#brawker

Brawker Let’s You Buy ‘Almost Anything’ with Bitcoin

Name: Brawker

What it is: Brawker is a site that offers discount shopping at all legitimate web retailers. The firm says users can buy “almost anything” online with bitcoin. It also enables people to semi-anonymously purchase bitcoin by shopping for others with their credit/debit cards or PayPal.

Who’s behind it: Co-founder and CEO Cyril Houri previously founded Infosplit, the first company to…

Good news: the overall security level for all Brawker users has just gone up. Way up.

Multisig is now at the heart of Brawker. All accounts are now multisig. Decentralization of control over your funds is here.

What multisig does for you

We all know the standard drill for transacting bitcoins online. Users create an account at a service provider (for example, an exchange), and can transfer bitcoins into and out of an address linked to their account. To make a payment, bitcoins are transferred from the payer's address to the payee's address. Bitcoins held in one's address may be transferred to a wallet elsewhere. In all these cases, a single party, the service provider, controls all addresses and the funds in them by controlling all the private keys. This centralization may be convenient, but there are clear risks: if the service provider is hacked or the keys are compromised, the funds are gone. Multisignature transactions can significantly lower this risk, and much lower risk is what Brawker now provides.

When you create an account at Brawker you are not required to deposit any bitcoins. Instead, your funds will go through a multisignature address controlled by at least two of three different keys. The Bitcoin spender receives a key, the buyer has the second one and Brawker the third key. Two keys are required to transfer the funds. You control your private key, securing it with your password. What does this mean? That the funds involved in the transaction are not controlled by Brawker, but by the two parties to the transaction. Brawker intervenes only to settle a dispute.

How does multisig make transactions more secure? When funds are transferred to a multisig address, they are not under the control of a single party, but of two out of three possible ones, and those keys are stored in different locations. At least two of the keys will have to be compromised for the funds to be at risk. The likelihood of compromising the safety of those funds, therefore becomes extremely low.

How do our multisig transactions work?

Same as before, Bitcoin spenders post their orders on Brawker and potential buyers bid for them. The difference is this: when buyer and spender agree to transact, Brawker creates a multisig transaction controlled by at least two of three private keys: one owned by the Buyer, one by the Spender, and the third one by Brawker, the escrow agent. The address itself can be monitored on the blockchain.

The first two keys are encrypted on each user's browsers, and are enabled only by each user's passwords. Any two keys working together can transfer the funds.

The spender moves bitcoins to the multisig address, where they remain in escrow until the transaction concludes.

When the buyer purchases the order on behalf of the spender and signals that this portion of the transaction is done, the corresponding key is applied. When the spender is satisfied with the order and completes the transaction, a second key is applied to co-sign the bitcoins off to the buyer. In other words, buyer and spender conclude the transaction, causing the bitcoins to be transferred to the buyer.

If a dispute arises, Brawker can mediate and help solve it in collaboration with one of the two parties.

Let’s recap: Brawker does not store or control the funds, which reside at an address on the blockchain. Any two keys control the funds. This is what decentralization means, and why multisignature transactions are a great improvement in security and ownership control.

How multisig will benefit you

Though the mechanics of executing transactions remain largely unchanged, two significant changes have taken place behind the scenes. Namely, decentralization and increased protection.

Decentralization, because funds are no longer deposited under Brawker's care. Control does not reside in a central location where it could be compromised.

Increased protection results from having multiple keys controlling the funds. If one user's password is lost, the funds are still accessible with cooperation from the other user and Brawker.

Balancing the scales between buyers and spenders!

Starting today, bitcoin buyers in the Brawker community have the ability to counter-offer the discount selected by a bitcoin spender.

What are counter offers?

Putting it in context, Brawker works as follows: bitcoin spenders create orders and typically specify a certain discount. What is the discount? It is a premium that favors the spender, on the current exchange rate between bitcoins and fiat currencies. A bitcoin buyer purchasing an order with a discount greater than zero (positive) will acquire fewer bitcoins than with zero discount. Do keep in mind that discounts are incentives for spenders to trade their bitcoins, while buyers benefit substantially by participating in simple, hassle-free transaction to acquire the bitcoins they want.

How do counter offers work?

Up until now, bitcoin buyers wanting to bid for an order could either accept that order as-is or select another one. With counter offers now available, buyers may choose to counteroffer while bidding for an order, proposing a lower discount.

Bitcoin spenders may either ignore the counteroffer and select a different buyer, or accept a lower discount in exchange for a very practical benefit: a smooth transaction working with a buyer they know has a rock-solid reputation in the Brawker community. To ensure a rapid transaction and avoid long, protracted counter-counter offers going back and forth, only one counteroffer can be made, and it will be either accepted or turned down. The rest of the process remains unchanged.

Why did we add this feature?

We listened to our community and heard requests for ensuring a level playing field for buyers and spenders. Just like in any commercial transaction anywhere, both bitcoin buyers and spenders need the ability to negotiate the terms of their agreement. Spenders create their orders proposing a certain discount. Buyers bid for those orders and may choose to counter, proposing a different discount. When the counteroffer is accepted, an agreement is reached. The transaction moves forward. Everybody is happy.

How it all works

As we know, commercial transactions are about exchanging something we own for something we want, but we also seek peace of mind. Reaching an agreement is not only about dollars and cents -- or the total number of bitcoins changing hands, but is also about being reassured by the reputation of the other party to a transaction. Spenders who lack a strong reputation and insist on high discounts may find their orders ignored. Buyers that achieve a great reputation are often the preferred parties because they ensure a safe and issue-free transaction. And the right price for that peace of mind may be a smaller discount. It works in Brawker the same way it does in real life.