Topic: BitBay OFFICIAL BITBAY Thread Smart Contracts Decentralized Markets Rolling Peg - page 281. (Read 542094 times)

No I am sorry I dont have it anymore, maybe David can take a picture of it if he still has it

Its an interesting idea but another moving part and potentially can be gamed, however it may help mitigate running costs of double escrow.. in the blockchain one its a bit of work to validate the transaction but maybe in bitpay no need for that because contracts are relayed as the latest ones always.

I would say yes as it should not be to difficult to implement. So it will be a pain to begin with of course but as you go and build a high enough reputation it will get cheaper? You earned your selling stripes so to speak. I'd like to hear from dev or someone close to him to confirm. I think that would be a big plus personally and should be added after thinking about the obvious, how much rep, how much reduction in deposit, aged account bonus reduction etc.

Does amount of deposit required for vendor adjust according to reputation?

I just popped by to play devils advocate pal. I totally understand the plus and negative of the trade off. As you must know it is always going to be hard if not impossible for a system that is fair for all. You touched upon the upfront deposit, I agree they will be a pain for medium to big sellers to begin with but after x amount of successful trades the big seller who has proven himself legit will not have to pay high deposits if any? S/he will also have the incentive to carry on the honest dealing to keep his feedback at a level where he gets the benefit of the lower deposit.

Double escrow minimizes risk for vendors or buyers being scammers but introduces higher upfront business costs as a result, faking documentation or proof is what every system of arbitration handles today including paypal, and it always sides on the on the sellers side unless the buyer can provide adequate proof without sellers response to that proof that the seller is in error. In the end its always still going to be buyer beware even though they have some of the piece of mind of an arbitration process that may work in their favour should the otherside be scammy. I think the tradeoff of an arbitration process outweighs higher upfront costs to try to achieve network affect.

That wouldn't be hard to weigh up something the same weight as the item would it? Or the buyer placing something of that weight in the package and win the decision saying the seller sent it. Also easy for the seller to take a photo of the so called item before taking it out the box ready to ship. Arbs in the above would be less useful than useless, always on the side of the seller scammer because the provided proof that was really hard to fake. Sounds like a play ground for scammers.

The shipping carrier will have weight of the parcel. Perhaps the seller takes extra steps before shipping so that he can prove to the arbiter shoudl there be an issue that he sent the device.

Let's say all arbiters are honest (We know thats not so).
How could the arbiter make the right decision in my example above with sending an old shoe instead of a phone?

by making an impartial decision with encrypted messages of data given to him or her. He has no incentive to cheat because he will have return business if he makes the right decision. You cant make it trustless via a lock mechanism because the barrier of entry and CODB are too high.

Aah, it's more clear now :-) as you say the buyer has to send the same amount to a multisig. Thanks!

And how is the arbiter able to make the right decision if the two parties involved do not agree?

The point is to avoid arbiters. This is a fully decentralized trustless system. Arbiters are a risk.

There is a little about this technique on our site http://bitbay.market/about/smart-contracts/
David has also explained this a couple of times in this thread I believe.
Basically it goes like this:
I post my iphone for sale. I define the price, and have to send a deposit that equals the sell price to a multisig wallet.
You want to buy it, and accept the contract. In doing so you send me the Bay I was asking for, + send the same amount to the multisig.
If all goes well we both ask for the locked funds in the multisig to get released. They will get released simultaniously to both of us, and only if both of us asked for it.
If I send you an old shoe instead of my phone, you will be pissed, and you will not release the deposit. I will have gained nothing by sending you that shoe instead of my phone, and thus there is no point in doing so.
If I actually sent you my phone, but you claim I did not, I will not release the deposit. Again, that makes it pointless for you to try scamming me.

Yes after talking to David I implemented a pegging feature to avoid volatility issue. Yes they have incentive to get the deal done but if the consumer really does feel he gets cheated and vendor has shipped and lost goods then they both ar eout of luck, none of which want to give in and lose their share, they will remain locked because they do not want the other to get the coins... you need an arbiter here to resolve the situation, whoever loses here has incentive to STOP using the system and look elsewhere with their business.

I was goin to implement the double deposit escrow but after thinking about it a bit and speaking with other notable people I came to the consensus that the best idea is to have an arbiter (buyer pays a fee which he gets a 0.05% cut out of the deal IFF he signs off on a refund or release, otherwise doesn't get a cut), and have done the GUI for it which took the longer than the actual feature.

I don't understand it i think. Is there some technical post about this technique? Maybe "arbiters" like in Openbazaar could be a solution?


Buyer could be a scammer too. But again, I have to read more about this system.

Yes, once both parties have entered a contract the funds are locked. But I don't see where you get indefinitely from. They will both have an incentive to get the deal done so the funds can be released.

We will not reduce supply to appease investors. As a matter of fact you need a little surplus of money in a well functioning economy. But we will use pegging to avoid the volatility you see in other coins. And just to be clear, with pegging we don't mean a fixed price forever. (Pegs have a long history of failing in fiat) Think of it as a stabilizer.

Once you have a contract the funds are locked indefinitely until one side decides to give in, how can you UNLOCK a locked contract that is based on double deposit?
 
You need to reduce barrier of entry as much as possible to gain network affect.  Demand for bay will come as a result of users wanting to use the system because it is easy and cheap and provides the service they want, not by reducing supply to appease investors.

There is subtly in what the users "want" as that is all up to marketing.

The vendors funds are not locked indefinitely. They can cancel at any time until someone enters their contract. And whoever enters a contract will have an incentive to fulfill the deal so they can get their deposit released.
The problem for vendors would be a different one. If a power seller from ebay started using our market he would have to have an enormous amount of Bay to list everything he is offering. We are discussing solutions for this. Basically we need an option to reduce the deposit for big sellers/buyers. We could make that dependent on the rep system. We can also make it possible to allow frozen Bay to be used for deposits.

The positive side for investors is of course that a lot of Bay will be tied up in transactions if the market is popular. Just imagine, how much Bay will be in double deposit if average transactions are $1000 a day. How long is average listing time (where seller has put down deposit) before someone enters the contract? 5 days? 10 days?
How long does the transaction take when buyer has entered the contract? 3 days domestic and 10 days international? Pick your numbers and do the math. We can easily have a situation where an average of $1000 daily transactions can create an average demand for $30 000 - $50 000 worth of Bay.

I think it will hinder adoption as vendors will not list things that they have to ensure collateral for AND not knowing if their funds will be locked indefinitely... it doesn't make much business sense although technically it is a superior implementation (however it is less work because no GUI is needed). A vendor would much rather have the piece of mind knowing an arbiter is involved that is impartial and not have to lock up funds, that really should be a discretion on the buyer side that he may have his funds locked until he receives his item(s).

It does open up a can of worms of knowing who to pick as an arbiter, because it has to be a trusted person who has incentive to do good, so you must design around that and create the incentive structure for the system to work. It cannot fully trustlessly on mass scale in this way unless you get an insurance agent involved somehow to provide the collateral for you for a charge.

That all being said, something using CLTV however may work using time locks and extending time locks somehow and I think David knows this.. however it is alot of GUI work to get this right, and more moving pieces, more complications, more unit tests.. but ultimately might be the optimal solution. But at this point 2 of 3 is probably the best way to go.

Why do you think double deposit wont work?

(I posted the reason for deleting your post in Syscoin thread before I read your question here)