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Automatic Monkey
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October 30, 2015, 07:28:17 AM |
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Two-party escrow. What a great idea!
This is much like an old and tested way of doing business on the street. You want some product or service, let's say the price is $20. You tear a $20 bill in half, give half to the provider of the goods or service and keep the other half. Then the bill is of no value to either of you. When the contract is fulfilled you give the provider the other half. That practice works because you cannot profit by screwing anyone; all you will gain is an enemy if you do that, and you will lose the ability to do business again.
Now to do it online requires just a little modification. One reason is that the consequences of making an anonymous enemy on the internet are not significant, it's not like you are going to get cornered one day and get your ass kicked like you do on the street. The other is that you are more likely to come in contact with someone who has a non-financial motivation for screwing someone online, such as a moral objection to some type of business done on the Shadow market. So False Seller creates a listing to sell something for 100 SDT. He puts up 100 SDT of his own funds to escrow. True Buyer sends False Seller 100 SDT and puts 100 SDT into escrow. Nothing is ever delivered. False Seller gets his 100 SDT back from True Buyer, plus he gets his jollies knowing he screwed that immoral True Buyer out of 200 SDT and it cost him only listing and transaction fees.
In order to make this work against such an actor there has to be a way to make the escrow amount significantly higher than the purchase amount. Let's say each party had to put 200 SDT into escrow, it is far less likely someone would be willing to lose 100 SDT to screw someone else out of 300 SDT.
It would also be nice to have a way for all in the community to know how much money ends up permanently sequestered in escrow, and in what listings. That will give us an idea of the actual money supply, and also of what kind of listings are problematic.
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Try ShadowCash, the first coin with instant and decentralized private transactions!
SDC address: SUPERMAN8eDvcPL6RWYMVwtPzUtqWi2zCr
Wallet Private Key: 7S6fJBEzXqJuuGCvEPcgBSbd5wmjVTvDj7591gNKcTmS7X47e98
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Wheatclove
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October 30, 2015, 01:09:31 PM |
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We're trying to collect 10btc so that Ryno can spend the entire month of November working on the ShadowMarket.
He would also accept other means of donations (PayPal, etc).
His work for DarkSilk has been brought to everyone's attention. He had been paid to fix their code while still working on Shadow. We all need money to live. If you can spare a little, it will help Ryno get the Market released as soon as possible.
I'll let him post the address if he wishes and this post is allowed by the moderators.
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Virtuoso
Legendary
 Offline
Activity: 1120
Merit: 1002
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November 01, 2015, 12:02:44 AM |
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Very nice :-) it works pretty well |
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dasource
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November 02, 2015, 11:30:32 AM
Last edit: November 02, 2015, 04:42:12 PM by dasource |
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Two-party escrow. What a great idea!
This is much like an old and tested way of doing business on the street. You want some product or service, let's say the price is $20. You tear a $20 bill in half, give half to the provider of the goods or service and keep the other half. Then the bill is of no value to either of you. When the contract is fulfilled you give the provider the other half. That practice works because you cannot profit by screwing anyone; all you will gain is an enemy if you do that, and you will lose the ability to do business again.
Now to do it online requires just a little modification. One reason is that the consequences of making an anonymous enemy on the internet are not significant, it's not like you are going to get cornered one day and get your ass kicked like you do on the street. The other is that you are more likely to come in contact with someone who has a non-financial motivation for screwing someone online, such as a moral objection to some type of business done on the Shadow market. So False Seller creates a listing to sell something for 100 SDT. He puts up 100 SDT of his own funds to escrow. True Buyer sends False Seller 100 SDT and puts 100 SDT into escrow. Nothing is ever delivered. False Seller gets his 100 SDT back from True Buyer, plus he gets his jollies knowing he screwed that immoral True Buyer out of 200 SDT and it cost him only listing and transaction fees.
In order to make this work against such an actor there has to be a way to make the escrow amount significantly higher than the purchase amount. Let's say each party had to put 200 SDT into escrow, it is far less likely someone would be willing to lose 100 SDT to screw someone else out of 300 SDT.
My preference to this is actually we stick to the original mechanics so.. Buyer - puts up 1x deposit + 1x purchase price Seller - puts up 1x deposit + item All goes into a multi-sig transaction that has say "30days" to settle after which neither party gets back anything (if either party tries to con the other). Instead the entire multi-sig balance gets spent as a "fee" and the miner of the next blocks get a nice bonus ... This will ensure that its impractical for the seller or buyer to gain a financial advantage by being dishonest... Example Item on sale : GPU @ $300 i.e. 300 SDC
Buyer and Seller agree sale.
