'd have a pretty decent shot at suing them if they were to be ripped off.  That would make the sort of person with lots of money to buy BTC much more comfortable.

Anyone who is willing to pay about $450 for an Adobe-recognized USB digital certificate (in addition to buying the full blown Adobe Acrobat) can issue Certified PDF's that will be recognized as such from within the free Adobe Reader.  Would be a good expense for someone who sold big BTC regularly.

Here is an example certified PDF.

The fact that Adobe Certified PDF natively supports third party crypto-based time stamps is a nice plus.  It's built in and automatic as long as you have an internet connection when you sign a document.

https://casascius.com/AgreementToDeliverBitcoins.pdf

Comments Requested.
EDIT: to update URL since I no longer have the static IP in prior revisions of the post.

I dislike the idea of using the courts to enforce claim.

Some people would prefer it though. Just because you don't like something doesn't mean others wouldn't  ;)

I think it's a silly expenditure, and we already have the bitcoin-otc trust web, so I think that need is served.

I like your thinking but several problems here:

1. Many people want to be anonymous, and will not be putting their real name on any document

2. What jurisdiction will you be suing in, as your counterparty is likely in a different country

3. Many sites that offer exchange/services for BTC (including mine) have a lot of reputational risk. It's a small community and word gets around fast - if they 'scammed' someone, the lost business/future revenue is likely several times worse than the scam amount, so it just doesn't happen. Also the otc web of trust as stated above is an effective method.

Those people can use Bitcoin 4 Cash.  Besides, the document is to protect the buyer, not the seller.  One could just as well leave the buyer name blank, word the agreement so the buyer is the person who can prove he wired the money.  Besides, wiring money and using courts makes it hard to stay anonymous.


The buyer would probably feel good if the contract allowed for the buyer's home venue.  Typically, the seller isn't going to rip off the buyer, so it should be moot for the seller.  The whole point of this would be to convey good faith and confidence to the buyer.  The risk is for the buyer to decide - obviously less if it's in the same country, more if it's international, but certainly beats sending cash in the mail or having nothing at all.


John Doe MOneybags who thinks Bitcoin is a great idea (or is persuaded of it by someone he trusts) and has four or five or six figures to throw at it, is likely to be unfamiliar with the community, and doesn't regularly send cash to strangers in the mail.  Someone with that much money is familiar with the courts and, this sort of thing answers the question they ask: "What's my recourse"?

Courts and juries don't know what the bitcoin-otc trust web is, and won't for a very long time.  They are very familiar with Adobe PDF however, since they use it daily.


Someone with $50k to throw at Bitcoins may dislike the idea of sending $50k to a complete stranger with no recourse if the coins aren't delivered.  This would bridge that gap.

I'd think John Doe would do a little due diligence. And if he thinks Bitcoin is a great idea, he surely understands the global, anonymous, and de-centralized nature that does not allow for typical recourse as if buying from Wal-Mart across the street. But hey, if there is a market for your signed PDFs, someone will likely do it. You can write up contracts for trading goldfish for jellybeans, or anything else. Will they be used, and can they be enforced is a different matter.

Just to make clear, I'm not selling anything.  I have nothing to do with signed PDFs other than I bought the USB stick and can sign them and think they're one very strong way to accelerate Bitcoin's earning the trust of the public.

One buys such a thing from here: http://www.entrust.net/adobe-cds-certificates.htm

As a non-technological substitute, one could always draft such a contract, print it, notarize it, and mail it.  It just adds 1 day to execute a trade.  You do more than 10 or 20 of these in a year, and you just paid the same as your Adobe key with all the overnight delivery fees.

Good Idea.  I think the PDF signing is overkill, but Good Idea.

Here's a bitcoin business I want somebody to create and run:  "Coin on a Stick"

You sell USB sticks containing Mac and Windows versions of the latest bitcoin (including the entire block chain) plus a wallet file containing N bitcoins.

Sell them via Ebay or PayPal, and ship them ONLY to a PayPal-verified address.

The buyer has to trust you not to double-spend the coins in the wallet, and has to wait for delivery of the physical USB stick.  But they don't have to download or install anything (they should be able to just run bitcoin from the stick and transfer the coins to themselves or a mybitcoin or mtgox account).

But, since you are sending a physical product to a verified address, you'll be treated as any other merchant selling real goods by PayPal or the credit card companies.

The idea of signed PDFs is interesting, but as gavin said, probably overkill for the moment. If there's some rich dude willing to put a five-digits amount on it, he'll probably find his way of doing it safely. Not to mention he probably wouldn't buy it all from one only person...

@Gavin, why would the seller in your scenario be anymore protected against paypal frauds than all others selling hard currency for paypal? Just the presence of a delivery address you think is enough?

I sense a level of doubt.


What do you have in mind?  Since the only ways now are to send cash into the ether, or wire money into the ether (from the perspective of a person unfamiliar with the community)... how do you answer "what's my recourse"?

To someone who indeed would be willing to put serious money on it, but who is not as familiar with computers and crypto like me, telling them "well, there's this forum you could go online and start posting messages and ruin their online reputation" is persuasive enough to get them to spend $200 (on the premise that they could just as well be gambling it in Las Vegas), but not $50k.

