We need Reverse Transactions

[whyinvestinbitcoin]

One of the so-called features or benefits of bitcoin is the lack of any reverse transactions. But in many respects this is a great failing. Wouldn't it be better that if you voluntarily identify you as a legal entity holding a wallet address and that if you did not authorise a transaction (i.e. it was stolen or the goods weren't delivered) that there is a method to reverse that transaction?

What if you could submit that a transaction was illegal to the network and for a miners fee of say 10%, the transaction could be reversed by consensus? And that for addresses that are less trusted that becomes automatic but for highly trusted or fully identified addresses that goes to arbitration by one of many authorities/group of people to determine the validity?

To me, the KEY feature for bitcoin is the de-centralisation and limited quantity of units. But we need traditional services that the financial institutions currently provide for it to be useful. One feature is reverse transactions. without it is a hinderance to progress and why it exists to begin with.

Many scammers on this board I'm sure will happily protest to the idea. It doesn't work to their benefit. Is there any work being done on reverse-transactions in bitcoin?

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[arkintunde]

I don't think this would work. Despite all validation and "trust" what is to stop you from reversing a legitimate transaction? This is the problem with Credit Cards. I can roll out to a any bar strip in the country and spend up a hefty bill, call my credit card company the next day and say all of these transactions were unauthorized without ever seeing any of those vendors. You can't do that with cash...you can't do that with Bitcoin. If you want your transaction reversed, it's up to You and the Receiver. That's it. Not some mediation company who will favor one or the other.

[guybrushthreepwood]

What's to stop people from claiming any transaction was fraudulent? This would essentially just turn it into PayPal. Maybe we need some two factor authentication and better security features on wallets though.

[Lauda]

No we don't need this. Stop trying to become Paypal v2. This just gives people more opportunities to scam.

[BitcoinBobbeh]

What's to stop people from claiming any transaction was fraudulent?

This.

If any transaction can be overturned by a miners' consensus what's to stop leaders of large mining pools from simply stealing all the fucking coins?

[AndOneBtc]

paypal v2 alert

[hilariousandco]

Very bad idea. If you want this sort of protection use escrow or a payment processor that offers this protection. Just look how bad Paypal is defrauded.

[kevindurant]

No, we don't need this. It's very bad idea. Go use Paypal if you want chargebacks.

[justusranvier]

Feel free to invent your own currency with this feature and leave Bitcoin alone.

[exstasie]

No we don't need this. Stop trying to become Paypal v2. This just gives people more opportunities to scam.

Yeah, we don't want to give people any more opportunities.  That is one of the biggest downfalls with PayPal in terms of fraud.  How can you every do any P2P transactions when the transaction can be reversed.

[rix5]

it's just creating a huge mess. learn to secure your shit instead of blaiming btc. reverse transactions will also lead to scam and theft. just in another way.

edit: if you are not able to care for the security of your btc then maybe you really should use paypal instead.

[Mitchell]

No. Piss off. We don't need that shit in Bitcoin.

[satosh007]

Feel free to invent your own currency with this feature and leave Bitcoin alone.

well said Yep

[BitCoinDream]

One of the so-called features or benefits of bitcoin is the lack of any reverse transactions. But in many respects this is a great failing. Wouldn't it be better that if you voluntarily identify you as a legal entity holding a wallet address and that if you did not authorise a transaction (i.e. it was stolen or the goods weren't delivered) that there is a method to reverse that transaction?

What if you could submit that a transaction was illegal to the network and for a miners fee of say 10%, the transaction could be reversed by consensus? And that for addresses that are less trusted that becomes automatic but for highly trusted or fully identified addresses that goes to arbitration by one of many authorities/group of people to determine the validity?

To me, the KEY feature for bitcoin is the de-centralisation and limited quantity of units. But we need traditional services that the financial institutions currently provide for it to be useful. One feature is reverse transactions. without it is a hinderance to progress and why it exists to begin with.

Many scammers on this board I'm sure will happily protest to the idea. It doesn't work to their benefit. Is there any work being done on reverse-transactions in bitcoin?

