<p>Stealing directly from <a href="http://bitcoin.org/bitcoin.pdf">Satoshi's original paper</a>:</p>

<blockquote>
  <p>Commerce on the Internet has come to rely almost exclusively on
  financial institutions serving as trusted third parties to process
  electronic payments. While the system works well enough for most
  transactions, it still suffers from the inherent weaknesses of the
  trust based model.  Completely non-reversible transactions are not
  really possible, since financial institutions cannot avoid mediating
  disputes. The cost of mediation increases transaction costs, limiting
  the minimum practical transaction size and cutting off the possibility
  for small casual transactions, and there is a broader cost in the loss
  of ability to make non-reversible payments for nonreversible services.
  With the possibility of reversal, the need for trust spreads.
  Merchants must be wary of their customers, hassling them for more
  information than they would otherwise need.  A certain percentage of
  fraud is accepted as unavoidable.</p>
</blockquote>

<p>In other words, it's cheaper and safer to not to have to trust the other party, or to have to pay someone else to trust the other party.</p>

CC BY-SA 3.0
2013-04-29T21:03:32.703Z
2013-04-29T21:23:11.157Z
2013-04-29T21:23:11.157Z
jgm
<p>All of the promotional materials (videos, papers, articles, etc.) on Bitcoin bill it as a decentralized solution for e-commerce/online financial exchanges that bypasses traditional banks, federal reserve, etc.</p>

<p>My question: why is this a good thing? Is it better, or just different? What shortcomings in traditional e-com are now solved by Bitcoin? Thanks in advance!</p>

<ecommerce><decentralization>
Why is decentralized e-commerce good or better?
TicketMonster
# Why is decentralized e-commerce good or better?

(Asked by: username_0 on 2013-04-29)

All of the promotional materials (videos, papers, articles, etc.) on Bitcoin bill it as a decentralized solution for e-commerce/online financial exchanges that bypasses traditional banks, federal reserve, etc.

My question: why is this a good thing? Is it better, or just different? What shortcomings in traditional e-com are now solved by Bitcoin? Thanks in advance!

**Tags:** ecommerce, decentralization


---

## 1 answers

### Answer by username_1 on 2013-04-29. Score: 5 | Accepted answer

Stealing directly from [Satoshi's original paper](http://bitcoin.org/bitcoin.pdf):

> Commerce on the Internet has come to rely almost exclusively on
> financial institutions serving as trusted third parties to process
> electronic payments. While the system works well enough for most
> transactions, it still suffers from the inherent weaknesses of the
> trust based model. Completely non-reversible transactions are not
> really possible, since financial institutions cannot avoid mediating
> disputes. The cost of mediation increases transaction costs, limiting
> the minimum practical transaction size and cutting off the possibility
> for small casual transactions, and there is a broader cost in the loss
> of ability to make non-reversible payments for nonreversible services.
> With the possibility of reversal, the need for trust spreads.
> Merchants must be wary of their customers, hassling them for more
> information than they would otherwise need. A certain percentage of
> fraud is accepted as unavoidable.

In other words, it's cheaper and safer to not to have to trust the other party, or to have to pay someone else to trust the other party.


---

