I've been brainstorming for some time about a business that would provide escrow and arbitration services while helping people stay anonymous. It's very much in the vaporware stage at the moment. For now I'm calling it A-Bay, though I'm sure it will need another name.
A-Bay addresses an age-old problem, made all the more severe in the anonymous environment of bitcoin: suppose Alice wants to buy some Alpaca socks from Bob. If she pays in advance, how can she be sure Bob will deliver the socks? On the other hand, if Bob ships the socks first, how can he be sure Alice will pay? In most cases Alice must prepay, and therefore she limits herself to sock merchants that she can trust. This means she can't shop around too much, because there are only so many trustworthy sock merchants.
The basic proposal is for Alice and Bob to choose an escrow service that they both trust. Alice will send payment to the escrow service, who will forward it to Bob only after he delivers the socks. The challenge is for A-Bay to build up such a good reputation as an escrow service that nearly all buyers and sellers trust them. Then Alice can shop around, considering any and all sock merchants who have a good price, regardless of reputation, provided only that they are willing to use A-Bay. Simply put, people trust A-Bay so that they don't have to trust anyone else.
Actually, I want A-Bay to offer more than just escrow service. It should provide arbitration in the event of a dispute. Also, it should help people stay anonymous, including A-Bay personnel themselves; this makes buyers and sellers more comfortable, it reduces arbitrator bias, and it keeps escrow agents from becoming targets for theft.
A-Bay's escrow agents and arbitrators need to be highly trusted, yet they need to remain anonymous. This sounds like a contradiction! My solution is to introduce one more A-Bay role: ambassador. Only ambassadors have known identities; all others (buyers, sellers, escrow agents and arbitrators) remain anonymous. In fact, an ambassador is someone who is trusted precisely because of who he is. Some examples of possible ambassadors are Stefan Molyneux, Claire Wolfe and Brad Spangler. You don't have to agree with everything these people write. (I certainly don't.) You just have to be confident that they are moral, responsible people who won't rip you off.
An ambassador's primary reponsibility is to recommend brokers, typically 3 of them. These should be people the ambassador has known for years, in whom he has complete confidence. The brokers remain anonymous. Essentially, the ambassador is saying, "Here are the email addresses and public keys of 3 people that I trust implicitly. I'm not going to reveal their identities, but I can assure you that they will treat your contract with the utmost fairness and discretion." Brokers in turn recommend escrow agents and arbitrators.
The reason for the extra level of indirection (between ambassadors and brokers) is so that ambassadors are not directly involved in any contracts. They are the ones with known identities, so certain evil people might try to coerce them into revealing information. This way, ambassadors can honestly say, "I have no information about any specific contracts."
To protect ambassadors further, A-Bay can have lots of ambassadors, say 20 of them. Each one recommends 3 brokers, yielding a list of 60 email addresses and public keys. This list is shuffled, so that each ambassador knows his 3 brokers are in the list somewhere, but he doesn't know which ones. That way, if an evil person tries to coerce the ambassador into revealing the identity of a particular broker, the ambassador can honestly say, "The broker you used is not necessarily one of the 3 I recommended. In fact, the odds are against it."
The main criticism of A-Bay is that it introduces a lot of overhead. This is true! As a rule of thumb, I would expect overhead of around $20 per contract. This means the contract amount needs to be large, say at least $400. Otherwise, the overhead becomes prohibitive.
There's a lot more to say, but I'll wrap up this introduction for now. See this presentation
for more information. I'm looking for people to help me flesh out the details. Please PM me if interested. Thanks.