[DanBC]

Bitcoin provides zero protection to buyers.

It's delusional to think people would want to buy stuff from ebay without the protections from Paypal or their credit card provider.

Current consumer protection advice is to walk away from any sale that uses things like Western Union or cash transfer - and this is likely to be extended to include Bitcoin as soon as anyone in the general public hears about Bitcoin.

[icebraining]

Still, a simple escrow system on top of Bitcoin could provide the same guarantees while potentially being cheaper. It's not like Bitcoin prevents such systems from being created - on the contrary, it has mechanisms to support them.

[jfoster]

What makes you think it would be much cheaper? I think it might have to be more expensive. The anonymity aspects of bitcoin could result in more fraudsters getting away with fraud.

[icebraining]

I'm not saying it would; I'm saying it potentially could.

But the CC system also provides anonymity, since most cards used for fraud are stolen anyway, so the fact they're tied to a real person is irrelevant.

Bitcoin, on the other hand, doesn't suffer from the same problem as CC - that the payment info must be shared with every single merchant - so it's potentially must harder to steal; Target wouldn't have a copy of your bitcoin wallet just because you bought something from them, for example.

[nmj]

The anonymity aspects of bitcoin could result in more fraudsters getting away with fraud.

Ignorance creates comments like this. Bitcoin transactions are not reversible, you have zero opportunity for fraud as a buyer.

[jfoster]

Read above. We are discussing a hypothetical system that provides a PayPal-like guarantees layer on top of bitcoin. As you point out, bitcoin transactions are always irreversible. That's what could make it more expensive in my view. The service would always be reimbursing buyers involved in failed transactions at its own expense.

[venaoy]

And credit cards provides zero protection against identity theft. In fact, they even enable it because you give your full billing info (credit card number, address, etc) when paying an online merchant with a card.

You see, no payment technology is perfect. Credit cards have flaws. Bitcoin has flaws. But Bitcoin is better than credit cards for the average consumer. In the last 10 years:

- I have had to deal with 2 identity theft incidents that caused me major hassles and waste of time. Bitcoin would have prevented this because a Bitcoin transaction authorizes 1 and only 1 payment to a specific address. Bitcoin utilizes cryptography to guarantee that, not blind faith in the merchant not being compromised by hackers...

- on the other hand I have never had the need to issue a credit card chargeback, so this protection of credit cards was, although real, unneeded, useless to me.

[lnanek2]

PayPal protections are usually considered a disaster for everyone involved. Sellers and companies are constantly getting their accounts frozen, buyers are constantly getting shipped bottles of shampoo instead of camera equipment, priceless violins are being destroyed, etc..