prevent or react

Beginning of this year, there was a very tragic event prominently present in all newspapers across Switzerland. The whole thing was so tragic, that I won’t add a link here. But there is one aspect, that kept me thinking for the last two weeks. Today’s blog post by Bruce Schneier triggered me to write about it. There was a family father who fed his family from selling smart phones on online auction sites without delivering anything. Apparently he did that for years. They couldn’t get hold of him because he moved house every couple of months. In contras to places like Nigeria, I didn’t think this was even possible here in Switzerland.

First of all, I don’t think that’s the profession he imagined for himself. There must have gone something terribly wrong long before. I think one has to be very desperate to become a professional cheater. Most measures our society has in place against such behaviour are reactive. Bad behaviour is punished, and the prospect of the punishment should keep the hesitant from misbehaving.

In certain areas of commerce it’s easier. In a brick and mortar store, you get the goods and pay directly. If you take the goods and run out of the store, chances are somebody will follow or somebody will stop you. This kind of theft is also easier for the police to pursue. But there are other areas where you need to bring a certain trust. That’s for example if you order something online and pay upfront. If it is a big name store, you may know it’s reputation. If they wouldn’t deliver, you ‘d tell your friends. This in turn could influence the reputation of the shop. With sites like ebay that have more participants than could any individual keep track of, it doesn’t work as easy. That’s why they have reputation systems built in. There are certain ways how you could trick them. I have no ideas how well that would work out, but the only way to prevent that would be to require for example a social security number instead of just an email address to register. Other countries issued electronic passports for a while which could be used for identification in such cases. Whether this is desired is another question.

Ebay and ricardo do offer some sort of escrow service. But nobody seems to make use of it. Certainly not the victims of the above mentioned iphone scammer. Some may already know where I’m leading to. That’s an area where BitCoin can shine. With it’s built in, easy (soon) to use  multi signature escrow system, certain types of fraud almost disappear over night. If the system doesn’t allow cheating, there is no need for punishment after somebody was ripped off, or threats against such behaviour. So which is better, prevention or reaction paired with menace?

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