Buyer - 300 SDC deposit + 300 SDC purchase price
Seller - 300 SDC deposit + send item
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + 300 SDC purchase price = 600 SDC loss
Seller - forfeits his 300 SDC deposit + did not send item = 300 SDC loss
Neither party has gained anything by doing this transaction .. both parties forfeit a minimum of 300SDC and the buyer forfeits 600SDC.
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + received item = 300 SDC loss
Seller - forfeits his 300 SDC deposit + sent item 300 SDC = 600 SDC loss
Neither party has gained anything by doing this transaction either .. both parties forfeit a minimum of 300SDC and the seller forfeits 600SDC.
It would also be nice to have a way for all in the community to know how much money ends up permanently sequestered in escrow, and in what listings. That will give us an idea of the actual money supply, and also of what kind of listings are problematic.
Linking an item sale to a transaction is a big no no - this is a privacy focused solution so why would we leak such data? |
^ I am with STUPID!
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X1235
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November 02, 2015, 02:34:44 PM |
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What would prevent the buyer from lying that the purchased item has not been received?
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Wheatclove
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November 02, 2015, 02:36:07 PM |
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What would prevent the buyer from lying that the purchased item has not been received?
They fact that they'll be paying 2x the purchase price for that item if they lie. |
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X1235
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November 02, 2015, 03:18:25 PM |
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What would prevent the buyer from lying that the purchased item has not been received?
They fact that they'll be paying 2x the purchase price for that item if they lie. Probably the question wasn't clear. Let's imagine this scenario: the buyer has received the purchase but lies that he hasn't. What factor will prevent this lie? More precisely, what will be the proof that a purchase has been successfully delivered? |
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Wheatclove
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November 02, 2015, 03:36:04 PM |
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What would prevent the buyer from lying that the purchased item has not been received?
They fact that they'll be paying 2x the purchase price for that item if they lie. Probably the question wasn't clear. Let's imagine this scenario: the buyer has received the purchase but lies that he hasn't. What factor will prevent this lie? More precisely, what will be the proof that a purchase has been successfully delivered? No the question is clear. So the buyer puts up a deposit and the purchase price. The deposit is most likely equal to the purchase price. The proof is the buyer's word. It is in the best interest of both parties to be honest and secure on their end of every purchase. So an honest buyer will recieve their deposit back (only having to pay 1x the purchase price) . A dishonest buyer will lose their deposit (effectively paying 2x the purchase price). |
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X1235
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November 02, 2015, 03:41:48 PM |
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What would prevent the buyer from lying that the purchased item has not been received?
They fact that they'll be paying 2x the purchase price for that item if they lie. Probably the question wasn't clear. Let's imagine this scenario: the buyer has received the purchase but lies that he hasn't. What factor will prevent this lie? More precisely, what will be the proof that a purchase has been successfully delivered? No the question is clear. So the buyer puts up a deposit and the purchase price. The deposit is most likely equal to the purchase price. The proof is the buyer's word. It is in the best interest of both parties to be honest and secure on their end of every purchase. So an honest buyer will recieve their deposit back (only having to pay 1x the purchase price) . A dishonest buyer will lose their deposit (effectively paying 2x the purchase price). Thank you for the answer. In this context, what happens if the seller cheats that he has delivered? |
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Wheatclove
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November 02, 2015, 04:06:39 PM |
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What would prevent the buyer from lying that the purchased item has not been received?
They fact that they'll be paying 2x the purchase price for that item if they lie. Probably the question wasn't clear. Let's imagine this scenario: the buyer has received the purchase but lies that he hasn't. What factor will prevent this lie? More precisely, what will be the proof that a purchase has been successfully delivered? No the question is clear. So the buyer puts up a deposit and the purchase price. The deposit is most likely equal to the purchase price. The proof is the buyer's word. It is in the best interest of both parties to be honest and secure on their end of every purchase. So an honest buyer will recieve their deposit back (only having to pay 1x the purchase price) . A dishonest buyer will lose their deposit (effectively paying 2x the purchase price). Thank you for the answer. In this context, what happens if the seller cheats that he has delivered? He is also required to put a deposit equal to the purchase price, which they will lose. Essentially, they will be losing the cost of one item and the potential markup profit on one item. |
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X1235
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November 02, 2015, 04:56:57 PM |
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He is also required to put a deposit equal to the purchase price, which they will lose. Essentially, they will be losing the cost of one item and the potential markup profit on one item.
Sounds great! Thank you for the clarification! |
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Automatic Monkey
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November 02, 2015, 06:36:44 PM |
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Two-party escrow. What a great idea!
