How does this actually work in practice? I've never seen an actual non-convoluted / non-far-fetched case where this would apply.
My main area of skepticism regarding this proposed use case is that a blockchain is an immutable public ledger, and thus with enough sleuthing, it is probably quite traceable. Indeed many criminals have later been apprehended through monitoring bitcoin transactions.
The world has had thousands of years to come up with solutions to trust problems during transactions. They are solutions that work. They work for criminals too, but its a lot harder to use them, especially over the internet, because everyone providing the services goes to jail if they are transacting with criminals.
Unless the whole transaction is anonymous, you can do the same with bitcoin.
> or using escrow agents
Which costs you extra.
Not making a value judgement, just pointing things out.
Yes of course - but the question was what value does bitcoin add over normal money, not /name things you cannot do with bitcoin/.
You didn't need to say illicit funds. It's useful to move money without having to use a bank or government money.
Paying off ransomware software is.
And we can see this in the fact that buying goods and services from traditional (not darknet) vendors is still very hard with bitcoin. Paying randsomware in bitcoin is standard.
If you are a bank or government you have to look out for yourself, and so a fair amount of blockchain hype specifically addresses the low-trust transactions they encounter. There is some quiet adoption happening globally, and mostly invisibly to consumers.
The side effect, of course, is that it's easy for anyone to do bank-like things with the tech, including ransomware.
This doesn't prevent scams in the other direction, but it's something. This is a common problem many independent sellers face when doing legal and legit business.
Which is probably the majority of the actual scam cases. Sellers scamming buyers.
So I don't think this is a good case at all.
Regarding businesses specially, someone operating one or more scam online retailers is actively trying to suppress word of mouth. They also don't care about repeat business because their profit margin is so high. Their process may even specifically include periodically cutting ties with their previous name, websites, vendor accounts etc when victim ill becomes unmanageable.
As a business that wants to last a long time and attract customers, reputation is everything. People buy from large, established companies for this reason. Crypto payments help all sellers by eliminating an enormous problem of scam buyers using stolen credit cards.
Even if it wasn't, though, how can you say this isn't useful? Even if 99% of scams were from sellers, the fact that this trivially and provably solves scamming from buyers is amazing. Saying this isn't a good case because cryptocurrency doesn't miraculously universally eliminate the possibility of any fraud from any party in any scenario is really setting a very high bar.
And with things like Ethereum smart contracts, you theoretically can prevent fraud from all parties in some cases, and defer all risk to the implementation of the contract. Or do you consider this a bad case as well, because a contract could possibly be flawed and "the majority of fraud isn't actually due to human deceit"?
Essentially, crypto's major benefit is skirting regulation because its new and that can't last forever.
Payment brokers are always going to be a point of failure. But also, it's about pragmatism: can you name an existing payment broker that fits the criteria? If not, what option are they left with other than to use cryptography as their broker?
But, yes, it's often about avoiding certain kinds of regulation. Regulation isn't inherently good or bad. Some regulation is good in some contexts and some is bad in some contexts. Cryptocurrency lets you enforce your own absolute regulation for cases where legal regulation isn't able to easily help you (like in this scenario).
Bitcoin isn't convoluted or far fetched even if you really want to disagree.
It's nuclear chemistry proof (unlike gold), and outside the reach of government.