Author Topic: BitBazaar concept  (Read 7286 times)

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Offline gamey

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This is interesting.  So it doesn't appear to be a true Nash equilibrium if I understand correctly.  I'm trying to think of why this would be.  Why not use a true Nash equilibrium? 

I suspect it has something to do with the asymmetry of the "game".  Since the buyer always has to put up the purchase price and the seller doesn't, the game has no true equilibrium.  ie it can't be made fair therefore no equilibrium exists.

NashX + trust system seems to be quite useful though.
« Last Edit: December 13, 2014, 02:26:18 am by gamey »
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Offline Ander

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  Now that I think about it there is one way that this can be counteracted:  if an individual can see the number of unresolved disputes.  In this case leaving an issue unresolved with harm the merchant by the loss of future sales.   A scammer would have to keep his margins thin to appear within the noise of normal business disputes.

Exactly...reputation systems work better than this escrow system.
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Offline bytemaster

The main problem with the blackcoin escrow system is:

If I scam you, you have a choice:

Lose your original money PLUS the collateral, in order to hurt me back.  But you get hurt even worse this way.

OR.

Lose just your original money, and agree to let me have the money I scammed from you.



Once you have suffered the original loss, that money is basically a sunk cost at this point.  Sure, you can lose MORE money (the escrow collateral) in order to hurt me back, but what do you really gain from hurting me?  If this is a one time deal and you're never going to interact with me again either way, you are better off sucking it up and not losing more money.


If that's not enough, I might even sweeten the deal, offering you half your initial money back if you agree to release the funds out of escrow.

 Every decision should be neutral.  The "scammer" won't scam because he gains nothing by "scamming" and infact loses. Like the global nuke strategy of MAD.

Hrmmm. 

There other side is the buyer can't claim they didn't receive the item so maybe that is correct.  It just has to be looked at as a monolithic process. 

This is where I first heard of it being used in crypto-currencies.  This is a great infographic.  http://nashx.com/HowItWorks

NashX ignores the fact that the criminal can play the odds and win on average.

Lets assume the following both people put $100 into a hat and now both have to agree how to divide the proceeds from the hat.

1) Honest individuals would clearly just agree to each pull out $100
2) Dishonest individual will say give me $190 and you take $10 or you get nothing.    Now the honest party is faced with a choice of getting $10 or nothing.  $10 is clearly better than nothing to they agree to it.   The dishonest individual just stole $90.    In this case the honest party may feel that it is worth the loss of $10 to cause the other guy to lose $100 and say no.   In this case the dishonest individual can back off and say, "ok, 120:80" final offer.   The dishonest individual can back all the way back to $101:99 and still make a profit.  The honest individual is faced with the choice, "Am I willing to lose $99 to prevent the other party from earning $1? 

   Now the attacker doesn't have to win every time.  He can play the Odds.   If 99% of the time an honest individual will settle for $95 and he repeats the scam 100 times, then he will earn $500 when he wins and lose $100 for a net profit of $400.   

   So NashX only works when the honest individuals are willing to take one for the team rather than defect for personal profit.   Because few people are willing to "trust the crowd" they will almost always defect and thus the scammer can almost always win.   

  Now that I think about it there is one way that this can be counteracted:  if an individual can see the number of unresolved disputes.  In this case leaving an issue unresolved with harm the merchant by the loss of future sales.   A scammer would have to keep his margins thin to appear within the noise of normal business disputes. 




 
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Offline CryptoPrometheus

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I am not convinced that it really makes sense , as an ultimate end goal, for most business transactions to be so opaque. I understand the present need, since we are still under duress (threat of violence, theft-tax, and coersion from gov't). But  assuming we found our way to a mostly "voluntary" society, wouldn't this opaqueness just encourage more underhandedness and shady dealings?