I dont care if u call me a SCAMMER, but I am hereby protesting your idea. Rather I am suggesting you to stay out of Bitcoin. FIAT money will work better for you. I dont really feel the necessity of explaining you the reason of protesting reversibility in the light of Satoshi's paper. Because, in your eye, he's a scammer too......

[LostDutchman]

No. Piss off. We don't need that shit in Bitcoin.

Very well put!

Thank you for your insightful post!

My $.02.

[EchoingUprise]

I agree with everyone else. It is not needed in the bitcoin world. It would also probably take a good bit of code rework to even allow this.

[vpitcher07]

No no no no no no and no. Nope absolutely not. nope. Did i get my opinion across?

[vpitcher07]

Fun thing, this is included in the protocol.
There is a reversibility option.

Um what?

[DeathAndTaxes]

Bitcoin is cash.  Is cash reversible? No.

However that doesn't mean payment systems can't be built ON TOP OF Bitcoin.

VISA isn't a currency, VISA is a payment system built on top of USD cash system.
_____ isn't a currency, ____ is a (future) payment system built on top of BTC cash system.

[retrend]

If people are involved in transactions with untrusted parties, they should pay for an escrow service.  It shouldn't be built into the system itself.

[Timo Y]

Is there any work being done on reverse-transactions in bitcoin?

Yes. They just aren't widely implemented yet.

See:
https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation

Bitcoin has the added benefit that both sender and recipient can choose in advance who has the power to reverse a transaction in case of a dispute.

[...]the transaction could be reversed by consensus?

In principle, any bitcoin transaction CAN be reversed by consensus.  Bit since this requires changing the protocol it is unlikely to ever happen for individual transactions.

During the March 2013 fork event transactions were successfully reversed:
https://bitcoin.org/en/alert/2013-03-11-chain-fork

More realistically, you could also set up a multisig transaction that requires the consensus of a "committee" of previously selected mediators.

[NorbyTheGeek]

Bitcoin is cash.  Is cash reversible? No.

However that doesn't mean payment systems can't be built ON TOP OF Bitcoin.

VISA isn't a currency, VISA is a payment system built on top of USD cash system.
_____ isn't a currency, ____ is a (future) payment system built on top of BTC cash system.

This, people.  Bitcoin is CASH.

If I hand you a $20 bill, and you walk away, there's no reversing that transaction unless I can run faster than you and hit you really hard.  But that's called theft.

[jongameson]

Is there any work being done on reverse-transactions in bitcoin?

Yes. They just aren't widely implemented yet.

See:
https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation

Bitcoin has the added benefit that both sender and recipient can choose in advance who has the power to reverse a transaction in case of a dispute.

[...]the transaction could be reversed by consensus?

In principle, any bitcoin transaction CAN be reversed by consensus.  Bit since this requires changing the protocol it is unlikely to ever happen for individual transactions.

During the March 2013 fork event transactions were successfully reversed:
https://bitcoin.org/en/alert/2013-03-11-chain-fork

More realistically, you could also set up a multisig transaction that requires the consensus of a "committee" of previously selected mediators.

Why was this block rejected?  What in specific made it incompatible with earlier versions of the software?

[coastermonger]

NO! We do not need transaction reversals.  This is an inherent design feature of bitcoin and if you want reversals, go back to fiat or design your own cryptocurrency that allows it.  

For the sake of preventing theft, avoiding mistakes, using escrow, etc, reversals are not the answer.  More powerful coin spending control can managed with contracts.

[cr1776]

Is there any work being done on reverse-transactions in bitcoin?

Yes. They just aren't widely implemented yet.

See:
https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation

Bitcoin has the added benefit that both sender and recipient can choose in advance who has the power to reverse a transaction in case of a dispute.

[...]the transaction could be reversed by consensus?

In principle, any bitcoin transaction CAN be reversed by consensus.  Bit since this requires changing the protocol it is unlikely to ever happen for individual transactions.

During the March 2013 fork event transactions were successfully reversed:
https://bitcoin.org/en/alert/2013-03-11-chain-fork

More realistically, you could also set up a multisig transaction that requires the consensus of a "committee" of previously selected mediators.

Why was this block rejected?  What in specific made it incompatible with earlier versions of the software?

