W3C home > Mailing lists > Public > public-webpayments@w3.org > September 2013

RE: Attempts for payment escrow

From: Goss, Brian C., M.D. <Goss.Brian@mayo.edu>
Date: Tue, 17 Sep 2013 16:11:01 +0000
To: "'eanders@pobox.com'" <eanders@pobox.com>, "'public-webpayments@w3.org'" <public-webpayments@w3.org>
Message-ID: <FFE335820B1BFF4F8E8619F446F2D87F4C1D52AB@MSGPEXCEI32B.mfad.mfroot.org>
Erik,

> Example: Buyer and Seller must both use their digital signature to unlock 
> the spending of a sent virtual currency.

The private key creating the digital signature effectively _is_ the money in 
Bitcoin; if I steal your private key, I have your money.  If I delete your 
only copy of the private key, I delete your money.  It's not so much a 
condition set by Bitcoin itself...just like the physical dollar bill is itself 
the money; I don't complain that there is this condition that I have to 
actually physically have it to spend it.

>IMO, this is one of the largest dropped balls in Bitcoins, Ripple, etc... 
>Also proof of transactions is the 2nd dropped ball.

Do you mean that it is bad that it is very easy to prove that a transaction 
occurred? In Bitcoin, it is very easy to prove a transaction occurred (the 
transaction ledger is public). In fact, if I send you 1 bitcoin, it's trivial 
for me to prove I created that transaction by signing a message with the 
corresponding private key (similarly, you could prove yourself to be the 
recipient too if you wanted).

>A web payment system will never be general public accepted if "all 
>transactions are always final, and no, there is no recourse if you were 
>ripped off, too bad, so sad".

Should we try to make our money also be our police?  A euro or dollar doesn't 
try to detect crime or right wrongs, why should our virtual currency?

The tradeoff between security and convenience is a big problem -- just ask the 
credit card industry. A credit card number functions like a private key; since 
credit card companies require that we disclose it to merchants repeatedly, 
they are forced to build in anti-crime and anti-fraud into the processing 
system because it is so widely abused.  Credit card companies sometimes even 
have to reverse transactions at merchant expense as well as their own.

Bitcoin & Ripple take the opposite approach of favoring security over 
convenience by keeping private keys private.  This forces the burden of 
preventing crimes primarily onto the user (similar to pick pocket 
prevention -- your bank doesn't ensure you won't get your cash stolen) and the 
burden of prosecuting crimes onto governments (the bank doesn't go after the 
bad guy for you). That's why Bitcoin and Ripple can be cost competitive with 
credit card companies and simple to implement.

Brian

-----Original Message-----
From: public-webpayments-request@listhub.w3.org 
[mailto:public-webpayments-request@listhub.w3.org] On Behalf Of 
eanders@pobox.com
Sent: Tuesday, September 17, 2013 10:01 AM
To: public-webpayments@w3.org
Subject: Attempts for payment escrow

>In short, attaching conditions to the spending of sent virtual currency.
>
> Example: Buyer and Seller must both use their digital signature to unlock 
> the spending of a sent virtual currency.
>
>IMO, this is one of the largest dropped balls in Bitcoins, Ripple, etc... 
>Also proof of transactions is the 2nd dropped ball.
>
>Sure, not perfect, some risk like extortion for very large transfers, but its 
>a step in the right direction.  A web payment system will never be >general 
>public accepted if "all transactions are always final, and no, there is no 
>recourse if you were ripped off, too bad, so sad".
>
>Erik



Received on Tuesday, 17 September 2013 20:41:17 UTC

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