“The overall security level for all Brawker users has just gone up,” reads Brawker’s latest blog post.
Brawker is a service that matches up a bitcoiner who wants to buy something online with their bitcoins and a credit card holder who wants bitcoins. The credit card holder buys the product and gets bitcoins in return. The bitcoin user gets a discount of up to 20 on the product they want.
Following the decentralized design that characterizes Bitcoin, Brawker has just switched to multi-signature transactions. If you’ve used Brawker before, this new implementation isn’t going to make your experience using the platform any different, but this under the hood change is a huge one.
Here is a short video that demonstrates how the new implementation works:
If you are already familiar with multisig transactions, awesome. If not, Bitcoin Magazine Co-founder and Ethereum developer, Vitalik Buterin, further explains the concept of multi-signature transactions in one of his articles:
“In a Bitcoin account, there is a set of 34-character Bitcoin addresses, like 1JwSSubhmg6iPtRjtyqhUYYH7bZg3Lfy1T, that you can use to receive bitcoins, and each address has an associated 64-character private key, in this case c4bbcb1fbec99d65bf59d85c8cb62ee2db963f0fe106f483d9afa73bd4e39a8a, that can be used to spend bitcoins that are sent to the address. Private keys need to be kept safe and only accessed when you want to sign a transaction, and Bitcoin addresses can be freely handed out to the world. And that’s how Bitcoin wallets are secured. If you can keep the single private key safe, everything’s fine; if you lose it the funds are gone, and if someone else gains access to it your funds are gone too – essentially, the exact same security model that we have with physical cash, except a thousand times more slippery… In a traditional Bitcoin account, as described above, you have Bitcoin addresses, where each address has one associated private key that grants the keyholder full control over the funds… With multisignature addresses, you can have a Bitcoin address with three associated private keys, such that you need any two of them to spend the funds…”
On this new system change, Brawker CEO, Cyril Houri comments: “I think that our implementation of multi-signature transaction is an important development. It makes Brawker a fully decentralized marketplace where people can buy from any ecommerce merchant with Bitcoin and other people can purchase some bitcoins as easily as they would buy something on Amazon or any other online retailer. With this implementation Brawker becomes a simple matchmaker between the two parties involved in the transaction. This offers the guarantee that Brawker will never lose its customer funds as it is never holding the customer funds.”
In effect, the funds that belong to someone who wants to use Brawker to buy something are much safer. If Brawker were was to get hacked, users’ funds would not be affected since they are on the blockchain, and not in the hands of a third party. So now, the transaction is controlled by at least two of three participants: the Buyer, the Spender, and Brawker– the escrow agent. Brawker intervenes only to act as the arbitrator in a dispute. The transaction can be monitored on the blockchain.
With businesses in the Bitcoin space following the trend of decentralization, the users will begin to experience levels of security that are not feasible with some decentralized systems.
Will traditional businesses catch on to this?