Chargeback in Bitcoin, good or bad?

[randy8777]

one of the reasons many people use bitcoin is that there are no charge backs. let's keep it like this. enabling charge backs won't prevent scams. scammers will use it to scam even more.

[ensurance982]

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.

Well that's already available. It's even built-into the core protocol of Bitcoin itself! This is called multi-sig, and the biggest advantage of it is that the worst that may happen is that the coins are lost forever! There's inherently less incentive to scam!

[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.

Well that's already available. It's even built-into the core protocol of Bitcoin itself! This is called multi-sig, and the biggest advantage of it is that the worst that may happen is that the coins are lost forever! There's inherently less incentive to scam!

Exactly my point.

Next step is that people start  to use it, and online market places start to implement it.

Edit: I must admit, I am not too comfortable using multi-sig, since I have little experience with it, I still feel most comfortable with good old escrow transaction, but I hope that will change in the future.
But remember bitcoin is basically one big test project.

[ShetKid]

Sounds like an impossible things to do. Bitcoin cannot be reversed, because there is no fees.  If a chargeback is initiated, there will have to be an escrow who would monitor and find out who should win the dispute, and unlike paypal there isn't someone to pay them, so its simply not possible.

[yayayo]

the good thing with bitcoin is: you can add chargeback option ON TOP of bitcoin. no problem. you choose which service you want to create.

No chargebacks is a feature of bitcoin. No need to add a chargeback option into the Bitcoin protocol. A third party marketplace site can implement chargeback or use an escrow.

one of the reasons many people use bitcoin is that there are no charge backs. let's keep it like this. enabling charge backs won't prevent scams. scammers will use it to scam even more.

These quotes sum up my opinion. People need to grow up and take responsibility for their decisions. The free market will provide services (escrow, insurance) for the anxious for an extra fee.

(It seems weird to me that the thread starter advocates for chargebacks, but his avatar at the same time criticizes government intervention. You can't have freedom and a nanny state both at the same time.)

Also, it's up to you how much money you want to risk on a transaction. So you can scale your risk.

ya.ya.yo!

[Muhammed Zakir]

I don't think we could modify Bitcoin protocol to enable chargeback. However, we can have a centralized authority who have 51%(+) hash rate of total hash power, pay a small fee and let them do the chargeback. You don't want to run that all day. Wait for x orders for x days and do it.

To OP's question: Not bad but worst.

[franky1]

chargebacks are not a feature of any money..
not banknotes, not gold, not coins and certainly not bitcoin. nor should it ever be.

however escrow services that store money on behalf of people, EG banks, paypal, gold investment companies. they are the chargeback services.

the bank accounts we all have are not safety deposit boxes of bank notes or gold, coins. they are just separate databases of balances to represent what someone has and these services can change the balances at will.

bitcoin protocol itself does not need any "chargeback" coding, but the feature can be implemented at the businesss service level via offchain transactions within the businesses offchain database of customers balances.

in short. programming bitcoin protocol to void transactions is a recipe for scammy disasters. but webwallets that use offchain balance databases can impliment their own service under the pretense of consumer protection.

[BitUsher]

We do not need chargebacks in bitcoin core protocol as that can be added in as a feature and people are already working on much better versions of the chargebacks with automated arbitration systems , trust systems , and ricardian contracts.

[findftp]

the good thing with bitcoin is: you can add chargeback option ON TOP of bitcoin. no problem. you choose which service you want to create.

I immediately think about some insurance system.
You pay x% on top of your product to have the service of possible chargebacks.
Sounds good to me.
Let the market decide if it wants it.

[Oscilson]

No chargebacks is a feature of bitcoin. No need to add a chargeback option into the Bitcoin protocol. A third party marketplace site can implement chargeback or use an escrow.

Yes. Paypal can act as escrow, it can charge back as it does with fiat.

[franky1]

the good thing with bitcoin is: you can add chargeback option ON TOP of bitcoin. no problem. you choose which service you want to create.

I immediately think about some insurance system.
You pay x% on top of your product to have the service of possible chargebacks.
Sounds good to me.
Let the market decide if it wants it.

the market has decided.. thats why people prefer the convenience of paypal and banks, instead of using bank notes.

the future of consumer friendly (non-geek) bitcoins will be in the third party services. the blockchain protocol does not need to change.
the problem is that third party services can become as corrupt as the fiat system. so although blockchain protocols do not need to change and regulations of the blockchain do not need to be implemented.. regulations of businesses do..

lets just hope the regulations are not corrupt.... oh wait.. it seems new york regulations might turn out to be corrupt.. lets wait and see

[jonald_fyookball]

I don't think we could modify Bitcoin protocol to enable chargeback. However, we can have a centralized authority who have 51%(+) hash rate of total hash power, pay a small fee and let them do the chargeback. You don't want to run that all day. Wait for x orders for x days and do it.