Just food for thought, but here's something to chew: how to prevent the sale of Stolen goods? If I was a criminal inclined towards stealing property, an anonymous and seamless way to transport "goods" around the world would be a huge boon for me and my gang.  I am not arguing against the right and option for personal privacy, just trying to figure out if we are barking up the right tree....I mean, besides "black market" items, who really needs, or will need in the future, this type of anonymity when it comes to legitimate business transactions?

As far as the escrow issue, won't insurance take care of that? Pay a spread, insure against theft/loss. The actuary company/DAC will determine rates based on the (soon to come) sophisticated reputation system.
« Last Edit: December 13, 2014, 12:46:30 am by crypto_prometheus »
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Offline starspirit

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Just an FYI. In a previous thread from early November, I raised the idea of establishing such a market-place on the exchange of scripts, for which I think there would be high demand in the current community, as well as helping the broader bitShares environment. See reply #7 here https://bitsharestalk.org/index.php?topic=11004.msg145279#msg145279 if interested in the types of scripts I thought people might find of value.

Offline gamey

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The main problem with the blackcoin escrow system is:

If I scam you, you have a choice:

Lose your original money PLUS the collateral, in order to hurt me back.  But you get hurt even worse this way.

OR.

Lose just your original money, and agree to let me have the money I scammed from you.



Once you have suffered the original loss, that money is basically a sunk cost at this point.  Sure, you can lose MORE money (the escrow collateral) in order to hurt me back, but what do you really gain from hurting me?  If this is a one time deal and you're never going to interact with me again either way, you are better off sucking it up and not losing more money.


If that's not enough, I might even sweeten the deal, offering you half your initial money back if you agree to release the funds out of escrow.

 Every decision should be neutral.  The "scammer" won't scam because he gains nothing by "scamming" and infact loses. Like the global nuke strategy of MAD.

Hrmmm. 

There other side is the buyer can't claim they didn't receive the item so maybe that is correct.  It just has to be looked at as a monolithic process. 

This is where I first heard of it being used in crypto-currencies.  This is a great infographic.  http://nashx.com/HowItWorks
« Last Edit: December 13, 2014, 12:07:46 am by gamey »
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Offline Ander

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The main problem with the blackcoin escrow system is:

If I scam you, you have a choice:

Lose your original money PLUS the collateral, in order to hurt me back.  But you get hurt even worse this way.

OR.

Lose just your original money, and agree to let me have the money I scammed from you.



Once you have suffered the original loss, that money is basically a sunk cost at this point.  Sure, you can lose MORE money (the escrow collateral) in order to hurt me back, but what do you really gain from hurting me?  If this is a one time deal and you're never going to interact with me again either way, you are better off sucking it up and not losing more money.


If that's not enough, I might even sweeten the deal, offering you half your initial money back if you agree to release the funds out of escrow. 


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Offline gamey

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Thoughts on BlackCoin's double deposit two party escrow?


http://www.reddit.com/r/Bitcoin/comments/2fil2x/does_openbazaar_plan_on_implementing_twoparty/

"For example, I want to sell you a bauble. You deposit your payment into a multi-sig address that requires both our consent to release the funds. I can verify that deposit before sending you the bauble.

In addition to that, we also agree to deposit a certain amount of funds into a second multi-sig address that requires both our consent, to be used as collateral against the trade.

If I don't satisfy the trade, you won't release me the funds. If I satisfy the trade and you still don't release the funds, then you risk losing those funds and your collateral. This is important, because it means we both have more to lose by scamming each other, than by completing an honest trade.
"

This is a Nash equilibrium.  AFAIK solutions that are workable fall into 2 categories.  Game-theory which requires more money upfront or a escrow system utilizing a  third party which charges a %.

Nash equilibrium has the upside of low overhead because there is no arbiter but requires people selling expensive items to have capital available and willing to risk it on the tiny chance something strange happens.