This is much like an old and tested way of doing business on the street. You want some product or service, let's say the price is $20. You tear a $20 bill in half, give half to the provider of the goods or service and keep the other half. Then the bill is of no value to either of you. When the contract is fulfilled you give the provider the other half. That practice works because you cannot profit by screwing anyone; all you will gain is an enemy if you do that, and you will lose the ability to do business again.
Now to do it online requires just a little modification. One reason is that the consequences of making an anonymous enemy on the internet are not significant, it's not like you are going to get cornered one day and get your ass kicked like you do on the street. The other is that you are more likely to come in contact with someone who has a non-financial motivation for screwing someone online, such as a moral objection to some type of business done on the Shadow market. So False Seller creates a listing to sell something for 100 SDT. He puts up 100 SDT of his own funds to escrow. True Buyer sends False Seller 100 SDT and puts 100 SDT into escrow. Nothing is ever delivered. False Seller gets his 100 SDT back from True Buyer, plus he gets his jollies knowing he screwed that immoral True Buyer out of 200 SDT and it cost him only listing and transaction fees.
In order to make this work against such an actor there has to be a way to make the escrow amount significantly higher than the purchase amount. Let's say each party had to put 200 SDT into escrow, it is far less likely someone would be willing to lose 100 SDT to screw someone else out of 300 SDT.
My preference to this is actually we stick to the original mechanics so.. Buyer - puts up 1x deposit + 1x purchase price Seller - puts up 1x deposit + item All goes into a multi-sig transaction that has say "30days" to settle after which neither party gets back anything (if either party tries to con the other). Instead the entire multi-sig balance gets spent as a "fee" and the miner of the next blocks get a nice bonus ... This will ensure that its impractical for the seller or buyer to gain a financial advantage by being dishonest... Example Item on sale : GPU @ $300 i.e. 300 SDC
Buyer and Seller agree sale.
Buyer - 300 SDC deposit + 300 SDC purchase price
Seller - 300 SDC deposit + send item
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + 300 SDC purchase price = 600 SDC loss
Seller - forfeits his 300 SDC deposit + did not send item = 300 SDC loss
Neither party has gained anything by doing this transaction .. both parties forfeit a minimum of 300SDC and the buyer forfeits 600SDC.
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + received item = 300 SDC loss
Seller - forfeits his 300 SDC deposit + sent item 300 SDC = 600 SDC loss
Neither party has gained anything by doing this transaction either .. both parties forfeit a minimum of 300SDC and the seller forfeits 600SDC.
It would also be nice to have a way for all in the community to know how much money ends up permanently sequestered in escrow, and in what listings. That will give us an idea of the actual money supply, and also of what kind of listings are problematic.
Linking an item sale to a transaction is a big no no - this is a privacy focused solution so why would we leak such data? I agree, with 100% of the purchase price in escrow for each party it is impossible to gain a financial advantage by cheating. But my concern is with a moral actor. The transaction fees are very low, and there will surely be people who think they can save a soul and make the world a better place by screwing a buyer of herbs and spices, or whatever, out of his money. My back-of-the-envelope calculations tell me that by sacrificing the equivalent of a few thousand USD in transaction fees, either a moral actor or a promoter of a competing coin could make the Shadow market a lousy place to do business and eventually lock up all of the SDC supply in escrow by abusing this feature with bogus sales. If the escrow amount was just some small but significant fraction about the purchase price it would be too expensive to do this, and the escrow would work exactly the same way. Just thinking ahead. |
Try ShadowCash, the first coin with instant and decentralized private transactions!
SDC address: SUPERMAN8eDvcPL6RWYMVwtPzUtqWi2zCr
Wallet Private Key: 7S6fJBEzXqJuuGCvEPcgBSbd5wmjVTvDj7591gNKcTmS7X47e98
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healthhealer4
Member
Offline
Activity: 100
Merit: 10
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November 02, 2015, 07:10:21 PM |
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Two-party escrow. What a great idea!
This is much like an old and tested way of doing business on the street. You want some product or service, let's say the price is $20. You tear a $20 bill in half, give half to the provider of the goods or service and keep the other half. Then the bill is of no value to either of you. When the contract is fulfilled you give the provider the other half. That practice works because you cannot profit by screwing anyone; all you will gain is an enemy if you do that, and you will lose the ability to do business again.
Now to do it online requires just a little modification. One reason is that the consequences of making an anonymous enemy on the internet are not significant, it's not like you are going to get cornered one day and get your ass kicked like you do on the street. The other is that you are more likely to come in contact with someone who has a non-financial motivation for screwing someone online, such as a moral objection to some type of business done on the Shadow market. So False Seller creates a listing to sell something for 100 SDT. He puts up 100 SDT of his own funds to escrow. True Buyer sends False Seller 100 SDT and puts 100 SDT into escrow. Nothing is ever delivered. False Seller gets his 100 SDT back from True Buyer, plus he gets his jollies knowing he screwed that immoral True Buyer out of 200 SDT and it cost him only listing and transaction fees.