See:
https://github.com/bitcoin/bips/blob/master/bip-0050.mediawiki


As far as reversibility, OP, don't just say "we need X" - if you believe it, do it.  Talking does nothing.  Please fork the software, and fork the blockchain with your idea.  Let us know when it is complete.  If it is true that "We need Reverse Transactions", then everyone will switch.  The rest of us will be selling your new PayPalCoin.

Either way, it will put an end to these repeated ideas for changes that make no sense.

[freebitcoinwin]

This thing even with the benefits this could create, compared to the chaos this would create, would be nothing

[rix5]

if reversals became possible there would be a lot more scamming i think. i wouldn't accapt btc as a payment anymore if i knew the transaction is not reliable and could be charged back.
People accept btc as a form of payment because they know once it is in their wallet they really have it.
Ask retailers about credit cards payments. Overstocks already said that one of the huge benefits in btc for them was the fact it was a reliable payment with no chargebacks.

Just idiotic. Abandon troll-thread of noobaccount. thx

[Mitchell]

see the locktime in tx headers.

The block number or timestamp at which this transaction is locked:

Value	Description
0	Always locked
< 500000000	Block number at which this transaction is locked
>= 500000000	UNIX timestamp at which this transaction is locked

If all TxIn inputs have final (0xffffffff) sequence numbers then lock_time is irrelevant. Otherwise, the transaction may not be added to a block until after lock_time (see NLockTime).

nLockTime is a parameter that can be attached to a transaction, that mandates a minimal time (specified in either unix time or block height), that before this time, the transaction cannot be accepted into a block.

locktime is something completely different. I build LockMyCoins around it, so I'm quite sure about it. I could be wrong, but I highly doubt it.

[Holliday]

One of the so-called features or benefits of bitcoin is the lack of any reverse transactions. But in many respects this is a great failing. Wouldn't it be better that if you voluntarily identify you as a legal entity holding a wallet address and that if you did not authorise a transaction (i.e. it was stolen or the goods weren't delivered) that there is a method to reverse that transaction?

What if you could submit that a transaction was illegal to the network and for a miners fee of say 10%, the transaction could be reversed by consensus? And that for addresses that are less trusted that becomes automatic but for highly trusted or fully identified addresses that goes to arbitration by one of many authorities/group of people to determine the validity?

To me, the KEY feature for bitcoin is the de-centralisation and limited quantity of units. But we need traditional services that the financial institutions currently provide for it to be useful. One feature is reverse transactions. without it is a hinderance to progress and why it exists to begin with.

Many scammers on this board I'm sure will happily protest to the idea. It doesn't work to their benefit. Is there any work being done on reverse-transactions in bitcoin?

I love this idea. Please fork Bitcoin (or create an altcoin) with the option to reverse transactions and allow this altcoin to compete with Bitcoin on the open market.

The market will certainly decide which property is more desirable and we can finally put this topic to rest.

Thanks!

[whyinvestinbitcoin]

Thanks deathandtaxes and timoY and a few others for your measured and considered responses. Most of the other respondents really shouldn't bother if they aren't interested in an actual debate and just want to spit and dribble.

I agree that cash is cash and if you hand it over to a scammer then shame on you. But there are many instances where reversibility serves a great purpose. I'm not suggesting that the bitcoin protocol be reworked. It's foundation is solid. But in reality people are going to want security and certainty that their funds are safe.

So perhaps the right solution is a trust based system with some level of reversibility added to instil confidence in the underlying system.

The most important thing for bitcoins adoption is trust - and I don't mean that technically. I mean that on a emotional human level. Right now most people don't trust BTC for shit because so many people get scammed, coins stolen etc... Just because most people here get and know computer security, you can't expect the same of the other 99% of people who don't even know how to turn their tvs on if they lost the remote.

So please instead of just saying NO,NO,NO why not go out there and figure out how you're going to get your grandma to use bitcoin without her loosing all her life's savings.

[keithers]

It has its merits  for some of the benefits, but I think the "cons" outweigh the "pros" for the ability to reverse transactions.   It would be nice if there were some additional ways to prevent theft (which in the future there probably will be), but for now, it is good enough.

[Mitchell]

So perhaps the right solution is a trust based system with some level of reversibility added to instil confidence in the underlying system.

