Chargeback in Bitcoin, good or bad?

[sana54210]

If chargeback is to be done it should be under a centralized system to monitor it and give it a fair dispute as a third person, I think Bitcoin is the best as it is right now, people can use escrow to avoid any scams

In case of PayPal chargebacks, even an Escrow cannot help as a chargeback can occur till 180 days of the transaction. Chargebacks of gift cards also cannot be handled by an Escrow. Escrow only helps to complete a transaction and he cannot help if there is a chargedback later whether bitcoins/PP or any other payment processor.

It is always best to use escrow when doing business with bitcoins, have an agreement which  buyer/seller/ escrow mutually agree on, upon the satisfaction of buyer and seller in accordance with agreement, the escrow releases to the buyer and seller fairly

[crazyivan]

It would be very good trait, if it would be possible to implement it. It would be a very powerful weapon against scams and ponzies. But I do not think this is doable.

[BitcoinPenny]

But this 'no chargeback' feature will be hard to accept for masses of people in the future.

Agree. The "no chargeback" feature might scare some/most people away from adopting bitcoin. They know bitcoin is a digital currency, and they know that transactions using Visa/Mastercard/PayPal require digital processing, so they'll automatically equate bitcoin to Visa/Mastercard/PayPal including the standard security feautures like chargebacks. In that way, it makes perfect sense for people to expect that bitcoin should have chargeback services.

Unfortunately, bitcoin is more like digital cash and not digital processing (of Visa/Mastercard/PayPal), so cash rules apply. And with cash, there's no chargeback feature. If you buy something with cash, unless you get a signed receipt, it's your word against his/her word. No chargebacks.

In other words (forgive my rambling reply), we don't need to build a chargeback feature into the bitcoin technology, we simply need to teach people to treat bitcoin like cash. Same rules apply. Easy to understand. No need for chargeback.

But I could be wrong. Often am.

Regards,
Me

[WhatTheGox]

We all know that chargebacks are useful for limiting scams. Say: you buy something online on eBay with PayPal and the seller won't ship it to you, PayPal will take funds from the sellers. account and gives you back the money.

This improves the eBay economy and credibility, because people know that their risk factor is very little and are more willing to purchase items from uncertain shops/sellers.

With Bitcoin you are always afraid to sell your coins because if you do it, you lose it forever. I understand that Bitcoin is designed for responsible users in mind.

But this 'no chargeback' feature will be hard to accept for masses of people in the future. I know that it is possible to modify bitcoin and add chargeback functionality: but is it needed?

Bitcoin gives the choice of both systems, those who want charge protection can exchange within centralized 3rd party systems.  Those who want to remain outside and "take the risk" + save the cost of 3rd party, can do.

[Cryddit]

Unfortunately, bitcoin is more like digital cash and not digital processing (of Visa/Mastercard/PayPal), so cash rules apply. And with cash, there's no chargeback feature. If you buy something with cash, unless you get a signed receipt, it's your word against his/her word. No chargebacks.

Any non-anonymous address serves as a receipt for Bitcoin; Everybody can read the block chain and see that the payment was made. 

[BitcoinPenny]

Unfortunately, bitcoin is more like digital cash and not digital processing (of Visa/Mastercard/PayPal), so cash rules apply. And with cash, there's no chargeback feature. If you buy something with cash, unless you get a signed receipt, it's your word against his/her word. No chargebacks.

Any non-anonymous address serves as a receipt for Bitcoin; Everybody can read the block chain and see that the payment was made. 

Yes, non-anonymous address. (Like a known address for Gap.com, or something.) But not for anonymous addresses. (Like the address for the guy you met from Craigslist who's selling you the stolen iPhone 5s.) With the anonymous address, you can prove the payment was made, but not to whom. (As in the "cash rules" / Craigslist example.)

Me

[Hydros]

I don't think its needed and chargebacks have fucked me over multiple times. What is needed is an trusted escrow for p2p trades, not the ability to chargeback, which causes a multitude of other problems.

[philipma1957]

we want btc to be chargeback free.

It was designed that way.  If a btc holder has a doubt they need to use escrow.

The entire creation of this product revolves around it.

[jl2012]

But this 'no chargeback' feature will be hard to accept for masses of people in the future.

Agree. The "no chargeback" feature might scare some/most people away from adopting bitcoin. They know bitcoin is a digital currency, and they know that transactions using Visa/Mastercard/PayPal require digital processing, so they'll automatically equate bitcoin to Visa/Mastercard/PayPal including the standard security feautures like chargebacks. In that way, it makes perfect sense for people to expect that bitcoin should have chargeback services.

What you are asking for is not "chargeback". It's a trusted arbitrator. VISA/MC/PP are just trusted arbitrators. There is nothing to prohibit people to use bitcoin through a trusted arbitrator.

[avatar_kiyoshi]

What the reason I used bitcoin is because no chargeback.
People need give more knowledge about escrow, make you feels good to purchase/transactions.

