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Author Topic: Weaknesses in the usual lending procedure on this forum  (Read 993 times)
copumpkin
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January 01, 2012, 06:07:20 PM
 #1

I've noticed a lot of the loans on this forum are run a bit like:

Borrower: "I need X coins at Y interest rate, please send to address A"
Lender 1: "I sent X/p coins to you. Please return coins to address B"
Lender 2: "I sent X/q coins to you. Please return coins to address C"

The issue with this is that there's nothing connecting a forum post to the transaction they claimed to have made. Of course, chances are the real lender will post immediately and first, following a transaction, but a sneaky scammer could easily actively listen on the bitcoin network for transactions to address A and claim to have made them on the forum. Then we'd end up with two different people claiming to have lent the same amount of money to the same person, and we'd need a way to resolve the conflict. In most cases, there's a residual amount of coins that gets sent back to a new address in the sender's wallet, so it's sufficient for them to show that they can spend the residual amount, but it's a hassle.

As a safer system (at least until the bitcoin system supports arbitrary proofs of coin/transaction ownership), it'd be fairly simple for a lender to express a desire to lend X coins on a thread, then for the borrower to privately send them the amount followed by a small random sequence of decimals afterwards (X.01321451). Then, when the borrower receives an amount for that denomination, they can be sure that either the lender or a corrupt forum admin sent them those coins, and both parties can publicly post the agreement on the thread for witnessing by other people.

It's a bit more complicated, and might not be worth the hassle for most people, but I figured I'd suggest it or at least point out the flaws with the current system. Reputation can obviously help resolve disputes, but even people with good reputations can have their accounts compromised and wreak havoc on everyone Smiley
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vuce
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January 01, 2012, 06:14:34 PM
 #2

People should start using one address per transaction (at least in cases like this).
ineededausername
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January 01, 2012, 06:17:58 PM
 #3

People should start using one address per transaction (at least in cases like this).

+1.  It's easy to simply send the money back to wherever it came from.

(BFL)^2 < 0
notme
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January 01, 2012, 06:20:55 PM
 #4

The bitcoin client has signmessage/verifymessage methods that you can use to prove you own the address.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
copumpkin
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January 01, 2012, 06:34:08 PM
 #5

People should start using one address per transaction (at least in cases like this).

Yeah, that's even simpler Smiley
Fiyasko
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January 01, 2012, 07:08:07 PM
 #6

The bitcoin client has signmessage/verifymessage methods that you can use to prove you own the address.

Yup, Go take alook at my lending history, the Smart people Embed the addresses casuing them to be Unchangeable. Coins came from A, were sent to B, And C wants them back. None of the info can get changed.

People that use clean address can Easily send the money back to the correct person.
I've done it twice now!~

http://bitcoin-otc.com/viewratingdetail.php?nick=DingoRabiit&sign=ANY&type=RECV <-My Ratings
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koin
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January 01, 2012, 07:58:12 PM
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Embed the addresses casuing them to be Unchangeable.

huh?
grue
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January 01, 2012, 08:57:55 PM
 #8

or pay back the loan from its originating address? no chance of fraud that way.

It is pitch black. You are likely to be eaten by a grue.

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copumpkin
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January 01, 2012, 09:11:45 PM
 #9

or pay back the loan from its originating address? no chance of fraud that way.

Returning coins to originating addresses is dangerous if someone's using some sort of e-wallet or exchange to store their coins, though.
grue
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January 01, 2012, 09:26:34 PM
 #10

Returning coins to originating addresses is dangerous if someone's using some sort of e-wallet or exchange to store their coins, though.
don't use ewallets when giving out loans? problem solved.

It is pitch black. You are likely to be eaten by a grue.

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notawake
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January 01, 2012, 09:29:58 PM
 #11

...
Borrower: "I need X coins at Y interest rate, please send to address A"
...

The problem would be posting the addresses publicly and not through private messages. Any address and transaction details should be handled through private messages. For the public forum, other people only need to know the amount sent or received and if the transaction completed successfully. If a problem comes up that can't be resolved privately, the details in the private messages can be posted as necessary.

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