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figure out how to deal with fraud The token issuer would just has to stoically do two things and two things only: 1: Sell tokens for $1.10 each 2: Buy them ba

figure out how to deal with fraud The token issuer would just has to stoically do two things and two things only: 1: Sell tokens for $1.10 each 2: Buy them back for $1.00 each Done. No fraud issues.

toast0 8y ago
What does your token issuer do when the purchase of a token is revoked? That could be from a charge back, bounced check, or because the cash was determined to be counterfeit when deposited. A big problem is the costs involved may be 10% at scale, but are certainly more than ten cents per transaction, so you need to get a deposit, but I'm not buying $50 worth of flooz to pay someone $1, because I don't know when flooz is going to stop working. Anyway, it's not that hard for someone to run a PayPal shop, as long as the product fits PayPal's tos and doesn't look suspicious.
- TicklishTiger 8y ago
  What does your token issuer do when the purchase of a token is revoked? Nothing. The token issuer is not involved in that. He just sells and buys tokens. When Joe buys an apple from you with a dollar note and you bring that note to your bank - what does the bank do when Joe returns the apple to you? Nothing.
  - toast0 8y ago
    If you give me a token when I give you a fake note, and then you give me a real note when I give you a token, how do you stay in business? And how do you not have to deal with fraud issues?
    - TicklishTiger 8y ago
      That is not related to tokens. You could ask those question to any merchant. No matter if they sell chewing gum or tokens. A merchant better watches out to not take fake notes. The token issuer sells a box of 100 tokens to a store. And charges the store $110. Just like a chewing gum merchant sells a box of 100 chewing gums to a store. Last time I checked, there was chewing gum in stores.
      - toast0 8y ago
        I'm no longer sure what your token product is. Do I go down to my local store, and buy tokens from them, that they've purchased from the issuer? How is that very much different than a prepaid visa/mastercard/amex gift card that I can get today; maybe that it's easier to spend the money with people who can't get a credit card merchant account? How much margin is the merchant going to add on top of what you're charging them? How do you deal with anti-money laundering laws, etc?
      - skybrian 8y ago
        Hmm, you do realize that shoplifting is a thing? That cash registers were invented in part to protect against employee theft? The question isn't whether there is crime or not, but how much and whether it's worth the cost and risk. Merchants do have to spend time and effort fighting it. It's a significant cost of business.
      - manigandham 8y ago
        ...what? So now all you're proposing is just a different currency with these tokens. This solves absolutely nothing. Nobody needs to use tokens when they already have real currency to use along with various transfer services to move money physically and digitally.
skybrian 8y ago
If you don't pay attention to who you're buying or selling from, you're basically charging 10% for money laundering services. Plenty of people would pay that. So, lots of fraud, probably, but if it doesn't affect your profits, you don't care, right? But the government cares and they will come shut you down.
- stordoff 8y ago
  And is in fact about what some people do pay, proving there is a market for such services: > The economics of drug dealing make it cost-effective to pay 5% to 10% to betting shops to launder the illicit profits. https://www.theguardian.com/uk-news/2013/nov/08/gambling-machines-drug-money-laundering-bookies https://www.theguardian.com/uk-news/2013/nov/08/gambling-mac...

figure out how to deal with fraud The token issuer would just has to stoically do two things and two things only: 1: Sell tokens for $1.10 each 2: Buy them back for $1.00 each Done. No fraud issues.

toast0 8y ago

What does your token issuer do when the purchase of a token is revoked? That could be from a charge back, bounced check, or because the cash was determined to be counterfeit when deposited. A big problem is the costs involved may be 10% at scale, but are certainly more than ten cents per transaction, so you need to get a deposit, but I'm not buying $50 worth of flooz to pay someone $1, because I don't know when flooz is going to stop working. Anyway, it's not that hard for someone to run a PayPal shop, as long as the product fits PayPal's tos and doesn't look suspicious.

TicklishTiger 8y ago
What does your token issuer do when the purchase of a token is revoked? Nothing. The token issuer is not involved in that. He just sells and buys tokens. When Joe buys an apple from you with a dollar note and you bring that note to your bank - what does the bank do when Joe returns the apple to you? Nothing.
- toast0 8y ago
  If you give me a token when I give you a fake note, and then you give me a real note when I give you a token, how do you stay in business? And how do you not have to deal with fraud issues?
  - TicklishTiger 8y ago
    That is not related to tokens. You could ask those question to any merchant. No matter if they sell chewing gum or tokens. A merchant better watches out to not take fake notes. The token issuer sells a box of 100 tokens to a store. And charges the store $110. Just like a chewing gum merchant sells a box of 100 chewing gums to a store. Last time I checked, there was chewing gum in stores.
    - toast0 8y ago
      I'm no longer sure what your token product is. Do I go down to my local store, and buy tokens from them, that they've purchased from the issuer? How is that very much different than a prepaid visa/mastercard/amex gift card that I can get today; maybe that it's easier to spend the money with people who can't get a credit card merchant account? How much margin is the merchant going to add on top of what you're charging them? How do you deal with anti-money laundering laws, etc?
    - skybrian 8y ago
      Hmm, you do realize that shoplifting is a thing? That cash registers were invented in part to protect against employee theft? The question isn't whether there is crime or not, but how much and whether it's worth the cost and risk. Merchants do have to spend time and effort fighting it. It's a significant cost of business.
    - manigandham 8y ago
      ...what? So now all you're proposing is just a different currency with these tokens. This solves absolutely nothing. Nobody needs to use tokens when they already have real currency to use along with various transfer services to move money physically and digitally.

skybrian 8y ago

If you don't pay attention to who you're buying or selling from, you're basically charging 10% for money laundering services. Plenty of people would pay that. So, lots of fraud, probably, but if it doesn't affect your profits, you don't care, right? But the government cares and they will come shut you down.

stordoff 8y ago
And is in fact about what some people do pay, proving there is a market for such services: > The economics of drug dealing make it cost-effective to pay 5% to 10% to betting shops to launder the illicit profits. https://www.theguardian.com/uk-news/2013/nov/08/gambling-machines-drug-money-laundering-bookies https://www.theguardian.com/uk-news/2013/nov/08/gambling-mac...