The most important thing for bitcoins adoption is trust - and I don't mean that technically. I mean that on a emotional human level. Right now most people don't trust BTC for shit because so many people get scammed, coins stolen etc... Just because most people here get and know computer security, you can't expect the same of the other 99% of people who don't even know how to turn their tvs on if they lost the remote.

You could take a look at the following website: http://www.bit2factor.org/ or http://www.bitescrow.org/ depending on your needs. It might be useful for you and your purposes.

[nickenburg]

I think that is a bad idea,
Because look at paypal they allow reversed transactions to.
It only lets people scam other people.
If you sell something with paypal (especcially virtual goods) you need to be damn sure the buyer isnt a scammer.
Because the buyer has a few ways to get his money back, and your product is gone with no money left.

[vv01f]

noone needs reverseable transactions - go with e.g. http://www.ethereum.org/ethereum.html and built some contracts that can be validated.. this will be part of some client in future, probably in another way than that one

[MarketNeutral]

Which do you prefer?

"There are some things money can't buy. For everything else, there's MasterCard."

or

"Visa. It's everywhere you want to be."

[bryant.coleman]

Don't open the Pandora's box. We are better this way.

[franky1]

One of the so-called features or benefits of bitcoin is the lack of any reverse transactions. But in many respects this is a great failing. Wouldn't it be better that if you voluntarily identify you as a legal entity holding a wallet address and that if you did not authorise a transaction (i.e. it was stolen or the goods weren't delivered) that there is a method to reverse that transaction?

no, no, no, no, no.. and NO

what you need is self regulation in this form:
learn who your seller is
only deal with trusted people
if you cant trust them, dont pay them
if they are trusted, they would be willing to refund you.

my personal rule for trading is, if someone on the street asked me for money and i did not know them, would i give them it?.. and the answer is the same answer for bitcoins.

EG
if i dont know the person.. no
if i knew the person and they were honest.. yes
if i came across a store that didnt have all the authentic necessities.. no
if i came across a legitimate store.. yes

[LostDutchman]

Don't open the Pandora's box. We are better this way.

Years ago, had a GF named Pandora.

Finally got her box open.

[Impaler]

The near frothing at the Mouth you see from BTC fanatics to this most basic of ideas shows why their is no hope for rational response or evolution of BTC protocol into something that could actually compete with the mainstream.

[sgk]

I see irreversible transactions as a strength, not a weakness in Bitcoin.

[exapted]

Bitcoin is the final arbiter. Security is implemented on top of it. For "reversible transactions" use an escrow service.

The idea in the OP has to be the worst bitcoin idea ever. Bitcoin's strength lies in its status as final arbiter.

[mdotstrange]

I see irreversible transactions as a strength, not a weakness in Bitcoin.

I like the finality of it- it was a bit scary at first but now I feel much more secure with the lack of reverse transactions- it forces you to be much more aware of who/what you are doing business with- its a good thing.

[icet208]

Feel free to invent your own currency with this feature and leave Bitcoin alone.

+1

[sidhujag]

This is the job of an insurer of your bitcoins for which you pay fees to protect your transactions.. if your found liable you get nailed for fraud.

Quit trying to outsmart technology and let it do its job.

[exapted]

Bitcoin is not a complete payment solution. If you want paypal-style protection, use a paypal-like arbitration service on top of Bitcoin. If you want B2B-style protection, use a letter-of-credit-like service on top of Bitcoin.

If you can't secure your bitcoins or don't feel comfortable transacting, use a third party service that you trust. That's effectively the same as baking (third-party, by definition) arbitration into Bitcoin, and it won't endanger the core functionality and fungibility of Bitcoin. The OP seems like trolling.

[exapted]

The near frothing at the Mouth you see from BTC fanatics to this most basic of ideas shows why their is no hope for rational response or evolution of BTC protocol into something that could actually compete with the mainstream.

You are wrong, and you are being obtuse. Actually, the OP does not recognize the design principles behind Bitcoin. The responses are merely explaining the proper application of those design principles to the problem of transaction arbitration - e.g. arbitration goes on top of Bitcoin, not inside of it.