Many people will sell coins for cash/cashier's check in person, transfer on the spot - that would be an option for your rich man.

There is a list that has decent global coverage of people willing to do that. Don't tell me it's too inconvenient for your rich guy, or that he won't spend 200$ on a plane ticket to NYC to spend 50k USD on coins safely.

Yes, the delivery address and the fact that you're selling a physical product (the USB stick).

Kind of like how you used to be able to buy cheap OEM copies of software but they had to ship a token piece of hardware in the box so they could say they were hardware vendors...  (actually, can you still do that any more?)

Would he spend 2 days traveling to execute the transaction though?  Rich guys by definition have lots of money on their hands.  Time to blow on executing a transaction, maybe not so much.  And a trip to NYC planned at the last minute say from where I live (Utah) would be more like $1000, given the likely need to stay overnight, and how much it costs to purchase last minute travel.  Transacting via FedEx Overnight seems so much more economical...

Can you give the link to the list you mention though?

This too is a great idea...I'd be scared to do it myself, perhaps except for very small amounts that would be great as introductions to BC or as gifts.

The OEM requirement for software is a contractual requirement imposed by the vendor (Microsoft etc.).

On the other hand, if PayPal or the credit cards don't like what you do, they have no shame in yanking your money out of your own bank account without so much as asking if you care.  You would hope not to cross the price threshold where they begin see a "stick with coins" as being more about the coins than the stick.  I wonder if I sold a wallet full of Euro notes on eBay, how they'd look at it.

the google spreadsheet link appears to be down, but the list is linked off bitcoinme.com - you can check there.

+1

Sounds like an excellent mall kiosk business - cash only, and the ATMs are right there...

I'll take payment in BTC to run security.   ;D

All this has been hashed over and long since sorted out.

e-gold debuted in '96. Since then a great network of cashiers has been developed.

People regularly move large sums through established escrow services and exchangers. For example, WebMoney is a many many thousands of times larger than bitcoin but has the exact same fundamental security issues.

There is no problem to send a bank wire, or deposit cash at the counter. There are several other secure value communication vectors, some slow, some cheap, others not. Credit cards and Paypal do NOT work.

Hawala is well integrated into digital currency and settlement of huge values is trivial through bullion banks such as Anglo Far East. There are several other non-reversible currencies, well matured and well trusted that can be traded instantly for bitcoin without risk.

You guys don't realize this has all been done before and the solutions have been long tested. The pitfalls and the scams are the same as they have always been. Sure, the peer to peer nature of bitcoin is novel, but the channels to liquidity are exactly the same as all the other non-reversing digital currencies.

e-Bullion offered the crypto hardware to protect user accounts almost 10 years ago. e-gold could be spent through a cell phone almost 15 years ago. The concept of internet money is not new. Bitcoin was developed from this body of knowledge. It's a progression rather than a completely new invention.

It's only now that the major exchangers are starting to pick up bitcoin. For example GoldNow is about 12 years running, Nanaimo Gold is over 7. There are dozens more major internet cashiers that might yet pick up bitcoin. But that does not matter when you can safely trade any of these non-reversible digital currencies instantly in or out of bitcoin.

So your chosen exchanger does not support bitcoin? Buy some Pex or LR and trade that in and out of bitcoin. Once you have real on-line cash, it's no big deal to trade it for another flavour.

I like Gavin's idea much better than some proprietary PDF certificate which seems to be some sort of weirdness, which people will probably perceive as even more geeky than bitcoin.

this is what safeorscam.com is for, exchangers are already on it

the PPD usb stick is a good idea. convince a 7-11 or gas station to carry it :)
or print out cards with a code, an exchanger somewhere then funds your account with BTC.

if i can take BTC codes for orders that would be awesome + 1

also post offices around the world are looking for new revenue, canada post especially. somebody sell BTC cards to them. existing voucher systems like Ukash or Paysafecards are full of bullshit rules and fees

Proprietary how?  This has been a standard builtin feature of Acrobat for at least 4 major releases. It is no geekier than using https to secure your web browsing.

Adobe probably keeps your private key lying around their database ready to hand over to authorities at a moments notice. Also you can easily obtain fraudulent pdf certs they are for sale on every carding forum.

Exchangers build reputation on forums, safeorscam and word of mouth for successful transactions.

Safe escrow like what Exchangezone.com uses is the best idea for large transactions, but who's to say they won't disappear one day and take all the escrow with them

Adobe (or the CA rather) sends you a 3rd party hardware module they didnt create that generates its own keypair and then you submit a CSR and the CA signs it after the fact just like SSL.  You could buy your own crypto module all the same if you didn't trust theirs, they are very generic, and arrive blank.  (safeNet Rainbow iKey).

No one not adobe nor even the CA ever sees or possesses your private key, it doesn't exist until you generate it yourself.  Though I am very interested in learning about how one might obtain a fake cert that Acrobat trusts. (obviously anyone can self sign a cert... Just like with SSL it won't be trusted). Absent proof, I consider it FUD