Transaction reversability would be a BAD thing

[QuestionAuthority]

There's a lot of big wealthy companies that agree with you OP. I just kind of thought we were tryin to be different.

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[CoinsOrDie]

What you want to be able to do is already possible using transaction scripting and a blockchain enforcable digital contract.

I was looking in the scripting docs for bitcoin but first of all half of the commands are "disabled" and I can't find anything to make reversals possible for a certain time or dept. And honestly, I think it's a bad idea.

[mgio]

You don't need this.

Just use the escrow features already built into the bitcoin protocol.

Require the original sender to sign the transaction for it to be completed and there you go -- reversible transactions.

[R2Pleasent]

Transaction "reversibility" is not useful without some form of arbitration, which forces a human element into the transaction.  Paypal reversibility can be useful (in theory) in the sense that a third party judges whether both parties fulfilled their obligations in a transaction.  If the person receiving the Bitcoins can provide concrete proof to the third party that they also completed their end of the deal, then the judge can mediate disputes, and reverse funds back when this proof is not presented.

The scenario you present has no extra protection.  Every extra bit of protection to the consumer is simply taken from the merchant.  The merchants will not accept a payment which can be reversed.  They have no way to prevent the reversal aside from simply waiting until it is no longer possible.  If they ship an item, and the buyer reverses a payment, then they have no recourse.

At the end of the day, whoever goes first in a transaction must trust the other party.  Your method does not fix this fact.  It simply re-defines who goes first.  At the end of the day, one party still must trust another party to deliver / not reverse a transaction.

This system would primarily guard against hacking.  It is not about resolving disputes.  One example is the address-switch, where I was trying to pay a merchant.  I sent the funds, but the merchant never received it.  I would reverse that.

Another scenario would if your computer got hacked, and wallet emptied.  You had an alert system for your addresses, you noticed coins moved without your authorization, so you reverse it.

No merchant would suffer at all.  Every merchant would wait for your "hold" period to elapse before they consider the funds received.  If you wanted stuff instantly, don't sent money that has a hold on it.

You're just slowing everything down.  You're saying that instead of transactions clearing instantly, they essentially linger between the parties for however long you set this reversal period.  The marginal benefit to safety this adds compared to the huge decrease in transaction speed is not a worthwhile trade-off.

Furthermore, if users have the option to send both reversible and non-reversible transactions, hackers will just send non-reversible transactions.

[Cubic Earth]

I am finding it amusing that half of the posts are saying optional reversibility would hurt bitcoin, and the other, more-informed half, are saying it is already doable through the protocol.

I'll read up more on the scripting possibilities.  I am a little bit skeptical they will be sufficient to address the hacking risk that I am trying lessen though my proposal.  Why are they not used to greater effect already?  In the current incarnation, the scripting solutions seem quite complex at best, leaving them as an option for experts or offered as third-party solutions.  Isn't it better if we can avoid third parties where possible?

Require the original sender to sign the transaction for it to be completed and there you go -- reversible transactions.

Which original sender... do I have recourse if my private keys were compromised?

link=topic=511881.msg5653264#msg5653264 date=1394597782]
There's a lot of big wealthy companies that agree with you OP. I just kind of thought we were tryin to be different.

QuestionAuthority - I want to send you 1 BTC.  I am going to send it to you from an address I control that is setup with a 5 hour hold.  After 5 hours have passed, is this bitcoin less valuable to you than any other bitcoin?

bitcoin wins because it does not charge back.

if you like chargebacks... use paypal

The chargeback period would have a defined, mathematically enforced time limit.  You just have to wait out that time limit.  My proposal doesn't give either the merchant or the customer the upper hand over each other, it just gives them both the upper hand over hackers.  A merchant would have at least two options for removing all chargeback risk. 
1) Make it policy to not accept any transactions which are from reversible addresses or
2) Wait until the possibility of reversal had expired to ship the goods.

Option #2 is what merchants would do.  If you were silly enough to send a payment to Overstock that had a 1 week hold time, you would just have to wait a long while before they shipped your stuff.

You're just slowing everything down.  You're saying that instead of transactions clearing instantly, they essentially linger between the parties for however long you set this reversal period.  The marginal benefit to safety this adds compared to the huge decrease in transaction speed is not a worthwhile trade-off.

Furthermore, if users have the option to send both reversible and non-reversible transactions, hackers will just send non-reversible transactions.

Having an option to slow it down, yes, that is the point.  As my proposal states, you would create an address that was encumbered.  You would do this by choice because you wanted to give yourself time to review any and all outputs from that address.  You would do this to protect yourself against hacking.  The drawbacks of slowness would you be yours alone.  If you didn't think it was worth the marginal benefit, you wouldn't set up a encumber address and you wouldn't add any funds to it if you did.  You're right, hackers would steal the unreversible funds first.  It's up to you what kind of security you want to implement.

[Peter R]

...the other, more-informed half, are saying it is already doable through the protocol.

MoonShadow, Cbeast, and I all mentioned that a variant of what you proposed may be possible using the bitcoin scripting language.

As a community, we have only scratched the surface of the possibilities offered by the existing protocol.  This is why the necessary tools are not yet available.  I believe you can implement what you want if you spend some more time researching (I know you said you briefly looked).  Perhaps developers like Gmaxwell, J Garzik, Peter Todd etc can give you some hints.  

There are opportunities for innovation with more advanced scripting (and still using bitcoin "as is").

[Hawker]

Its s good idea.

Take a quick read of this: http://research.microsoft.com/pubs/161829/EverythingWeKnow.pdf

Reversibility is needed if Bitcoin is ever going to see mass adoption.  I know people say "Only stupid people get robbed" but the vast majority of people have been scammed at some point and a reversible transaction layer is going to be needed.

