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Author Topic: Are there protocols for secure virtual goods - BTC transactions?  (Read 749 times)
Dan The Man
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March 29, 2012, 12:36:32 PM
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Is there any kind of generic protocol built that can securely transact digital "goods" for bitcoins between two untrusting parties in an automated fashion? I was thinking of something like this:

Say you are sending someone money in the mail (pretend its instant mail for a moment) for bitcoins, but you don't trust them. What you would do is whoever is the person that goes first, decides what is the minimum amount that they would trust the other person with, or simply not care if they lost it. It might be 10 cents say. I don't mind taking a risk of losing a dime. So you break the transaction however big, into 10 cent chunks, and send it a dime at a time. Each time you get a little bit of bitcoin back until the whole transaction is complete and nobody had to use a trusted third party or stick their neck on the line too much.

Now obviously this would be slow as heck and expensive with mailing money. But maybe it could be sped up for digital goods. Say a video file broken up into short segments, or say paypal dollars after they have been safely withdrawn from paypal. It would have to be something that has continuous value for arbitrary smaller fractions, not only valuable as a whole. And since bitcoin transactions are easily verifiable, if the other transacted good it is something that both parties can agree on the verification of, then the whole process could be automated, with the software doing the verification and nobody taking any risk of (much) scamming.

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Revalin
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March 29, 2012, 12:53:34 PM
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https://github.com/FellowTraveler/Open-Transactions

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March 29, 2012, 07:21:41 PM
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It would have to be something that has continuous value for arbitrary smaller fractions, not only valuable as a whole.

Then all you are describing is the granularity for how something is sold.  In the physical world, commodities have this property and most everything else sold does not.  The individual components can be purchased individually but the value when you are buying generally comes from the fact that you are getting a complete product.

Or for instance, let's use an example from the physical world where I am buying equipment from NewEgg for a new mining rig.  Say they don't have everything in stock.  They bill me for each shipment.  If they ship the mobo, chassis, RAM, psu, etc. -- but not the GPUs, I've paid for something that has essentially no value to me (as a mining operator).

Now instead if I buy a contract for 100,000 banner ad impressions of online advertising but I settle at the close of each day, the granularity is per impression.  If I had 4,700 impressions for the day then I pay exactly 4.7% of the total contract.

I don't know of many virtual goods that have a granularity smaller than the unit in which they are commonly sold.

Do you have a use case where what you are describing is needed?

Dan The Man
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March 29, 2012, 07:53:35 PM
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For some reason my mind is stuck on bad things. But they are still examples:
email addresses, credit card info, porn.

Maybe a better example is cpu cycles or computing time. Supposing that you get your computing time after two confirmation, you could continuously pay bitcoins as you are getting your computing time. That way if the seller is dishonest, the most you are out is 20 minutes worth of payment. Routing services are another one that's similar.

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