> But how do I detect honesty in first interaction with an unknown party?
It should be obvious. The guy who shows up to your intro meeting well-dressed, prepared, etc with references is going to be preferable to the guy who shows up smelling like vodka in tattered clothes.
> As a merchant, what if I have no reputation? How do I ever get my first customer?
The same way you do under the current system. Go work for someone else to build up credentials/experience, or, offer to do stuff for free in exchange for referrals and testimonials.
> on a centralized platform that can arbitrate trust!
> Do you regularly hold in-person intro meetings for ordering sub-$100 items online?
Of course not but you can use the same heuristic by looking at the presentation of what's being sold. Just like in-person, it will be obvious. The only exception would be if you're doing something dubious which already has risks.
> And then passport it to my own store how, exactly? "Trust me, I'm honestseller897 on Amazon/eBay"?
I don't understand what you're asking. By doing that work and building those relationships, you've established a reference to someone who can vouch for you and your work.
> The fact that it does, when required, is the reason for rarely needing to.
Great. Use a business (or start one) to mitigate that risk for you and pay with Bitcoin using escrow.
> Of course not but you can use the same heuristic by looking at the presentation of what's being sold.
Which works until the scammers begin making nice websites. They already do, not sure if you've noticed - phishing sites typically look almost identical to the target site. I've even seen known scam shopping sites look completely legitimate. Stripe lookalike checkout page, with full emulation of every behavior of the page, address look up, the whole nine yards. The reason why it's not worse than it currently is, is because CC theft is not as easy as it could be, if it were all crypto (irreversible transactions + immediate theft that can be shuffled around within seconds and hidden).
This is a legitimate concern, but there's a business to be built here.
I could see some sort of popup or embed that the actual company can put on their site that can only be validated via DNS. Then, users can look for that and have it validate the company by having the service email the user from the authentic domain, via that popup's backend. If the popup can't validate that the email sent via the vendor is from the validated domain, it rejects it and sends a warning back to the buyer that the site isn't authentic. The business being to mitigate spoof attempts on the behalf of sellers and building trust with customers.
Make it simple enough for any seller to use and you incentivize sales by being a "BlorgTron Validated Seller."
All of these problems have solutions, they just (likely) don't exist yet. We're effectively entering a "financial industrial revolution," and just like back then, new solutions will be required to move forward. That doesn't make Bitcoin bad, it just needs the missing services layered on top (identical to the existing banking system).
But how do I detect honesty in first interaction with an unknown party?
> [...] people will avoid hiring you or buying from you if you have a bad reputation [...]
As a merchant, what if I have no reputation? How do I ever get my first customer?
> EBay has already proven, too, that most people are honest by default [...]
...on a centralized platform that can arbitrate trust!