Comment by mcbridematt
8 years ago
Bitcoin was floated as a solution for people who were wronged by PayPal and the banks, before the speculators moved in.
8 years ago
Bitcoin was floated as a solution for people who were wronged by PayPal and the banks, before the speculators moved in.
Bitcoin shifts all the counterparty risk to the buyer. PayPal shifts most of the counterparty risk to the seller.
As a buyer, I don't care for that feature of Bitcoin.
Bitcoin supports multisig transactions, which allows a buyer and seller to choose a third-party mediator who can side with one of them in the event of a dispute. If you find that all the counterparty risk in your transactions are placed on the buyer this is a problem with your use of Bitcoin, not Bitcoin itself.
We already have this mediator in the fiat world, though. It's called PayPal, or the bank that issued my VISA, or whomever else sits in between the merchant and myself. It also takes a ~2-3% cut for this service, and returns ~1% to me in cashback.
Why will this be any cheaper, or safer, or fairer with Bitcoin? All the incentives in this business align with the buyer. 90% of the time, I have a choice between many equivalent merchants, all of whom want my business. I will go with the one that supports my cash-back credit card - whose issuer will almost always side with me in a dispute.
Once these escrow services become popular in the crypto world, you're back to square one. The reasons for why PayPal sucks for some of its users have nothing to do with fiat money, and everything to do with the nature of the escrow business. It would be just as shitty for said users if it transacted in Bitcoin, Dogecoin, or silver bullion.
We already have third party mediators; paypal and visa.
The mediator can decide against your case just like Paypal or Visa can. Even worse, now I have to find some random mediator the seller trusts.
How is that better than plain bank transactions or paypal? The fees are not even cheaper for that "privilege" of having some random mediator play paypal-on-the-blockchain.
If that was an aim it would be naive not to predict speculators would arrive, as they are there for everything else.