Nice little insight. I do have one thing to mention though:

Thank you for your reply Cube.

You are in fact wrong. With Bitcoin, you can make payments that are Multi-Signature (“Multisig”) which means that the entire problem you describe is elimintated.

To see this in action, look at

a company that allows Bitcoin users to spend on Purse uses Multisig Bitcoin transactions to protect the buyer from fraud. Here is how it works…

You go to your Amazon account and select what you want to buy with Bitcoin, putting every item into a WishList. When you’re finished shopping, you copy and paste the URL to your wish list into, which imports it, adds up the total of your order and presents you with a QR code to pay Bitcoin to to cover the cost.

Purse users with credit cards (or Gift Cards) wanting Bitcoin select your WishList and buy the items for you. As they arrive, you check them off in your account. When all the items arrive, you release the Bitcoin to the buyer and Purse takes a service fee.

When you use Purse as a Bitcoin user, you are paying to a Bitcoin Multisig address. Purse can’t release the Bitcoin without your permission; you both have to sign the transaction to send it to the buyer.

Multisig completely solves the problem you describe, without the need for a trusted third party. You do not need to know anything about the other party’s record, and unravelling the payment is simple. Of course, if the incentives are correct, it isn’t worth anyone trying to cheat Purse and its Bitcoin users at all, in fact, its impossible. The only people who can be cheated in this system is Amazon, who are exposed to credit card fraud, and that is a normal threat they already face.

I hope this explanation helps!

Like what you read? Give Beautyon a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.