When it comes to regulatory supervision, Bitcoin has been criticized due to its lack of aid for fraudulent transactions. With the cryptocurrency’s anonymity feature, consumers find it hard to trust other participants in a Bitcoin transaction.This has led to an idea for Nadav Ivgi, a programmer and Bitcoin supporter, to build a Bitcoin startup that intends to render consumer protection and fraud prevention mechanisms for Bitcoin and other cryptocurrencies.
The startup is called Bitrated and was the very first multi-sig application publicly released. The trust platform was launched in 2013 and is operating from Israel. The startup is operating on three different complimentary levels which are: reputation management system, multi-sig smart contract payment system and a marketplace that allows for payment reversibility and smart arbitration contracts. It allows users to build reputation and showcase trustworthiness by linking to their online identity, creating connections within the web of trust network and earning positive ratings. A user’s trustworthiness is measured by their Bitrating score. Bitrated offers a multi-signature smart contracts payment system that allows buyers and sellers to choose a trusted arbiter that can intervene in cases of adjudicate, dispute and reverse payments. It also allows users to earn through fees by rendering dispute resolution services without holding the funds of the user in escrow thus, it lowers cost, encourage competition and makes dispute resolution processes more comprehensive, innovative and fair.
How Bitrated works?
How Bitrated works is very simple. If user A trusts user B, and user B trusts user C, then user A should also be able to trust user C. Bitrated analyses how well two users are connected in the graph and through this, the trust platform is able to pull out metrics in determining how trustworthy they are. As mentioned above, each users are provided with a Bitrating score or a trust score which is achieved through the information collected from the users’ social media profile including Reddit karma, Linkedin connections and Twitter followers. Ivgi said that some of these information is about distinguishing fake accounts, some is for identity identification and some is related to trustworthiness.
Bitrated users can use its payment system in making reversible payments using two to three multi-signature smart contracts in the arbitrated marketplace. This can be done by buyers and sellers appointing a trust agent to act as an arbiter for their e-commerce transactions. Arbiters will only intervene whenever a dispute is raised by either one of the buyer or seller. In this event, the trust agent will review the case and determine which of the parties have failed to adhere to the agreement. The arbiter will either release the funds to the seller or refund the payment to the buyer.
Bitrated is not the only startup of its kind. There are also Bonafide.io and OneName.com which were noted by Nadav Ivgi as their big competitors. He said that what sets Bitrated apart from its competitors is their comprehensive solution for the trust issues that the crypto-economy is facing, which they then provide as a basic layer for other mechanisms in the ecosystem to build on top of.
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