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Author Topic: Bitcoin Transactions Too Easy To Get Robbed?  (Read 1495 times)
bonker
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June 24, 2011, 04:46:22 PM
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I was thinking, I love bitcoin - its a great way to do business. But a problem I see with it is the fact that its so easy to get robbed. I mean, you buy some goods with bitcoin over the net, send the BC and nothing arrives... waddya do? At least with cash you have a chance to bash the guy or see the goods and with paypal you get chargeback and reputation.

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June 24, 2011, 04:53:24 PM
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thats why we will need bit coin banks if we want to get far, if you had a deposit of bitcoins in the bank and you could ask the bank to charge it back from the recievers bank account in case the money was sent from account to account

directly transfering bit coins with the client is like paying with paper money, if the one who gets it runs away with it, you can't get it back
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June 24, 2011, 04:54:09 PM
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I was thinking, I love bitcoin - its a great way to do business. But a problem I see with it is the fact that its so easy to get robbed. I mean, you buy some goods with bitcoin over the net, send the BC and nothing arrives... waddya do? At least with cash you have a chance to bash the guy or see the goods and with paypal you get chargeback and reputation.

Your assessment is right.  The same goes with credit cards.  You are paying a hidden fee for an extra service which is being charged to the merchant and which benefits the buyer.  And I, admittedly, enjoy using credit cards for that reason to merchants that will accept them (and never use debit cards).

It is very possible that one day some company will offer these services.  The problem isn't with Bitcoin, the problem is that these services do not yet exist for Bitcoin.  The ability to charge back is part of the service offerings of PayPal etc., and isn't inherent in the dollar itself.


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June 24, 2011, 05:03:58 PM
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I was thinking, I love bitcoin - its a great way to do business. But a problem I see with it is the fact that its so easy to get robbed. I mean, you buy some goods with bitcoin over the net, send the BC and nothing arrives... waddya do? At least with cash you have a chance to bash the guy or see the goods and with paypal you get chargeback and reputation.

A transaction isn't that sort of thing, it would be like "yellow submarine" by the Beatles not arriving. You could just send it again, it's a bit of data.

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June 24, 2011, 05:04:48 PM
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Doesn't ClearCoin solve this problem?  Hopefully someone will take that over for Gavin.
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June 24, 2011, 05:06:57 PM
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I was thinking, I love bitcoin - its a great way to do business. But a problem I see with it is the fact that its so easy to get robbed. I mean, you buy some goods with bitcoin over the net, send the BC and nothing arrives... waddya do? At least with cash you have a chance to bash the guy or see the goods and with paypal you get chargeback and reputation.

https://clearcoin.appspot.com/
bonker
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June 24, 2011, 05:11:22 PM
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I was thinking, I love bitcoin - its a great way to do business. But a problem I see with it is the fact that its so easy to get robbed. I mean, you buy some goods with bitcoin over the net, send the BC and nothing arrives... waddya do? At least with cash you have a chance to bash the guy or see the goods and with paypal you get chargeback and reputation.

Your assessment is right.  The same goes with credit cards.  You are paying a hidden fee for an extra service which is being charged to the merchant and which benefits the buyer.  And I, admittedly, enjoy using credit cards for that reason to merchants that will accept them (and never use debit cards).

It is very possible that one day some company will offer these services.  The problem isn't with Bitcoin, the problem is that these services do not yet exist for Bitcoin.  The ability to charge back is part of the service offerings of PayPal etc., and isn't inherent in the dollar itself.



True, I agree. But I suppose if you introduce a bank or middleman, you loose the anonymity and peer to peer nature of the transaction. That's a shame.
Maybe a group escrow or validation system could be introduced? Hmmm


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June 24, 2011, 06:11:13 PM
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Send BC and nothing arrives? That would mean either a severe bug in the code, or your pc has been infected with some malware that changes the destination to the hackers address.
Anyway, you can see where your money went with blockexplorer.

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June 24, 2011, 06:15:41 PM
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The problem isn't with Bitcoin, the problem is that these services do not yet exist for Bitcoin.  The ability to charge back is part of the service offerings of PayPal etc., and isn't inherent in the dollar itself.