[greyman]

Why not just have the person send back the coins and reverse it manually. Then u don't have to change bitcoin

But what if the seller is dishonest? You sent BTC and then didn't receive what was expected.

With reversibility, seller is at risk, with non-reversibility, buyer is at risk.

[Hawker]

Why not just have the person send back the coins and reverse it manually. Then u don't have to change bitcoin

But what if the seller is dishonest? You sent BTC and then didn't receive what was expected.

With reversibility, seller is at risk, with non-reversibility, buyer is at risk.

Its not just dishonest sellers.  People are always having their bank account details phished.  The banking system protects them by making good any money stolen by the phisher.  If the idea is that Bitcoin can replace fiat currency, a similiar reversible system will be needed.

[Joshuar]

Not having Transaction reversability is what makes Bitcoin and other cryptocurrencies unique compared to credit cards for example. Lets leave it that way.

[amspir]

There could be an upper limit to reversibility, perhaps a month.  There are pros and cons to encumbering your coins as such.  No vending machine would accept coins that could be reversed.  But an internet retailer would, they would just need to wait X blocks + 6 confirmations before shipping your stuff.  The nice part is you could get the email receipt from them that you paid and all was good before the reversibility window had passed.  If you didn't get the email, maybe because someone had man-in-the-middled the merchant's address, you could fix the mistake before it became permanent.

I'm not understanding any advantage to this.  Why would someone choose to accept coins that could be reversed?  Either sender is paying or they are not.  If you aren't comfortable with paying up front, the you need to get the receiver to extend you credit - they ship and trust that you will pay up on receipt.   If the transaction is escrowed, then human judgement is involved -- the escrow agent needs to make a fair decision in the case of a dispute, that's not a problem you can solve with just math.

Besides, adding such a system is ripe for abuse -- it would give the Nigerian scam new life.

[Jocky]

I think this has been discussed enough, and I don't hear new arguments. Reversal of transactions is possible if the receiver wants to, if not, he only risks fraudulent chargebacks. For all other 'distrust' issues, you go for escrow services, which is also reversible.

[Hawker]

Not having Transaction reversability is what makes Bitcoin and other cryptocurrencies unique compared to credit cards for example. Lets leave it that way.

That is a respectable position to take if you have no interest in widespread adoption of Bitcoin.  Some of us do want to see it widely adopted.

[Hawker]

There could be an upper limit to reversibility, perhaps a month.  There are pros and cons to encumbering your coins as such.  No vending machine would accept coins that could be reversed.  But an internet retailer would, they would just need to wait X blocks + 6 confirmations before shipping your stuff.  The nice part is you could get the email receipt from them that you paid and all was good before the reversibility window had passed.  If you didn't get the email, maybe because someone had man-in-the-middled the merchant's address, you could fix the mistake before it became permanent.

I'm not understanding any advantage to this.  Why would someone choose to accept coins that could be reversed?  Either sender is paying or they are not.  If you aren't comfortable with paying up front, the you need to get the receiver to extend you credit - they ship and trust that you will pay up on receipt.   If the transaction is escrowed, then human judgement is involved -- the escrow agent needs to make a fair decision in the case of a dispute, that's not a problem you can solve with just math.

Besides, adding such a system is ripe for abuse -- it would give the Nigerian scam new life.

That's how online commerce works now.  Why do you think Bitcoin would not work if it has the same protections as the dollar?

[teukon]

You would be able to predesignate an address as a reversible address.

Check out Mastercoin savings addresses.

[zureman90]

So you are saying we need reversability, to avoid hackers and man-in-the-middle attacks? Imo, the abuse of the reversability would be a lot worse. Instead take precautions so you don't get hacked or mitm'd.

If you want your transaction reversed, just ask the other person to send you the coins back!

/thread

[amspir]

I'm not understanding any advantage to this.  Why would someone choose to accept coins that could be reversed?

That's how online commerce works now.  Why do you think Bitcoin would not work if it has the same protections as the dollar?

A credit card transaction, as opposed to a cash or irreversible transaction, is different in that the payment processor is acting as an escrow agent.  Money in a credit card transaction is reversible until the sender can no longer reverse it.  The payment processor may extend credit to the merchant to spend those funds until that point, but that is an extra service of the escrow agent/payment processor.

There isn't a need to change how bitcoin works to use escrow.

[RodeoX]

It already is reversible. As long as the counter-party agrees, they can send the money back to you.   

[Hawker]

I'm not understanding any advantage to this.  Why would someone choose to accept coins that could be reversed?

That's how online commerce works now.  Why do you think Bitcoin would not work if it has the same protections as the dollar?

A credit card transaction, as opposed to a cash or irreversible transaction, is different in that the payment processor is acting as an escrow agent.  Money in a credit card transaction is reversible until the sender can no longer reverse it.  The payment processor may extend credit to the merchant to spend those funds until that point, but that is an extra service of the escrow agent/payment processor.

There isn't a need to change how bitcoin works to use escrow.

You seem to be misunderstanding how things work now.

If someone, say your granny, has their bank account accessed as a result of phishing, and all the money taken out, the bank will make her good.

She will not lose a penny.

If you want Bitcoin to replace the dollar, you need the same functionality available to the same credulous non-technical people.  

[Hawker]

It already is reversible. As long as the counter-party agrees, they can send the money back to you.   

Someone takes the time to craft a phishing email.  They then take the time to access a bank account and take the money. 

That person is not going to mutate into a counter-party that agrees to send them money back.