The way to make Bitcoin competitive as a payment network is for arbitration to be implemented on top of it. This will be more effective than baking arbitration inside of Bitcoin, because it will allow different countries / groups / applications to use systems or mechanisms uniquely suited to their tasks. Arbitration is quite different in mainland China compared to, say, the US.

Consider, for a moment, that Paypal will never win in mainland China. Two corporate / government -sponsored payment systems dominate mainland China - Alipay and Tenpay. But Bitcoin is doing pretty well in China. Bitcoin is completely international because it doesn't default to any authority and can therefore be relied upon by any entity in the world.

[kwest]

Refunds are coming in a future version:
"The Payment Protocol to replace addresses. Supports refunds, memos, receipts, proof-of-purchase, and digital signature."

From here:
https://bitcointalk.org/index.php?topic=428777.0

[BADecker]

How about non-legal system, impartial judges combined with escrow. Consider this about non-governmental judges, from Robert Heinlein's "The Moon is a Harsh Mistress."

"If two people brought a quarrel to Brody [a non-governmental judge] and he could not get them to agree that his settlement was just, he would return fees and, if they fought, referee their duel without charging—and still be trying to persuade them not to use knives right up to squaring off."

[hilariousandco]

Refunds are coming in a future version:
"The Payment Protocol to replace addresses. Supports refunds, memos, receipts, proof-of-purchase, and digital signature."

From here:
https://bitcointalk.org/index.php?topic=428777.0

I don't think that's the same as what OP is proposing.

[Lauda]

Refunds are coming in a future version:
"The Payment Protocol to replace addresses. Supports refunds, memos, receipts, proof-of-purchase, and digital signature."

From here:
https://bitcointalk.org/index.php?topic=428777.0

This would be a mistake.

[hilariousandco]

Refunds are coming in a future version:
"The Payment Protocol to replace addresses. Supports refunds, memos, receipts, proof-of-purchase, and digital signature."

From here:
https://bitcointalk.org/index.php?topic=428777.0

This would be a mistake.

Pretty sure it's just something to easily send the money back to where it came, so nothing to worry about.

[hostmaster]

Reserving or refunding trasactions can be a good idea unless it's not over stressed. it can have small area. Otherwise advertisement of refunds not so good idea.

[hilariousandco]

Reserving or refunding trasactions can be a good idea unless it's not over stressed. it can have small area. Otherwise advertisement of refunds not so good idea.

What do you mean by reserving?

Refunds are coming in a future version:
"The Payment Protocol to replace addresses. Supports refunds, memos, receipts, proof-of-purchase, and digital signature."

From here:
https://bitcointalk.org/index.php?topic=428777.0

This would be a mistake.

It's just an invoice network with 'return' address.

It won't be like the user clicks 'refund' and magically gets his money back.

Yeah, that wouldn't be very good, but the option to send back a payment would be.

[stompix]

Refunds are coming in a future version:
"The Payment Protocol to replace addresses. Supports refunds, memos, receipts, proof-of-purchase, and digital signature."

From here:
https://bitcointalk.org/index.php?topic=428777.0

This would be a mistake.

As far as I understand this is nothing like what the op is proposing in this thread  , and not that dangerous.

[DoctorOz]

No. Piss off. We don't need that shit in Bitcoin.

Very well put!

Thank you for your insightful post!

My $.02.

AGREE!

[cryptoanarchist]

Hey OP, why don't you just use PayPal and not waste time here?

[Raoul Duke]

Fork Bitcoin and "create" one cryptocurrency with reversibility. If the market wants it...

[guybrushthreepwood]

Hey OP, why don't you just use PayPal and not waste time here?

lol, I'm sure Bitcoin will have it's own Paypal eventually that people will use to scam.

[Lauda]

Hey OP, why don't you just use PayPal and not waste time here?

lol, I'm sure Bitcoin will have it's own Paypal eventually that people will use to scam.

You can't be sure about this.
If we , the people, don't allow it, it won't happen.

[hilariousandco]

Hey OP, why don't you just use PayPal and not waste time here?

lol, I'm sure Bitcoin will have it's own Paypal eventually that people will use to scam.

You can't be sure about this.
If we , the people, don't allow it, it won't happen.

