CoinTelegraph reported this week that Bitrated, the Bitcoin trust platform, has launched “a new reputation layer on top of multisignature technology, essentially creating the possibility for Bitcoin chargebacks.” This would be an interesting development in the progression of Bitcoin as an accepted form of currency. 
Although Bitcoin is the best-known form of cryptocurrency, it is actually treated as property for US federal tax purposes and subject to capital gains tax. Some states dispute this, while European Union countries are split on its classification. However, companies including Microsoft, Monoprix, Dell and UK Theatre Tickets Direct are all reportedly accepting payments via Bitcoin.
A USP that helped the rise of Bitcoin is its independence from traditional banking institution. However, this has also been one of the barriers to its wider acceptance as a currency – the fact it is unregulated by a recognised body leaves it open to manipulation, with legitimate customers having almost no system of redress.
The announcement from Bitrated looks to be a step in the right direction for the digital currency, although the need for the buyer and seller to agree a mutually-trusted third-party arbiter could be open to misuse. For payments with ‘traditional’ currency, whether in store or card-not-present, the consumer is often protected by the bank, whom they can turn to in the event of a dispute with the merchant. If the chargeback is successful then the bank refunds the money to the consumer and recoups the amount from the merchant, along with a processing fee and other potential charges.
This is only a small part of the much wider debate that still seeks to explore the future of digital currencies. Whether the trusted ‘traditional’ model can be mirrored successfully in the Bitcoin space remains to be seen, particularly as it’s difficult to settle chargebacks with an unstable currency. We applaud any efforts to help protect all members of the transaction process, but any effective chargeback remediation system needs to be trusted, clear and highly-scalable to help increase processing retention and revenues, while helping combat cyber-shoplifting in order to promote sustainable and secure growth.
