As a decentralised currency, bitcoin has been both criticised and celebrated for its lack of regulatory supervision.
Unlike credit cards – or other traditional payment methods – bitcoin’s transactions are final by design, with almost no recourse for consumers in cases of fraud.
This, in addition to the semi-anonymity afforded by the digital currency, has led some to question how participants in a bitcoin transaction can be trusted.
One bitcoin startup, Bitrated, thinks it may have the answer.
The Israeli-based company, founded in 2013 by software developer and bitcoin enthusiast Nadav Ivgi, is a trust platform that aims to provide fraud prevention and consumer protection mechanisms for bitcoin.
The team has spent the last year upgrading the service, which Ivgi describes as a “complete rewrite from the ground up”.
Bitrated now operates on three different, albeit complimentary levels: a reputation management system, a multi-signature payment system and an arbitrated marketplace which allows for payment reversibility.
How it works
The Bitrated reputation system is based on three primary components: reviews, a ‘web of trust’– itself modelled on a social graph of trust relationships between users – and the consumers’ online presence.
According to the website, the basic concept is simple.
If I trust Bob, and in turn Bob trusts Alice, then I should