Even a 2-of-2 transaction would work, without any arbitrator, if both buyer and seller place additional funds at risk and specify a verifiably neutral means to sacrifice funds in a non-destructive way. This could be as funding the jackpot of an automatic lottery, giving to the EFF, or as a prize added to the next block mined--any transaction that is verifiably not controllable by either party.<p>The seller commits the sale price in bitcoins. The buyer commits double the sale price. If both agree the sale was good, the seller gets what the buyer committed, and the buyer gets what the seller committed. If both do not agree, the entire amount goes to the verifiably neutral address, or becomes a windfall for the next block miner.<p>If the buyer cheats by accepting the goods and rejecting the transaction, he pays double the sale price for it. The seller is twice as screwed as usual. If the seller cheats by failing to deliver, he loses the cost of the item, and the buyer is twice as screwed as usual.<p>Normal transaction:
There is a Nash equilibrium for both parties reneging. You cannot buy or sell with confidence unless you have a retaliation strategy, like chargebacks and blacklists.<p>Bonded transaction:
The only Nash equilibrium is at both parties being honest.