About time BTC trading became safer: Check out Bitrated!

First off, click here for an article about Bitrated.

Bitrated, originally launched in 2013, was the first multisignature application ever released. The website basically offers a Reputation management and consumer protection for the Bitcoin ecosystem, with Middle Men much like Sythe, but without actually risking your coins.

This is done by using multi-sig trades and using a trust agent.

Check out their site here: www.bitrated.com

I am a trust agent on that website with 55 feedback (sitting among the top 13%). If you would like to use me as a trust agent for your trade, just look for Dib!

If you have any questions about Bitrated or multi-sig, feel free to ask me.

 

Multi-sig means that multiple people need to approve a transaction before the money can be spent.

A multisig (as in multiple-signature) address can only move funds out if N of M signers sign on the transaction, that's the gist of it.

Some examples:

Mom, Dad and Kid have a 2 of 3 multisig address. Mom and Dad fund the address with $50 worth of BTC so Kid can spend in the mall. Kid can only spend money if Mom or Dad signs on the transaction too.

John and Paul have a 2 of 2 multisig address to hold a large portion of their business funding money. The money can only leave the address if both agree. (a PITA if there's a disagreement)

You have a network of 10 Bitcoin ATMs. Instead of assigning each ATM a funding address (to replenish the BTC), you can setup a 1 of 10 multisig address, you just fund the multisig address and you're all done funding all of your ATMs in one step. Each ATM can dispense funds, as you only need 1 signature of the possible 10.


In less layman terms:
Multi-signature scripts set a condition where N public keys are recorded in the script and at least M of those must provide signatures to release the encumbrance. This is also known as an M-of-N scheme, where N is the total number of keys and M is the threshold of signatures required for validation. For example, a 2-of-3 multi-signature is one where three public keys are listed as potential signers and at least two of those must be used to create signatures for a valid transaction to spend the funds. At this time, standard multi-signature scripts are limited to at most 15 listed public keys, meaning you can do anything from a 1-of-1 to a 15-of-15 multi-signature or any combination within that range.

Multi-sig is also very useful as a "zero-trust escrow" for example: let's say you are the seller of an item and you go to bitescrow.org you then setup a 2 of 2 transaction where you insert your multi-sig key and then you give the buyer the transaction invite code which allows the buyer to add his key and an address to send the payment to. the payment is then held in this escrow account until the buyer receives the item. Assuming the buyer is happy with the transaction then both the buyer and seller will both sign the transaction with their keys which releases the coins from the escrow 2 of 2 multi-sig address to the sellers Bitcoin address. Technically the buyer could screw over the seller by not signing the transaction after receiving them item but this wouldn't be beneficial to the buyer as he/she would not be able to take back the funds in the escrow address as it would require BOTH buyer and sellers multi-dig keys.


The reason this could be useful for Sythe trades through bitrated:

Superman wishes to sell Wdib 500M OS RSGP for 1500USD's worth of bitcoin. Wdib uses R2pleasent as a trust agent. R2pleasent has NO REAL ACCESS to the money, only to the signature, thus allowing him to "approve" of the transaction once the goods are transferred.

If you require more info, there's

 

Any taxes while using this?

 

No sir.

 

So basically bitrated is like a paypal for bitcoin?

 

No.

How did you even come up with that conclusion?

 

I agree with Matt, it's like PayPal.

 

Multisig allows a painless escrowing process.

Once the initial funds are deposited into escrow, it requires 2 out of 3 confirmations to release it.

Once the seller has sent the item out, he places the first confirmation.
Once the buyer has received the item successfully, he places the second confirmation, and the funds get released.
(The final confirmation can be given by the escrow, if so required.)

As multisig is a part of Bitcoin, the confirmation process is inherently secure.

 

The whole point of bitcoin was to cut out the middleman. I find this counterproductive.

 

SMH... this is so dumb, why not just use PayPal then lol... As Xolr said this is counterproductive

 

I understand if you think the website that the OP posted is poorly executed, but I hope you guys aren't bashing multisig technology. Yes, Bitcoin looks to cut out centralized points of failure such as banks and governments, but that has nothing to do with multisig technology. Multisig has a ton of relevant applications to all types of commerce.

Many would argue that multisig furthers the decentralized movement by reducing single points of failure inherent in the Bitcoin network. For example, if I store my Bitcoins on an exchange that has properly set up multisig, and that exchange gets hacked, my Bitcoins still can't be removed without the hacker stealing my private keys as well.

Read more on multisig - https://bitcoinmagazine.com/11108/multisig-future-bitcoin/

 

Exactly. I find this pretty bad idea. Why need to change something when it's already good?

 

Personally I wouldn't care for this, but the multi-sig does seem kind of cool. Requiring multiple signatures for the trade to be initialized as I understand?

 

I can't really understand this..Trying to figure out through comments but still no luck lol. Any tdlr?

 

This.