To OP's question: Not bad but worst.

avoiding central authorities was the whole point of bitcoin to begin with.  So yes i agree that would be the worst idea.

chargebacks by definition, rely on central authorities...why are we even discussing this?

[crazyivan]

I don't think we could modify Bitcoin protocol to enable chargeback. However, we can have a centralized authority who have 51%(+) hash rate of total hash power, pay a small fee and let them do the chargeback. You don't want to run that all day. Wait for x orders for x days and do it.

To OP's question: Not bad but worst.

avoiding central authorities was the whole point of bitcoin to begin with.  So yes i agree that would be the worst idea.

chargebacks by definition, rely on central authorities...why are we even discussing this?

Because avoiding central authorities means attracting thousands of scammers and ponzi operators. What are we going to do about them? Has this industry been designed for them, so they can scam people?

[jaberwock]

We all know that chargebacks are useful for  scams. Say: you buy someBTC online with PayPal and the seller  send it to you, PayPal will take funds from the buyers account and gives you back the money.  So the seller will remain with the money and with coins.

Or the seller send you some bricks instead of your ps4 and Paypal will deny the chargeback.



And if the goal is to do something that other services do, why waste time developing BTC?

[jonald_fyookball]

I don't think we could modify Bitcoin protocol to enable chargeback. However, we can have a centralized authority who have 51%(+) hash rate of total hash power, pay a small fee and let them do the chargeback. You don't want to run that all day. Wait for x orders for x days and do it.

To OP's question: Not bad but worst.

avoiding central authorities was the whole point of bitcoin to begin with.  So yes i agree that would be the worst idea.

chargebacks by definition, rely on central authorities...why are we even discussing this?

Because avoiding central authorities means attracting thousands of scammers and ponzi operators. What are we going to do about them? Has this industry been designed for them, so they can scam people?

You can still have regulation without changing the core protocol (exchanges should be lisenced -- not a bad idea)
which should hopefully mitigate fly-by-night operations. 

[wadili89]

i have faced some even alot wrong charge back, clients get their stuff done and make change back and saying they made the payment by mistake and paypal is very stupid to give then refund , so i dont support change back

[MicroGuy]

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?

It's coming. The bitcoin foundation will probably figure out a way to implement this feature.

[tss]

Spammers in bitcointalk.  Good or bad for the community? 

this chargeback topic has been discussed at length at least 100 times.  Back in the day i was a member of another forum and if something has been discussed ad nauseum instead of discussing again you would be directed to use search. 

Thanks hazir for another great nonsense subject to earn the lot of you some satoshis.

[Cryddit]

The problem with chargeback is that someone has to make the decision about whether to do/allow it, and both of the parties involved are self-interested.  If there were agreement, then there is no problem; the "chargeback" is just another mutually-consenting transaction.  If there is disagreement, then you need someone to decide.

So, any protocol that permits chargebacks must involve a third party whose decision about the chargeback can screw over either the payee or the payer.  And people don't want to negotiate an arbitrator or escrow for every fricking online purchase of a watch.  

What *could* be done in protocol I suppose is for someone to establish "superior claim" on a set of coins and then let people use inferior claims on them to make transactions. When there is a dispute, the person with the superior claim can just invalidate the inferior claim held by the disputant whom *THEY* hold to be at fault, and issue a new inferior claim to the complainant (or the defendant, as the case may be).  

If people want the "safety" of something that courts can seize and redistribute according to the judgements, there is a way to give some agency power over particular assets, without requiring that such power be granted over any other asset.  But it would by definition be a "Trusted" agency - meaning one that can completely screw the security of those assets.  The only benefit of this is that it could be done, for example, to make legal compliance possible where needed, while not impairing the ability of people to trade in assets that *AREN'T* inferior claims.

So you could have, for example, a decentralized stock market, where all the traders are trading digital stock certificates which are inferior claims on stocks where the corresponding superior claims are held by the SEC or other regulatory agency.  So if the SEC really needs to step in and sieze the assets because Bernie Madoff or something, it can exercise the superior claim.

Or if a bunch of merchants can be convinced to accept inferior claims on bitcoins as payment, you could have a bank or other agency which owns the superior claim on money that's in an "account" so they could authorize and unilaterally implement chargebacks against merchants who get the inferior claim in payment.  

It is an interesting but solvable cryptographic problem, although it is not at all clear that the result would be any improvement over fiat.  

[MicroGuy]

The problem with chargeback is that someone has to make the decision about whether to do/allow it, and both of the parties involved are self-interested.  If there were agreement, then there is no problem; the "chargeback" is just another mutually-consenting transaction.  If there is disagreement, then you need someone to decide.

I think the bitcoin foundation is probably the best to arbitrate these reversals. A buyer would simply open a chargeback case and if the claim were approved the CSR would send Gavin a note to reverse the transaction using his bitcoin master-key.