In order to make this work against such an actor there has to be a way to make the escrow amount significantly higher than the purchase amount. Let's say each party had to put 200 SDT into escrow, it is far less likely someone would be willing to lose 100 SDT to screw someone else out of 300 SDT.
My preference to this is actually we stick to the original mechanics so.. Buyer - puts up 1x deposit + 1x purchase price Seller - puts up 1x deposit + item All goes into a multi-sig transaction that has say "30days" to settle after which neither party gets back anything (if either party tries to con the other). Instead the entire multi-sig balance gets spent as a "fee" and the miner of the next blocks get a nice bonus ... This will ensure that its impractical for the seller or buyer to gain a financial advantage by being dishonest... Example Item on sale : GPU @ $300 i.e. 300 SDC
Buyer and Seller agree sale.
Buyer - 300 SDC deposit + 300 SDC purchase price
Seller - 300 SDC deposit + send item
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + 300 SDC purchase price = 600 SDC loss
Seller - forfeits his 300 SDC deposit + did not send item = 300 SDC loss
Neither party has gained anything by doing this transaction .. both parties forfeit a minimum of 300SDC and the buyer forfeits 600SDC.
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + received item = 300 SDC loss
Seller - forfeits his 300 SDC deposit + sent item 300 SDC = 600 SDC loss
Neither party has gained anything by doing this transaction either .. both parties forfeit a minimum of 300SDC and the seller forfeits 600SDC.
It would also be nice to have a way for all in the community to know how much money ends up permanently sequestered in escrow, and in what listings. That will give us an idea of the actual money supply, and also of what kind of listings are problematic.
Linking an item sale to a transaction is a big no no - this is a privacy focused solution so why would we leak such data? This is system currently being used on Bitbay and it's successful ,yes this should be used . It make the deal even when a trade is in progress. |
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Wheatclove
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November 02, 2015, 08:22:16 PM |
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Two-party escrow. What a great idea!
This is much like an old and tested way of doing business on the street. You want some product or service, let's say the price is $20. You tear a $20 bill in half, give half to the provider of the goods or service and keep the other half. Then the bill is of no value to either of you. When the contract is fulfilled you give the provider the other half. That practice works because you cannot profit by screwing anyone; all you will gain is an enemy if you do that, and you will lose the ability to do business again.
Now to do it online requires just a little modification. One reason is that the consequences of making an anonymous enemy on the internet are not significant, it's not like you are going to get cornered one day and get your ass kicked like you do on the street. The other is that you are more likely to come in contact with someone who has a non-financial motivation for screwing someone online, such as a moral objection to some type of business done on the Shadow market. So False Seller creates a listing to sell something for 100 SDT. He puts up 100 SDT of his own funds to escrow. True Buyer sends False Seller 100 SDT and puts 100 SDT into escrow. Nothing is ever delivered. False Seller gets his 100 SDT back from True Buyer, plus he gets his jollies knowing he screwed that immoral True Buyer out of 200 SDT and it cost him only listing and transaction fees.
In order to make this work against such an actor there has to be a way to make the escrow amount significantly higher than the purchase amount. Let's say each party had to put 200 SDT into escrow, it is far less likely someone would be willing to lose 100 SDT to screw someone else out of 300 SDT.
My preference to this is actually we stick to the original mechanics so.. Buyer - puts up 1x deposit + 1x purchase price Seller - puts up 1x deposit + item All goes into a multi-sig transaction that has say "30days" to settle after which neither party gets back anything (if either party tries to con the other). Instead the entire multi-sig balance gets spent as a "fee" and the miner of the next blocks get a nice bonus ... This will ensure that its impractical for the seller or buyer to gain a financial advantage by being dishonest... Example Item on sale : GPU @ $300 i.e. 300 SDC
Buyer and Seller agree sale.
Buyer - 300 SDC deposit + 300 SDC purchase price
Seller - 300 SDC deposit + send item
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + 300 SDC purchase price = 600 SDC loss
Seller - forfeits his 300 SDC deposit + did not send item = 300 SDC loss
Neither party has gained anything by doing this transaction .. both parties forfeit a minimum of 300SDC and the buyer forfeits 600SDC.
after 30 days (as defined)
Buyer - forfeits his 300 SDC deposit + received item = 300 SDC loss
Seller - forfeits his 300 SDC deposit + sent item 300 SDC = 600 SDC loss
Neither party has gained anything by doing this transaction either .. both parties forfeit a minimum of 300SDC and the seller forfeits 600SDC.