Escrow/arbiter charges people a fee on every transaction and is likely more difficult to program.  (You need all the communication & management infrastructure )

Oh yea, there is a third option and thats caveat emptor and rely on a trust system.
« Last Edit: December 12, 2014, 11:48:39 pm by gamey »
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Offline hpenvy

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Thoughts on BlackCoin's double deposit two party escrow?


http://www.reddit.com/r/Bitcoin/comments/2fil2x/does_openbazaar_plan_on_implementing_twoparty/

"For example, I want to sell you a bauble. You deposit your payment into a multi-sig address that requires both our consent to release the funds. I can verify that deposit before sending you the bauble.

In addition to that, we also agree to deposit a certain amount of funds into a second multi-sig address that requires both our consent, to be used as collateral against the trade.

If I don't satisfy the trade, you won't release me the funds. If I satisfy the trade and you still don't release the funds, then you risk losing those funds and your collateral. This is important, because it means we both have more to lose by scamming each other, than by completing an honest trade.
"

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Offline gamey

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Is the following a possible solution? Evidence of physical transfer and receipt could be provided by postal tracking. Once the escrow agent is provided copy of delivery receipt, the money is released to the seller. People could still exchange without such an arrangement, but at their own risk.

I'll sell you a box of gold if you think this is a solution.  How many kilos you want?  Low low price $100 a kg. 

edit - Ok I'm being a bit dickish.  There  is nothing preventing people from sending bricks in the mail.  THere is nothing stopping people from taking pictures of bricks in the box after removing the legitimate shipped items.  This sort of proof does nothing.  Although E-bay/Paypal may use it, they also know identities which limits how much it can be done.
« Last Edit: December 12, 2014, 11:46:56 pm by gamey »
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Offline starspirit

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The biggest problem for a fully crypto ebay is that it will suffer from the opposite problem that ebay does. Ebay suffers from rouge buyers, who receive the item and then complain that they didn't. Ebay always sides with the buyer since there are more of them and reverses the charges.

Since there are no reversible charges in crypto, a crypto ebay will suffer from rouge sellers, who wont ship the item, but will take payment.

The only possible way of resolving this is to have a trusted physical distribution center which sellers post their items to, the center then confirms the item, forwards it on and acts as escrow for the payment as well.

This is fantastically difficult and expensive to do in practice.

What we need is way to get as close to this as possible with the least amount of pain.
Is the following a possible solution? Evidence of physical transfer and receipt could be provided by postal tracking. Once the escrow agent is provided copy of delivery receipt, the money is released to the seller. People could still exchange without such an arrangement, but at their own risk.

Offline xeroc

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oh .. I meant for the mobile wallet to agree on the QR code syntax .. kind of obvious :)

Offline bytemaster

I should be able to see order on laptop, then pay on phone by entering the same info in my phone wallet.
Best would (IMHO) be to come up with the same kind of payment scheme as is used in bitcoin QR-codes .. something like "ADDRESS?amount=3&asset=USD" ..

We already have that.   But QR and URL links are not always functional and so you ALSO need to show the user:  "account": X,  "memo": Y, "amount": Z USD so they can manually pay if they like or use a wallet that does not support QR / URL.
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Offline xeroc

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I should be able to see order on laptop, then pay on phone by entering the same info in my phone wallet.
Best would (IMHO) be to come up with the same kind of payment scheme as is used in bitcoin QR-codes .. something like "ADDRESS?amount=3&asset=USD" ..

Offline bytemaster

[12/12/14, 1:10:36 PM] macman2k: The plugin does not work for me and doesn't provide me the info to manually pay
[12/12/14, 1:11:05 PM] macman2k: The link should work but sometimes the Operating System screws up or you are using a non standard wallet
[12/12/14, 1:11:40 PM] macman2k: or paying from a different computer, so it needs to give the user payment instructions and show the robohash + memo + amount


I would go back and refine your recent one.   Any cart that does not display manual instructions for making payment when the URL support is unavailable has problems.

I should be able to see order on laptop, then pay on phone by entering the same info in my phone wallet. 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.