[funkenstein]

If you need to enable chargebacks, you need escrow.  Consider a trustless escrow using multisig, such as done by 2crow.org.

[Kprawn]

Chargebacks are good for scammers... not for Bitcoin. Most merchants avoid it, or put delays on orders, to prevent chargebacks.

To implement it on the protocol level, would be wrong... but if a 3rd party implement it, they can give you the choice to have chargebacks or not... they will obviously charge you a fee for that, as they will offer this as a extra feature.

So there is no need to bother with the protocol. 

There are many other reasons why people and merchants will decide to use Bitcoins, and having no built in "chargeback" option, would not change their mind not to use it. 

[Vanity]

While some (end users) might see not having chargebacks as a negative trait, I somehow feel that they're mostly used to scam people out of their money in the first place...

[Snail2]

Chargebacks are proven to be important features for scammers on Paypal. Such a function in bitcoin would make things worse than today.

[crazyivan]

Chargebacks are proven to be important features for scammers on Paypal. Such a function in bitcoin would make things worse than today.

There s no point in discussing this. For chargebacks, you need some kind of central authority to monitor this. BTC does not have so its not possible to implement this.

[Lorenzo]

We all know that chargebacks are useful for limiting scams. Say: you buy something online on eBay with PayPal and the seller won't ship it to you, PayPal will take funds from the sellers. account and gives you back the money.

This improves the eBay economy and credibility, because people know that their risk factor is very little and are more willing to purchase items from uncertain shops/sellers.

With Bitcoin you are always afraid to sell your coins because if you do it, you lose it forever. I understand that Bitcoin is designed for responsible users in mind.

But this 'no chargeback' feature will be hard to accept for masses of people in the future. I know that it is possible to modify bitcoin and add chargeback functionality: but is it needed?

The fact that Bitcoin lacks chargebacks doesn't strike me as being a particularly positive or negative thing. At most, it's a double edged sword and a necessary consequence of how Bitcoin works differently compared to established systems.

Unlike national fiat currencies which are controlled by a network of banks, credit card companies, and payment processing companies, Bitcoin does not require a trusted third party to process transactions (which is in itself is actually a huge positive for Bitcoin). While it does mean that payments to scammers can't be reversed by an authority that would oversee such matters, it also means that the responsibility of the trade is on the buyer rather than the seller. This changes the dynamics of the buyer-seller relationship and encourages buyers who engage in trades to do their research beforehand before sending their coins.

Now is that really a bad thing? I don't think so.

Related article:

http://blog.oleganza.com/post/51063547201/no-chargebacks-is-not-a-problem-for-bitcoin

[ensurance982]

We all know that chargebacks are useful for limiting scams. Say: you buy something online on eBay with PayPal and the seller won't ship it to you, PayPal will take funds from the sellers. account and gives you back the money.

This improves the eBay economy and credibility, because people know that their risk factor is very little and are more willing to purchase items from uncertain shops/sellers.

With Bitcoin you are always afraid to sell your coins because if you do it, you lose it forever. I understand that Bitcoin is designed for responsible users in mind.

But this 'no chargeback' feature will be hard to accept for masses of people in the future. I know that it is possible to modify bitcoin and add chargeback functionality: but is it needed?

Bitcoin is the core technology, the core protocol. If chargebacks were possible, don't you see a *ton* of other (possibly more) problems? Who would buy BTC from someone anymore? Who's to decide when a chargeback should be executed?
Bitcoin's non-reversibility and fungibility are one of its most important features and always will be!

[Q7]

Why do we need a chargeback feature in the first place? I had a bad experience once as a seller when I lost my item and the fund, so in this scenario why should we consider adopting a flawed system? If it involves a large transaction, the only way is to use escrow.

[ensurance982]

Why do we need a chargeback feature in the first place? I had a bad experience once as a seller when I lost my item and the fund, so in this scenario why should we consider adopting a flawed system? If it involves a large transaction, the only way is to use escrow.

Exactly, but I have to add: Another feature that strongly minimizes the occurrences or risks of scams and frauds already exists: multi-sig addresses. If the deal goes bust or a party disappears, the worst case would be that the coins were lost forever - so there's *far less* incentive to scam people in the first place!

[TookDk]

I believe that we in the future need to rethink how we sell goods online.
I see digital currency to have a great potential.

A great way to construct a online market place would be to use multisignature, the "ebay" generate a payment address, where:
The seller will have a private key, the buyer will have a private key and the "ebay" will have a private key.

Once the buyer have received the goods and verified that everything is as described, then will he release his private key to the seller and he can redraw the funds.
If a dispute happens then, can the seller release his private key to the buyer to issue a refund.
If buyer and seller cannot agree, then will the "ebay" need to arbitrate, he can take the seller or the buyers side after being presented with the evidence, and release the 3rd key to what every party he believe should have the funds.