No. (Channels patio11) As a society we have decided to delegate a bunch of responsibilities to the companies that move money. The most notable one is fraud protection. The companies that make this much money do so by pretending that a transfer of money is a clean, simple, and absolute thing. In reality it is messy, reversible, and fraud-prone. Being able to transfer $1B dollars as easily as you are able to transfer $1 would be a failure of the system, not a feature.
Dispute resolution is not where the 2-3% go (as evidenced by disputes also existing on US debit cards, where it's 0.05%, and EU credit and debit cards, where it's 0.3% and 0.2% respectively).
Some of it is spent by the issuer on fraud expenses that they are assigned liability for, but given the same reasoning as above, if that was more than 0.05%, there wouldn't be any profitable debit issuers left in the US (and similarly for the EU, although the regulator is changing the fraud calculus there significantly by enforcing strong cardholder authentication, so it's not an apples to apples comparison).
In other words, if there was political will to get rid of credit card points in the US, we could have all of this for much cheaper. (We might need to look into scheme fees too while we're at it, e.g. by finding a market solution that creates actual competition there.)
That would be whoever made the cards fault. We don't give credit for cleaning up your own mess, that's the minimum standard for engaging in a beneficial relationship.
It's not a value proposition from gmail that you can't access my inbox just from knowing my address.
I can't believe you can be a $400B company and the value comes from stopping fraud that you enabled by your own product design.
They took care of it for themselves, when someone commits fraud it isn't your problem because they used your name to do it.
Imagine if you were defrauded for a few hundred bucks by someone claiming to be a big celebrity. You probably wouldn't even be able to get into contact with the actual person, let alone have them jump through a bunch of hoops, spend time on hold with your staff or go to the post office to send you copies of documents. They wouldn't bother to respond to you, they have no obligation to, whatever happened had nothing to do with them.
No kidding. Zelle looks so dangerous from consumer point of view. It is so easy to get scammed and almost impossible to be made whole. I am fine with Zelle if banking regulators require Reg E. The best part of Reg E: Since banks are almost completely responsible for fraud in their customers named, they take it very seriously!
To be fair, the trade-off is that there aren't any fees and it's nearly instantaneous. For the type of transaction similar to handing someone you know a wad of cash, it seems pretty good.
I don't think visa is doing it by hand and pencil and paper though, and the value in those companies is that they're taking bioff the top of every transaction that runs on their rails. so it's already automated too a huge degree,
it's just that automation is what gives those companies that market cap
by being the digital rails. without visa/mc, all you have in your wallet is a piece of useless plastic. there's huge value in the convenience of not having to use cash, and then the rewards programs on top of that.
The Fed’s 2011 rules capped fees at 21 cents plus five basis points of each transaction, and also allowed an additional one cent fee per transaction for fraud prevention, where applicable.[0]
And by using Bitcoin to automate all these transactions you get a bunch of very cool features such as constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc., etc., etc. unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!). The cool thing about all of this is that it's a feature of Bitcoin to be able to irreversibly lose your life savings, without any ability to recoup your losses.
All of this to say that Bitcoin is obviously the way forward for global transactions, despite the fact it processes transactions as slow as molasses and the only way to make it faster (Lightning Network) is to sacrifice the checks and balances that maxis praise as the hallmark of Bitcoin lol
It's a different kind of cash (like banknotes). It has different security tradeoffs because the owner is the custodian and you aren't paying a chain of intermediaries.
It's not a feature of cash that it can be stolen, every object can be stolen. The distinctive attribute is transactions are public and immutable.
A car can be driven by its owner anywhere they like. If someone described a car to you as a suicide box you can crash and die in - you might say yes, the fact that cars can be driven freely by their owners means you might drive into someone else. But that's a consequence of the feature, not the feature itself.
The difference of course between all of the rubbish that crypto/Bitcoin is (since they are, at the end of the day, in the same boat), is that by entrusting central parties to handle financial transactions in our traditional financial systems we have methods by which we can reverse transactions, whereas in any blockchain system there is no real authority, by design, so any stolen assets are lost forever. There aren't security "tradeoffs", because there is not a way in which any blockchain based currency is any more secure than current finances, outside of the fact that no bank or government entity could take your digital beanie babies because they don't have the token, which isn't an issue in traditional banks either unless you're a criminal for the most part. And in order to get this "advantage" of blockchain, you have to completely remove its ability to be used as a currency since for any amount of crypto or Bitcoin to be useful in the real world it almost always has to be converted back into fiat, once again centralizing it. The whole concept is extremely flawed, hasn't really gained any ground outside of FOMO'ers, and will likely die out again soon, thankfully.
- you can use an escrow account to reverse the transaction if needed
- having full ownership of your money and it being censorship resistant (depending on the crypto) is certainly a plus if you don't fully trust your government.
- the conversion to fiat is depending on adoption: the more adoption there is, the less necessary that would be.
- you can decide to wire your money 24/7, internationally, instantly and with no fees (with the right crypto)
Overall you get more control of your money. If you think of money as just another kind of information, it's normal to expect it to evolve in the digital age we are living in.
This reply was excellent. This part really made me laugh:
unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!)
To continue the "lulz", South American drug traffickers will soon be cutting those people open to extract their hard wallet!
Enough with the jokes! Real question: Sometimes you read about FBI chasing down ransomware groups and recovering Bitcoins. How do they do it? If they can identify the wallet, how do they lay claim? Do they find where the wallet is hosted and force exchange to transfer wallet to FBI?
