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Wouldn't that add a transactional cost to bitcoin, not unlike PayPal or Visa?



I've spent a couple months trying to come up with ways to protect bitcoin consumers, and the only thing I can think of is for exchanges to purchase some kind of high-risk insurance which will cover losses by the exchange. Nothing else will protect users, as far as I can tell, precisely because of bitcoin's irreversible transactions.

Honestly, the best thing for the bitcoin ecosystem is to learn from Paypal and Visa, and to emulate their good qualities. I know it's popular to hate on the existing ways of doing things, but the existing ways have a lot of hidden wisdom embedded in them.


Well, you could create a certification program in which member exchanges agree to a set of financial standards between each other - e.g. they would automatically do charge backs on disputes within the system.

This could lower the transactional-risk cost between doing business with certified exchanges, and still allow users to do business outside but with the increased transactional costs.

But then again you're just building another financial exchange system controlled by the certificate issuer - except it would need to be backed by some form of international enforcement (e.g. WTO?).

Where is the benefit to bitcoins then?


All of you guys seem not to be aware of the things you can do with Bitcoin. Eg: multi-signature wallets.

You won't need insurance when the coins simply can't be stolen.


I am aware of multisig, but multisig precludes realtime trading, which is usually the main point of an exchange.

It'd be a good idea for Coinbase to implement, though.


Some Googling only brings up names of exchanges that are working on multi signature wallets. Do you have a link to how to set it up on your own machine?


Sure: https://www.youtube.com/watch?v=zIbUSaZBJgU

But there are also some online wallets that already implemented it:

https://greenaddress.it/en/

https://www.bitgo.com/

https://www.bitalo.com/ (this one is also at the same time something like localbitcoins.com)


Yes, of course. And since transactions are completely irreversible on Bitcoin the insurance rate would have to be higher than otherwise, as there's no collateral for the insurance company to claim when they do payout.




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