Re: [tlug] Finance regulators to recognize Bitcoin as "money"

[Edmund Edgar <lists@example.com>]

On 16 October 2016 at 22:09, Stephen J. Turnbull
<turnbull.stephen.fw@example.com> wrote:
> Sure, but you still have the problem that those receiving the bitcoin
> can cheat, and currency makes that easier.  This should be obvious in
> a country where "Ore-Ore" is not the abbreviated name for a
> chocolate/cream sandwich cookie in Portland.  So dispute
> intermediation doesn't go away, and I suspect it ds is oesn't actually get
> all that much less costly.  Somebody else may have to pay for it,
> though.

The ore-ore scam thing is an interesting comparison because compared
to the way money works in the US and Europe, Japanese domestic
furikomi is quite a "pure" money transfer system, quite close to cash:
Money can be withdraw as soon as it lands, and it's unusual for a bank
to revert a transaction or get involved in disputes. The upside of
that is that it's cheap, fast and reliable. The downside is obviously
that it's easier to use it for fraud.

Clearly in the same way that you don't want to use cash for everything
in meat-space, you don't want to use digital cash for everything in
digital space; Sometimes you may want dispute resolution bundled with
your payment mechanism. However, I would maintain that there are a lot
of times when digital cash *is* what you want. Satoshi mentions
"small, casual payments" where you would have to either spend much
more on dispute resolution than the situation justifies or do it so
cheaply that it ends up being more useful to the scammer (who knows
how to game the system and sets up the scam so that they win) than to
the scammee. There's a *lot* of online theft going on based on
exploiting PayPal dispute resolution rules.

The other interesting thing about unbundling dispute resolution is
that even where you think you need it, you're open to a lot of
different ways to do it rather than being locked into the one that
your payment processing system provides. In the bitcoin world some
people do transactions with an arbitrator, so the buyer locks funds
such that unlocking it requires 2 of 3 signatures (buyer, seller,
arbitrator). But IIUC people have actually had quite a bit of success
with a combination of seller reputation and 2-of-2 (just buyer and
seller). This is interesting because not only is it free, it works in
a lot of scenarios where there's just no practical way for an
arbitrator to work out who should get the funds.

>From an engineering angle having an irrevocable payment system at the
base layer makes a lot of sense, because you can build whatever
revocable systems you like on top of it, whereas you can't build an
irrevocable system (or many kinds of revocable systems) on top of a
revocable system.

-- 
-- 
Edmund Edgar
Founder, Social Minds Inc (KK)
Twitter: @edmundedgar
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http://www.socialminds.jp

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