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Author Topic: Bitcoin Escrow/MiddleMan Service?  (Read 1811 times)
MiddleMan
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August 02, 2011, 02:13:30 AM
 #1

Greetings, my name is MiddleMan. I'm new to this forum, but I'd like to make a great impression - by offering a Escrow/MiddleMan service. I'm just curious if any Bitcoin users would be interested in using this type of service.

Of course I would start off small, and gradually gain reputation for larger payments. Hopefully building a fully functional website, or even a 24 hours per day, 7 days a week service (I would hire close friends, or trusted members of this community).

First off, this is how the trades would work. There would be a 2% fee on every transaction (when the website is up, there will just be a very small fee). The buyer would send me the Bitcoin(s), then the seller will send the item/exchanged money to the buyer. The buyer will then verify that he has received the item/exchanged money. I will then release the Bitcoin(s) to the seller.

Now your probably wondering how I will prevent fraud, as the buyer could easily say he didn't receive the item. Here is how; I will verify that if it is a physical item, that the seller provides a shipping number (if not received within 72 hours, the money is returned to the buyer). If the physical item is worth more than 10 Bitcoins, then I will verify with the seller the weight, height, and width of the item. As well verify with the shipping company the matching weight, height and width of the item (by phone).

If you were wanting to exchange Bitcoin(s) for another currency, then I will prevent fraud by checking that the seller has sent the currency (either through Teamviewer* or ask for a screenshot).

*Teamviewer is a remote desktop access, in which allows me to view the desktop of a user live. It is a renowned product with a great reputation.

So Bitcoin community...

What do you think?
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JoelKatz
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August 02, 2011, 02:19:10 AM
 #2

Consider:

1) The item is a diamond ring. The buyer says he opened the package, it was empty, and he refused it. The seller says he shipped the ring and got back an empty, opened box. What do you do?

2) The item is bitcoins. You know the seller shipped the bitcoins. The buyer claims the payment (PayPal, credit card, whatever) was unauthorized. What do you do?

If you don't solve the actual problems, what am I paying you 2% for?

I am an employee of Ripple.
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MiddleMan
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August 02, 2011, 02:29:45 AM
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Consider:

1) The item is a diamond ring. The buyer says he opened the package, it was empty, and he refused it. The seller says he shipped the ring and got back an empty, opened box. What do you do?

2) The item is bitcoins. You know the seller shipped the bitcoins. The buyer claims the payment (PayPal, credit card, whatever) was unauthorized. What do you do?

If you don't solve the actual problems, what am I paying you 2% for?

Hey Joel,

First of all, we would contact each party and try to come to a resolution. If it doesn't work, then we will investigate the case and freeze the Bitcoins until it has been settled. Since a diamond ring can be expensive, we will require anything over $250 to be submitted. The submission process will require the buyer's first/last name, and address. As well as the seller's first/last name and address. If it isn't settled through our investigating process, then we will contact Bitcoin Forum Moderator's, warn them about the seller & buyer. Then depending on the amount... return the Bitcoin(s) to the buyer. In some case's, we may just donate the Bitcoin(s) to charity and close the case. We will also keep them in our log, and if we see any more suspicious activity on the forum by either party. We will again, warn Bitcoin Forum Moderator's. There is only so much you can do to stop crime... unfortunately, not every fraudulent transaction can be stopped.

We will ask them to show proof that the payment was claimed as unauthorized. It will go to our investigation process, the Bitcoin(s) will be frozen. If we see no proof, or faulty proof. Then we will continue with the transaction and send the Bitcoin(s) to the seller. If we do see good proof, then we will speak with the seller and see if they will fix the payment. If the seller refuse's to help in any way, the Bitcoin(s) will be returned to the buyer.

That is what your paying for  Wink.
BTCrow
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August 02, 2011, 02:47:24 AM
 #4

We will again, warn Bitcoin Forum Moderator's. There is only so much you can do to stop crime... unfortunately, not every fraudulent transaction can be stopped.

Hi first off welcome to the escrow service game Wink. Second you can do much more than just warn bitcoin forum moderator's till I think there you don't act as the authority for your own services. Of course not all transactions could be stopped, but in most case if you have strong resolution center policies and aware buyer and seller you won't have any problems at all.

For security of both parties when transaction involve tangibles products shipped, seller should ship package with tracking number and signature based service. This way the customer / escrow / seller can track down the item and know where it arrive. Second the buyer have the responsability to open the package before sign it in. If the buyer don't sign the package this will be marked as refused to the tracking interface, so it will act as a proof for all party involved that the package have been refused. In this case party can open a dispute till it's resolved, or wait for arbitration process. If he sign this mean that he accepted the package and this will act as a proof that the buyer received goods. btw, cough cough, that's how my escrow service works, cough cough.