Please don't read this post as an attempt to defend Bitcoin, nor say that FBI is a good way for me to reverse a fraudulent Bitcoin transaction!
> And by using Bitcoin to automate all these transactions you get a bunch of very cool features such as constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc., etc.
All lies.
> unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!)
Lies. Just write them down and store them securely. You can memorize them if you like. It's also wise to store multiple physical copies in various locations to avoid this exact scenario.
> The cool thing about all of this is that it's a feature of Bitcoin to be able to irreversibly lose your life savings, without any ability to recoup your losses.
Yes, you can't be utterly careless (and I'm not sure what the argument is for wanting to be).
> the only way to make it faster (Lightning Network) is to sacrifice the checks and balances that maxis praise as the hallmark of Bitcoin
Yes, which makes sense for small transactions between trusted parties. Large transactions can and should be done on-chain (also with trusted parties).
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I'll continue to listen to the signal [1], not the noise. What makes me happiest is that the people who deserve to win the most will win over the people who deserve it the least. It will be the greatest wealth transfer humanity has ever seen and it won't require any violence or coercion.
Doesn't bother to point out what part of it was a lie (because it isn't a lie)
> Lies. Just write them down and store them securely.
Welcome to the future of finance, make sure you don't lose your seed phrases written down on paper (it's the future, trust me bro)
> Yes, you can't be utterly careless
Contradicts saying that I was lying that you can lose your life savings due to phishing, scamming, or hacking, and that if you lose your seed phrases and can't access the wallet then your digital doubloons are gone forever
> Doesn't bother to point out what part of it was a lie (because it isn't a lie)
This "constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc." is a lie. There is no inherent property of Bitcoin that makes you vulnerable to these. Any vulnerability in those regards is an individual issue, just like with the current system. You could mitigate those away with paid services under a Bitcoin standard (which is great because you could actually pick the vendor you thought could do the job best).
> Welcome to the future of finance, make sure you don't lose your seed phrases written down on paper (it's the future, trust me bro)
> Contradicts saying that I was lying that you can lose your life savings due to phishing, scamming, or hacking, and that if you lose your seed phrases and can't access the wallet then your digital doubloons are gone forever
Fair enough. This is where an exchange comes in. You still have the option to trust a third-party to hold your Bitcoin if you wish. But of course, that comes with its own risks, just like trusting a bank (which can only ever guarantee up to $250K worth of your money under FDIC).
I'm pretty favourable towards crypto, but it is absolutely an inherent property of blockchains.
The whole point is that it's immutable and transactions are not reversible. That means users are susceptible to losing their money with no recourse.
Seed phrases are also a pain in the ass. No one wants to deal with that, and average consumers would absolutely lose/forget/misplace them and lose access to their wallets.
The risk of ruin in crypto is ridiculously high compared to traditional finance.
Almost like handwaving is the only way to disregard any of the real concerns people bring up about Bitcoin or crypto because there's not really any good way to dispel them with much logical proof.
It doesn't need to. Transact with vendors you actually trust who have a track record you can verify (which necessitates people being trustworthy to earn business—unlike our current economic order).
How would that not lead to the inevitable concentration of economic activity in a few trusted platforms?
Today, I can shop at pretty much any merchant on the web, under the reasonable expectation that my bank will file a dispute for me if the merchant makes a run for it and I never receive any goods or services. Even in case of merchant bankruptcy, I'm not exposed to any risk.
In a world of non-reversible payments, I'd probably stick to Amazon exclusively. That seems pretty bad for small/new/independent merchants.
> How would that not lead to the inevitable concentration of economic activity in a few trusted platforms?
Because it would force people to be honest in order to eat. Economic activity as a whole would become a lot more transparent because people will avoid hiring you or buying from you if you have a bad reputation. The inverse is also true, rewarding the business owner who invests in quality and customer service.
> if the merchant makes a run for it
Again, this is a discernment issue not a systems issue. In that particular case, you can set up an escrow transaction that only releases funds if the transaction goes through. EBay has already proven, too, that most people are honest by default so this is a non-issue.
> In a world of non-reversible payments, I'd probably stick to Amazon exclusively. That seems pretty bad for small/new/independent merchants.
> 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).
> Are you suggesting that either all sellers know a) the credit worthiness of their customers or b) don’t extend any credit?
That's up to the business owner, but considering the utter destruction its done to the world I would say most businesses should not extend any credit.
The nice thing about Bitcoin is it's a transaction layer and people can build services on top of it. Someone could start a guarantor business that other businesses pay to verify creditworthiness. They do that already now, the difference being that it's a completely dark system controlled by people with no incentive to fairly or accurately represent your worthiness.
> The transaction layer is arguably the least interesting service the credit card and other incumbent transaction/payment networks provide.
It isn't until you can't transact over it because your government blocked it or received an international sanction that prevents you, an innocent citizen from transacting. Or, if you reside in a country where that network does not exist.
> Deciding whether to move money, and possibly whether to move it back, is where the value is created.
Incorrect. The ability, not the decision, is where the value resides. I can decide all I want that I'd like the bank to send $20K to someone overseas for me, but that likely means jumping through several hoops to do it. With Bitcoin, I can just do it.
- Visa has a market cap of $463B
- Mastercard $362B
- PayPal $90B
- Block $48B
Could it theoretically all be automated?