But we all know "people" are made up of "average joes"  .

[jongameson]

Hey OP, why don't you just use PayPal and not waste time here?

lol, I'm sure Bitcoin will have it's own Paypal eventually that people will use to scam.

You can't be sure about this.
If we , the people, don't allow it, it won't happen.

who can trust a business to track/trade which is untraceable?

the shadow knows?

[Kazimir]

Wouldn't it be better that if you voluntarily identify you as a legal entity holding a wallet address and that if you did not authorise a transaction

With Bitcoin, if you hadn't authorised a transaction, it wouldn't have been sent in the first place.

[rohnearner]

Hey OP, why don't you just use PayPal and not waste time here?

lol, I'm sure Bitcoin will have it's own Paypal eventually that people will use to scam.

You can't be sure about this.
If we , the people, don't allow it, it won't happen.

But we all know "people" are made up of "average joes"  .

Don't underestimate brain of average Joes , we people i think now know what's gonna work and whats not..!

[pazor]

N O ! 

we do not need Reverse Transactions!

[rohnearner]

I see irreversible transactions as a strength, not a weakness in Bitcoin.

not many will agree with you..! and they have enough reason for that..! i think having a irreversible transaction is a feature which can be misused a lot, which already happens a lot with all those reversible PP , so for some small biz owners and many other having a Non-reversible transaction is one of the Features of BTC.

[chowderman]

There needs to be some form of reversing transactions and fraud protection. Its only the thieves and scammers that argue against it and they belong in prison anyway. People that just want to abuse the system are all for their irreversible non-sense.

[hilariousandco]

There needs to be some form of reversing transactions and fraud protection. Its only the thieves and scammers that argue against it and they belong in prison anyway. People that just want to abuse the system are all for their irreversible non-sense.

No it's not. It's thieves and scammers that will abuse this reversibility like they do on Paypal. If you want protection, use an escrow or a payment processor that will insure against problems.

[mgio]

We don't need this. The ability to do escrow is built into the protocol (although no clients seem to support this as of yet).

[cr1776]

Personally I don't think this is a priority.

In my opinion the following are priorities.

Security: eliminate the need for pools - they WILL eventually overwhelm. Imagine BTC is 100000 USD per unit, wouldn't YOU hack the system as a pool owner just to buy 5 houses?
Security: protect the zero-confirmation transaction by implementing the pre-mined block announcements, so you can see which transaction HAS been received by miners, while it's not 100% guarantee - it helps for the merchants.
Security/AntiDDOS: implement bitmessage like path-cost
Clean up: delete the irrelevant parts of protocol (like locktime, size etc), this will lower the size of blockchain and transmissions.
Speed: implement partial block announcement so clients can get just the inputs/outputs related to it's addresses.
GUI: can't even count the UI mess we have now. at least implement blockchain.info functionality to trace transactions and processing.

As far as the pools go, p2pool eliminates many of the issues - coins are paid right away so there is no pool wallet to hack for example, mining is more distributed, lowering the possibility of a 51% attack. 

[StevenS]

Is there any work being done on reverse-transactions in bitcoin?

Yes. They just aren't widely implemented yet.

See:
https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation

Bitcoin has the added benefit that both sender and recipient can choose in advance who has the power to reverse a transaction in case of a dispute.

This is easily the best answer to the OP. While it is not the same as a reversal (charge-back), it is a escrow system that works with Bitcoin today. It is entirely optional, and only requires that the buyer and seller agree on an arbitrator (and if you can't agree on an arbitrator, you shouldn't be doing business together).

Escrow has some advantages and disadvantages over reversals.
Advantages:

• Funds are released immediately when both parties are satisfied. (E.g. when the buyer receives the goods.)
• After funds are released, seller doesn't have to worry that the funds can be taken away at a later date.
• Parties can agree to change the timing. (E.g. seller can ask the buyer or mediator for an extension if there is a delay in shipping.)
• A good mediator can keep both parties well-informed, decreasing misunderstandings. (Compare to a credit card charge-back, when the seller can be surprised months after the sale.)

Disadvantage:

• Funds cannot be used by the seller until the escrow is released.

In my opinion, the advantages of escrow completely overwhelm the disadvantages.