For not tangible item to evade chargeback from let's say paypal the seller (paypal holder) and the buyer (bitcoin holder) can conclude that bitcoins will be hold for 60 days (paypal do not process chargeback after 60 days)* So in those case both party are protected. It's a long task of course but for large transactions involving bitcoins and paypal this is the best bet.

* In extremely rare case and with strong proof of not being able to login such as cancer therapy etc etc paypal can reverse funds.

Hoping the best for your escrow service as I always like to have competitors.

MiddleMan
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August 02, 2011, 02:51:59 AM
 #5

Hello BTCrow,

Thanks for this amazing response! What you have told me has totally made me re-think the system I will be creating. Do all shipping services notify through the tracking id, if the receiver has signed?

Do you mind giving me a list that do display a signed notification?

MiddleMan

Edit: Just took a look at your website, what does it mean by "Donation to Bitcoin Faucet" as an Escrow Processing Method?
payb.tc
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August 02, 2011, 03:03:32 AM
 #6

MITM? Great name for an escrow service!
MiddleMan
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August 02, 2011, 03:05:51 AM
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MITM? Great name for an escrow service!


No idea if you are being sarcastic...
indio007
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August 02, 2011, 03:12:15 AM
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Someone care to tell me why insurance wouldn't be the better option?

You know this stuff just sux. Why can't people just be fucking honest?
indio007
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August 02, 2011, 03:24:06 AM
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I was thinking Bitcoin is mega secure. No one can say it got lost in the mail. It is almost impossible to deny receipt of funds. Only the non-bitcoin side of the transaction needs insurance. I was thinking some fractional reserve system. 10% deposit of value of item shipped plus insurance premium that could be charged numerous ways from both sides. That way if there is a failure of delivery or the item is non-functional the policy pays out the promised item or a refund of the value.

The fact that only one side needs to be insured can really lower the cost of claims.
luciferxe
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August 02, 2011, 03:29:43 AM
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I would suggest all of you reading his other thread before making any decisions.

https://bitcointalk.org/index.php?topic=33595.msg419837#msg419837
payb.tc
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August 02, 2011, 04:25:00 AM
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MITM? Great name for an escrow service!


No idea if you are being sarcastic...

completely sarcastic.

the thought of a man-in-the-middle attack is probably not something you'd use to make people feel safe with their bitcoins.
Xephan
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August 02, 2011, 04:30:01 AM
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I would suggest all of you reading his other thread before making any decisions.

https://bitcointalk.org/index.php?topic=33595.msg419837#msg419837

When I saw the thread title, I assumed he was going to offer an escrow/middleman service and was all ready to paste the link to that thread too Cheesy


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Xephan
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August 02, 2011, 04:31:07 AM
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MITM? Great name for an escrow service!


No idea if you are being sarcastic...

completely sarcastic.

the thought of a man-in-the-middle attack is probably not something you'd use to make people feel safe with their bitcoins.


He might be trying to be honest there so that he can always claim "Com'on guys, I did try to warn you with the name!" Wink

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Ono Nadagin
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August 02, 2011, 04:43:41 AM
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After your post about 'hacking' unwitting  peoples comps to mine BTC I wouldn't trust you to throw away a snot rag.... you have proven yourself to be a willing criminal /thief...

Using hacking tools to take over unwitting persons computers to mine BTC makes you a cancer upon this community.... if anyone doubts me look through his post history... he is an advocate of hacking ppls comps to farm BTC
JoelKatz
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August 02, 2011, 08:50:21 AM
 #15

We will ask them to show proof that the payment was claimed as unauthorized. It will go to our investigation process, the Bitcoin(s) will be frozen. If we see no proof, or faulty proof. Then we will continue with the transaction and send the Bitcoin(s) to the seller. If we do see good proof, then we will speak with the seller and see if they will fix the payment. If the seller refuse's to help in any way, the Bitcoin(s) will be returned to the buyer.
How can you return the bitcoins if you've already released them? Presumably as soon as the seller confirms that he has received the funds, you will release the bitcoins. Right? How long will you hold them just in case the buyer claims the fund transfer was unauthorized?

Honestly, I don't see how you add any value whatsoever. All you do is switch the type of fraud from not sending the money to sending the money and then charging it back or from not sending the package to sending a package with rocks in it.

Now, maybe that's just me. Maybe other people would find such a service useful. Personally, you would have to provide me with extremely detailed policies and procedures for how you would handle each case before I would trust you with anything. "We might do this, we might do that" won't cut it. That's not how real escrow services work.

I am an employee of Ripple.
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