Bingo. The framework of Bitcoin proper allows for what's on par with a bank wire- you give someone your wallet address instead of your routing number and account number for a basically irreversible transfer. Both are obviously not the most convenient. A credit-card like company that establishes a point of sale network with merchants and issues cards which pay in bitcoins would address most of these issues. The fee charged could be small especially if the cards function more as debit cards and the company would guarantee the merchant gets paid. This would allows for immediate POS transactions and get around the time for bitcoin network verifications.
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June 24, 2011, 06:20:18 PM
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How does clearcoin protect the seller, if the buyer chooses the option to return to self not charity?

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CurbsideProphet
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June 24, 2011, 06:22:42 PM
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Send BC and nothing arrives? That would mean either a severe bug in the code, or your pc has been infected with some malware that changes the destination to the hackers address.
Anyway, you can see where your money went with blockexplorer.

The OP is talking about making purchases with bitcoin.  For example, I sell you a watch for 20 BTC's.  You send me 20 BTC's.  I don't ship your watch.  Since I'm anonymous, what recourse do you have?

Had we made the same transaction under a credit card or paypal, you could file a dispute and likely get your money (or in this case BTC's) back. 

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June 24, 2011, 06:51:08 PM
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How does clearcoin protect the seller, if the buyer chooses the option to return to self not charity?

It doesn't.  The charity option isn't ideal either.  Another option is to pass the coin to a mediation service that will look at each case individually.  For the majority of transactions you would probably rely on reputation. 

I would definitely rather rely on reputation on ebay than pay the extortionate fees but you don't get the choice.
bonker
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June 24, 2011, 10:22:32 PM
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I've got a solution... we use an anonymous crowd escrow. Just wacking out the details and I'll get back to y'all.

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June 25, 2011, 12:26:36 AM
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I've got a solution... we use an anonymous crowd escrow. Just wacking out the details and I'll get back to y'all.

I will break it with Sybil attack. Try again!
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June 25, 2011, 01:37:41 AM
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I never worried about getting robbed when I pay cash in most stores. I don't worry about being scammed at any brick and mortar business. I also don't worry about most online businesses if they are reputable (even if I have fraud protection from my cc). I wouldn't need fraud protection if credit cards weren't so easy to use by someone else.

The common thread is I trust most merchants. They honestly have more to lose if they scam you. A merchant prospers or falters by it's reputation. Bad reviews, word of mouth, and poor business practices are a death sentence for a merchant. It is why mtgox is working so hard to get everything back to business as usual because his reputation depends on it.. Sure he could have run off with everyone's money, but he stands to make far more if he stays in business and rebuilds trust.

We need more merchants that take bitcoin because it will instill more trust in the currency.

For person to person transactions bitcoin is very risky. The anonymity of bitcoin is exactly what encourages and facilitates an easy rip-off. This really is why we need a good escrow service and/or a widespread easy reputation tracker.
bonker
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June 25, 2011, 07:26:41 AM
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I never worried about getting robbed when I pay cash in most stores. I don't worry about being scammed at any brick and mortar business. I also don't worry about most online businesses if they are reputable (even if I have fraud protection from my cc). I wouldn't need fraud protection if credit cards weren't so easy to use by someone else.

The common thread is I trust most merchants. They honestly have more to lose if they scam you. A merchant prospers or falters by it's reputation. Bad reviews, word of mouth, and poor business practices are a death sentence for a merchant. It is why mtgox is working so hard to get everything back to business as usual because his reputation depends on it.. Sure he could have run off with everyone's money, but he stands to make far more if he stays in business and rebuilds trust.

We need more merchants that take bitcoin because it will instill more trust in the currency.

For person to person transactions bitcoin is very risky. The anonymity of bitcoin is exactly what encourages and facilitates an easy rip-off. This really is why we need a good escrow service and/or a widespread easy reputation tracker.

I would agree, but in cash transfers I can physically resist being robbed to an extent and I can see their face. Bitcoins are like posting cash a. I mean I wouldn't buy anything by mailing cash, and bitcoin is the same.

By introducing escrows, your back to square one with the government regulating these escrows. In short, bitcoin is no real advance at all.

BTC: 1FU1EX4xCEt26rezoNaEZ1rhbqA4VVP8pq
LTC: Li8UYJprncRwmNzvRs53UG714Lcps2Yy8R
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