Published on: 2014-04-26T19:37:59+00:00
Peter Todd proposed a mechanism similar to Jeremy Spilman's micropayment channel for a single payment. The seller would only release the goods once they received a valid transaction signed by the buyer sending the escrowed funds. This prevents the buyer from always requesting a refund. Reddit user RubenSomsen suggested a similar idea on Mycelium, where users can temporarily lock their bitcoins in a 2-of-2 transaction with a potential buyer before meeting.The concern with this proposed mechanism is whether wallet UIs can handle it without being too complicated for users, potentially leading them to switch to a more user-friendly option. However, there may be a way to present it in a slick and intuitive manner.In 2014, Mike Hearn proposed a mechanism for Bitcoin transactions involving an escrow service. Similar to Todd's proposal, sellers would only release goods once they had received a valid transaction signed by the buyer sending the escrowed funds. This proposal was also similar to Spilman's micropayment channel.When it comes to online shopping, the concern of buyers always requesting refunds has been addressed by e-commerce platforms and marketplaces through return policies. These policies have specific time frames for returns and track the frequency of returns, with the ability to suspend accounts if necessary. Retailers also utilize customer reviews and ratings to help consumers make informed decisions before purchasing. Some payment methods, like PayPal, offer buyer protection programs for eligible purchases. Overall, e-commerce platforms and retailers have taken steps to minimize the risk of frequent refunds through clear return policies, customer reviews, and buyer protection programs.In high-value transactions, existing escrow solutions take advantage of the fact that funds will be sent before they actually are. For example, Localbitcoins allows sellers to escrow their funds prior to release to the buyer. With nLockTime, a third-party escrow agent is not required. Instead, the buyer signs a refund transaction that unlocks at a future time before sending the funds to the escrow address. Mycelium's Local Trader functionality already includes communication between buyers and sellers, and it can be extended to self-escrow. Transaction malleability is an issue that needs to be addressed, and adding a third-party escrow to the two-party escrow can be a measure to manually release locked funds if malleability is a problem. Additionally, a future soft-fork like Pieter Wuille's BIP62 can eliminate malleability.
Updated on: 2023-08-01T09:03:56.526175+00:00