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Author Topic: Fractional Escrow: A way to end paypal fraud  (Read 762 times)
AntiVigilante
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June 07, 2011, 01:55:25 AM
 #1

Think of friction. You have static friction and dynamic friction.

Based on the risk (successful tx / total tx) for a given payment method, someone trying to trade should have in escrow:

dynamic risk = past experience
static risk = risk with reduced participation of scammers
reserve = escrow amount

reserve * dynamic risk * static risk / dynamic risk * user risk for a given rating

There are a few scenarios of scamming:

They don't actually have BTCs. Problem solved.
They don't send BTCs. Escrow awarded.
They don't actually have dollars. This is least likely because no one would send to an unrated user who doesn't put out the cash.
They don't send dollars. Chargeback immediately results in non-reversible escrow award. Never allow the chargeback until BTCs are returned.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
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June 07, 2011, 02:37:41 AM
 #2

Make it happen.  There are numerous posts in the marketplace in the last few days of people wanting to buy BTC with paypal.

There has to be a better solution than the six days it takes for $  >> dowalla  >> Mt Gox  >>  BTC

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