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The best electronic money transfer systems (EMTSs) have no
reversibility for spends. This means that once money are
transferred from an account to another, it's not possible to
reverse the transaction. These systems are great (particularly
for merchants) because they put the burden of "policing"
on individuals instead of merchants (as is the case with credit /
debit cards).
However, this means that people must decide which merchants
are honest, so that he can buy something from them. But, being
online, is very difficult to know who is honest and there is
little possible action one can take when he is the victim of an
online fraud.
Thus, an EMTS must implement a rating system for its users.
This must be optional, as probably only merchants would need it
in order to look honest to customers.
The most important thing to do is for the EMTS to verify
merchants. Basically, the EMTS would mark a certain account as
verified, if the owner of the account provides to the EMTS
certain identification documents. This verification could be
entirely online, or physical. Then, the verification status is
shown to all users.
Reputation sheet
Each account must have a reputation sheet. Any user should be
able to see the reputation sheet of any account.
The reputation sheet of an account has to contain:
Verified account status: none, online, physical.
The time, in years, elapsed from the moment when the
account was created. This is called "account age".
The time, in years, elapsed from the moment when the
account was verified (at least) online.
Adult status (minor or adult) of the account holder.
Reputation.
Accumulating reputation
An account can automatically accumulate reputation points. The
system is designed to allow the accumulation of points from
accounts which are not verified. Unfortunately, this method is
detrimental for small merchants because they need to be paid from
many accounts in order to accumulate the maximum reputation.
For each time when the rated account receives a spend of at
least 1 GAU from an account, the reputation of the rated account
grows.
In order to receive reputation, the rated account must not
have made, in the past year, a spend to or received a spend from
the account which is paying now. Otherwise, a scammer could
simply move some money between two accounts he owns in order to
accumulate reputation.
New_R = min(KMR, R + KMR / KRAS)
Legend:
"KMR": maximum reputation; constant.
Recommended value: 100.
"KRAS": number of accounts which generate
maximum reputation; constant. Recommended value: 100'000.
"R": reputation of the rated account. This is
between 0 and KMR.
The reputation points are not added immediately when the spend
is made. Each addition is put in a queue of reputation commands
and is executed 30 days later, unless it is deleted by the
spender.
A user can delete, from the queue, each addition of reputation
points for the spends he makes to other accounts, in maximum 30
days after each spend is made.
Weakness
There is one thing a scammer could do to artificially increase
the reputation of one of his accounts. He could, one day, open
KRAS temporary accounts Ti, wait one year so can start giving
reputation from all of them. He needs 2 more accounts, X (his
main account) and Y.
Then, he would fund account Y with 1 GAU, then transfer the
money from account Y to account T1, and then from account T1 to
account X, and then from account X to account Y. This means that
for each time X gains reputation, there are 3 spends involved
(and this means 3 spend fees). Repeating the operations, he would
achieve maximum reputation for account X (received from accounts
Ti).
To counteract this problem it is necessary to increase the
KRAS so that the scammer would need more and more accounts (at
least one year old) to do this. Another way would be to increase
the minimum spending value (from 1 GAU) for which reputation is
given, so that the fee paid would also increase.
If the fee for a spend is KSF GAU, the scammer would need to
waste about 3 * KRAS * KSF GAU to reach maximum reputation for
account X.
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