Blockchain-based Smart Contracts Are The New Form of Buyer Protection – Bitcoin News


Blockchain-based Smart Contracts Are The New Form of Buyer Protection

In this day and age where online commerce is playing an increasingly important role, one of the key topics of discussion is buyer protection. As consumers are entrusting their information to third parties, who not only have access to their location but also sensitive information such as ID scans and whatnot, which protects the customer if something goes wrong? Smart contracts, based on blockchain technology, may play an important role in the not so distant future.

Buyer Protection In Its Current Form – Semi-Adequate At Best

Buyer protection, or customer protection as it is officially called, come in many shapes, ways and
forms. In its theoretical form, buyer protection is a combination of various laws and organizations ensuring the rights of every consumer as well as fair trade practices. On top of that, consumer protection is meant to spur on competition and accurate information in any marketplace, whether this is online or offline.

Not only will buyer protection laws prevent business with less than kosher agendas to gain an advantage over competitors, but they will also protect the buyer in case of financial harm. After all, the consumer is the most vulnerable entity in our society, which is focusing entirely on consumerism and little else these days.

In fact, buyer protection is a form of government regulation, a term hardly anyone is fond of these days. However, someone has to provide the rights of every individual consumer, which means there has to be an overarching entity to enforce those rules. In our world, that overarching entity is the government, located in the country of the consumer.

Over the past few years, many business have actively started promoting consumer protection to show they have nothing to hide and are compliant with government regulation. In the online space, platforms such as eBay, PayPal and AlIExpress come to mind, as all of these services offer buyer protection.

Some of the topics covered by buyer protection and its associated laws range from privacy rights to fraud and misrepresentation. Especially when dealing with online services or marketplaces, those are some of the biggest threats to consumers on a daily basis. Add product liability and unfair business practices on top of that mix, and you can see why it is important to have a form of buyer protection in place at any given time.

Consumer protection laws vary from country to country, and a detailed oversight can be found on Wikipedia. But even though these laws may vary based on a consumer’s location, there is one thing in common: buyer protection around the world is not being enforced in a proper manner at this time.

Entrusting Third Parties to Settle Arguments

The major problem with enforcing buyer protection in this day and age is the fact it is handled by eBay, Paypal, and AlIExpress – the consumer has to rely on human input overseeing the dispute. And that, hopefully, lead to taking the appropriate action in favor of the consumer.
third parties. In the case of the examples as mentioned earlier –

And this brings us to the key problem: even though all signs point towards the seller being in the wrong, the consumer will not always be right either. Depending on the person reviewing your case, he or she may decide in favor of the seller despite an insurmountable amount of evidence stating otherwise.

Having a human element in delicate matters such as settling disputes and providing buyer protection is asking for trouble sooner or later. As much as we like to think otherwise, every human is corruptible or affected by outside influences. If the person reviewing your case is having a bad day, the buyer may very well received the short end of the stick, as that person “can not be bothered” with these cases at that particular moment.

Or what if the person reviewing your buyer protection claim is only starting out at this job and is unsure which guidelines to follow? Decisions based on a gut feeling are not the rights ones in these cases, as there has to be evidence provided by all parties involved. And that evidence can only point one way: in favor of the seller, or the buyer. If the person entitled to make the decision can not do the job adequately, a wrong decision can have major consequences.

To make matters even worse, cases of buyer protection can take quite a while to solve, once again because of the human element involved. A person has to review the cases, both parties have to submit documents after the facts, and the entire process can take anywhere from days to weeks and even months. There is a much faster way to settle these matters, and that is by letting computers take the role of arbiters, rather than humans.

Smart Contracts – The New Buyer Protection?

Smart contracts are a new breed of technology, which can make use of blockchain technology to
create digital and public records of transactions between multiple parties. The idea of smart contracts has been kicked around for a few year snow, even before Bitcoin came into the picture. It has been long overdue for a system that cuts out the human element from any type of verification procedure.

The idea behind smart contracts is simple: rather than having a human element facilitate, verify or enforce the negotiation or performance of any given contract, this task will be taken over by a computer. In an ideal scenario, smart contracts would conclude themselves automatically, without any delays for settling payments or delivery of goods. .

In most cases, smart contracts can provide the ultimate buyer protection, and do so in a transparent and speedy manner. Because computers can only operate on facts and logic, rather than outside influence or corruption such as the human element, there are nearly no delays in making a decision as to who is in the right. Additionally, smart contracts would drastically reduce the costs associated with contracting in general, which is an added bonus.

One of the main reasons why smart contracts have become a hot topic yet again is because of Bitcoin and the blockchain technology. Whereas it was previously impractical to organize smart contracts – on centralized servers to boot – the blockchain allows decentralization in full effect. Without a central point of failure to attack, blockchain-based smart contracts will always be executed, no matter what.

That being said, we are still a few months, if not years, away from a working smart contracts integration with an easy-to-use interface for the average non-techie consumer. However, once such a solution is available – which will most likely be based on blockchain technology – buyer protection will change for the betterment of all consumers around the world.

What are your thoughts on using smart contracts as a way to enforce buyer protection? Let us know in the comments below!

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Bitcoin, Bitcoin News, Blockchain, blockchain technology, BTC, Digital Currency, headline, news, Smart Contracts

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Jean-Pierre Buntinx

Jean-Pierre Buntinx is a freelance Bitcoin writer and Bitcoin journalist for various digital currency news outlets around the world, Jean-Pierre also has a keen interest in Fintech and technology, and he is always open to new challenges.

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