It would also be nice to have a way for all in the community to know how much money ends up permanently sequestered in escrow, and in what listings. That will give us an idea of the actual money supply, and also of what kind of listings are problematic.
Linking an item sale to a transaction is a big no no - this is a privacy focused solution so why would we leak such data? I agree, with 100% of the purchase price in escrow for each party it is impossible to gain a financial advantage by cheating. But my concern is with a moral actor. The transaction fees are very low, and there will surely be people who think they can save a soul and make the world a better place by screwing a buyer of herbs and spices, or whatever, out of his money. My back-of-the-envelope calculations tell me that by sacrificing the equivalent of a few thousand USD in transaction fees, either a moral actor or a promoter of a competing coin could make the Shadow market a lousy place to do business and eventually lock up all of the SDC supply in escrow by abusing this feature with bogus sales. If the escrow amount was just some small but significant fraction about the purchase price it would be too expensive to do this, and the escrow would work exactly the same way. Just thinking ahead. I believe a reputation system may be integrated to combat the above scenario. I believe the scenario is highly unlikely, but the market users may ultimately be able to protect themselves from these situations with sites similar to safeorscam. |
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dasource
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November 02, 2015, 09:27:24 PM |
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<snip>
I agree, with 100% of the purchase price in escrow for each party it is impossible to gain a financial advantage by cheating.
But my concern is with a moral actor. The transaction fees are very low, and there will surely be people who think they can save a soul and make the world a better place by screwing a buyer of herbs and spices, or whatever, out of his money.
I see your point but you have to remember there is a risk of doing business anywhere. Whether a seller or buyer. I remember years ago I bought several Alienware PCs (before dell acquired them) via ebay. Paid via Paypal. Long story short I was shipped one device with the wrong specs, whilst dealing with the seller to resolve this it took over 30 days. Turns out the seller was coning people yet Paypal did nothing to help me. Now if the same was attempted on ShadowMarket the seller would go bankrupt very quickly unless he had deep pockets. My back-of-the-envelope calculations tell me that by sacrificing the equivalent of a few thousand USD in transaction fees, either a moral actor or a promoter of a competing coin could make the Shadow market a lousy place to do business and eventually lock up all of the SDC supply in escrow by abusing this feature with bogus sales.
Worse case, but your assuming no real sellers or buyers are using it. The whole idea behind this type of escrow is that whilst a "moral" actor may be able todo this once, twice, three or even half a dozen times. It is costing money which they will "never" recover. Also people who are doing business today via other means can publish their Shadow Network Identity which would make it easier to trust certain sellers. Obviously to begin with it will take a little time to get going but that is the case as with any product or service. As for the actual escrow, we are talking about it being locked for "thirty" days if there is a dispute (thirty days was a suggestion but it could be less or more based on feedback from alpha). If the escrow amount was just some small but significant fraction about the purchase price it would be too expensive to do this, and the escrow would work exactly the same way. Just thinking ahead.
Certainly worth playing with the model during the alpha phase however I think we have to believe that amongst the "bad" actors we will have a larger portion of "good" actors. |
^ I am with STUPID!
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coins101
Legendary
Offline
Activity: 1456
Merit: 1000
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November 03, 2015, 12:36:05 AM |
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Automated escrow is difficult to get right.
Ratings can be abused - do small scale, get good feedback; then go big and go home.
Insurance is a better option, or can be used to supplement.
Every transaction has x% placed in multi-sig escrow and the pot gets bigger and bigger. If escrow fails or one of the sellers is a scammer, then the pot can payout.
This has plenty of problems too, but just a thought.
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dasource
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November 03, 2015, 09:58:47 AM |
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Automated escrow is difficult to get right.
Ratings can be abused - do small scale, get good feedback; then go big and go home.
Game theory is very weak as a security model,
but on internet probably superior to reputation,
and certainly to assuming trusted third parties.
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^ I am with STUPID!
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coins101
Legendary
Offline
Activity: 1456
Merit: 1000
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November 03, 2015, 09:24:25 PM |
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Blazin8888
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November 04, 2015, 02:02:13 AM
Last edit: November 04, 2015, 03:26:13 AM by Blazin8888 |
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Greetings Shadow team, what is the status of the market?
Are things looking on the up and up for this month?
....good to have my stash of SDC back. keep up the hard work and dedication. looking forward to seeing the best market possible !
very excited to see a AAA market being developed finally for the crypto scene. Its about time let me just say that.
-Blazin8888
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