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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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