Video - Bitcoin Q and A Irreversibility and Consumer Protection

Irreversible transactions and consumer protection. Why would people want irreversible transactions? Will that slow down adoption? The difference between a system of hard promises which can be softened and a system of soft promises which can't be hardened.

We're used to operating in a system of soft promises, where your bank can reverse your transactions whether you ask it to or not. These blockchain system involve hard promises, but Bitcoin and Ethereum do not guarantee that a payment will happen irreversibly -- it guarantees that the contract within the transaction will be executed irreversibly.

If that contract says "Without second thought, send this money to here and never look back," that is the contract which is going to be executed irreversibly. But that's not the only contract you can put in there. Options: 30-day refund payments, third-party escrows, reintroducing counter-party risk.

The difference is that the owner of the money is the only one who can reintroduce those constraints. It is an irreversible guarantee that the wishes you expressed as a consumer within your transaction script will get executed, simulating all of the softness that you want.

Right now it's too difficult to do those scripts, but that's an engineering problem just a few rounds of incremental innovation away. We can offer more robust, more predictable guarantees for consumer protection than any system of soft promises. There will be bugs, but you iterate through the bugs.


Written by Andreas M. Antonopoulos on June 8, 2017.