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> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up wh

> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up what I feel on the crypto space.

wongarsu 7y ago
In general the answer for consumer protection is to use any escrow service. Multi-signature schemes can even prevent you from a bad escrow, as long as no two parties are colluding. In general the need for consumer protection mechanisms is of course already a failing of the justice system. Virtually every case where consumer protection is useful is covered by existing laws and shouldn't require anything from the payment facilitator.
- leeoniya 7y ago
  > Virtually every case where consumer protection is useful is covered by existing laws and shouldn't require anything... ...except a lawyer, more money and a non-trivial part of your life.
  - derefr 7y ago
    Yes, that’s the failing. Ideally, justice should be cheaper in both time and monetary costs. I don’t know of any state that has ever tried to optimize for a low-overhead justice system “in the small” (e.g. many, more efficient, more convenient small-claims courts; or the introduction of another triage layer of “medium-claims” courts, where most all civil contractual disputes would land) which is an interesting fact all by itself. Speedy+cheap justice goes somewhat hand-in-hand with things like red-tape reduction, in that both are attempts to “oil the wheels” of the state apparatus—yet you’d never hear the same people (e.g. libertarians) espouse both.
    - waqf 7y ago
      Aren't small-claims courts precisely an attempt to optimize for a low-overhead justice system in the small? Doubtless you feel they don't succeed or don't go far enough, but it seems odd to claim that nobody's tried.
    - repolfx 7y ago
      That's what cryptocurrencies allow, since Bitcoin. People can pick a dispute mediator who gets involved and can reverse the transaction only if there's a dispute. It's all done with OP_CHECKMULTISIG. The mediator is not an escrow service and can't steal the money. So you end up with a competitive market of tiny "courts".
    - dragonwriter 7y ago
      > I don’t know of any state that has ever tried to optimize for a low-overhead justice system “in the small” Both small-claims courts themselves and rules giving effect to binding arbitration agreements are attempts to do that, as are many specialized, domain-specific administrative forums.
- marcoseliziario 7y ago
  But if you are going to introduce a third-party anyway, why use crypto?
  - rusk 7y ago
    because even with a third party, it's still much cheaper, secure, and private.
    - Nursie 7y ago
      I mean, except that it's actually not cheaper, you've just moved the trust and security problems around (to your own opsec and your trust in the counterparty) and the privacy most cryptocurrencies provide is pseudonymity rather than anonoymity... But sure, other than all those things.
      - rusk 7y ago
        but I think, with traditional money exchange the reliance is on regulatory and legal enforcement, rather than making the technology itself watertight, which increases the risk profile, and thus cost. You can do this in traditional approaches because you just pass on these costs and there's no need to improve beyond what people are willing to pay. Crypto represents an asymptote for what a rigorously applied technological approach (as opposed to beaureaucratic/legal approach) can do, using commodity equipment, which is much more available at the endpoints of these transactions now ... (because most people have high-powered, always connected computers available to them).
        Nursie 7y ago
        > but I think, with traditional money exchange the reliance is on regulatory and legal enforcement, rather than making the technology itself watertight, A lot of money and research has gone into this, and the tech is being tightened up all the time. > which increases the risk profile, and thus cost. Except the cost isn't actually higher. > You can do this in traditional approaches because you just pass on these costs and there's no need to improve beyond what people are willing to pay. In the US perhaps, not in places where these costs are regulated. > Crypto represents... A much more expensive and more risky way to do basically anything, because you have neither solved security nor trust problems, you've just moved them.
- dragonwriter 7y ago
  > In general the answer for consumer protection is to use any escrow service. No, it's not, because the problem being addressed with consumer protection is power imbalance in the marketplace; mutually voluntary mechanisms cannot be the answer to it. Also, escrow notionally solves exactly the same problem as cryptocurrency: providing the ability to rely on a transaction with an untrusted counterparty. If you need escrow for anything with cryptocurrency, the cryptocurrency is not doing the one thing that is it's defining purpose. So, why cryptocurrency at all?
- scott_s 7y ago
  I'm confused by your last paragraph. How does the existence of laws that protect consumers actually protect consumers if the payment systems we use don't allow reversals?
  - wongarsu 7y ago
    If an ebay seller delivers me a faulty product I can sue them for not delivering what I payed for and when I win the court orders them to pay the money back (plus my expenses). If they don't pay I can go after their assets. It's basically the same how a business would recover money from a bad supplier. With small claims court it's even somewhat efficient for small sums, but of course still orders of magnitude more work than a credit card dispute.
    - scott_s 7y ago
      That's an enormous burden. If we require lawsuits to enforce even minor cases of consumer protection, I argue that there is effectively no actual consumer protection.
      - wongarsu 7y ago
        The law not working for "minor cases" (which includes cases over hundreds of dollars) is exactly the failing of the justice system I mentioned. This isn't universal, in many places you can get theft of a Mars bar or possession of tiny amounts of drugs prosecuted very effectively, all cases much more minor than the typical credit card dispute.
        scott_s 7y ago
        So, rather than having a financial system with basic consumer protections (which would allow transaction reversals and contestation), you would prefer we have a criminal justice system which aggressively enforces and prosecutes minor offenses? I think there is a weak connection between the two, particularly since most situations where we do things like dispute a credit card charge are civil matters. And, as stated above, requiring civil suits for something like disputing a credit card charge is an enormous burden, and puts the burden on the consumer. (Which will also disproportionally affect the poor.)
ckastner 7y ago
Ironically enough, the inability to regulate decentralized currencies is often touted as a strength, especially from the point of view of a consumer.
- rusk 7y ago
  until you get caught in a pump-and-dump scam that is ...
__MatrixMan__ 7y ago
What are you talking about? Fiat currency isn't reprogrammable--how would you implement a consumer protection mechanism on it? Pick your favorite consumer protection mechanism, and I'll pick my favorite cryptocurrency and let's compare: A) the up front implemention cost of the protection mechanism in fiat currency B) the up front implemention cost of the protection mechanism in the crypto C) the year-over-year cost in fiat D) the year over year cost in crypto I bet A and C are going to be in the hundreds of millions, if not billions, while B is going to be in the tens of millions and D is going to be in the thousands of dollars. Here's an example of the kind of thing I'm talking about: https://www.ccn.com/cardano-to-help-ethiopia-grow-coffee-using-blockchain-tech/ https://www.ccn.com/cardano-to-help-ethiopia-grow-coffee-usi... Consider the recent news regarding contaminated black market vape cartridges--that's going to be insanely expensive to fix, because there's nothing about high schoolers passing around dollars after school that gives those students any insight into the supply chain of the cartridges they're buying. But if some vape company did with their supply chain what Cardano is trying to do with coffee, they could provide consumers (and authorities) a way to trace their products back to their origins, a capability that already would have saved several lives. It's not surprising that Libra is a dumpster fire, but let's not throw the baby out with the bathwater.
- aiCeivi9 7y ago
  > they could provide consumers (and authorities) a way to trace their products back to their origins, a capability that already would have saved several lives. Why would blockchain be required for that? In case of drugs and food there recalls are being done using batch number of day of production.
  - __MatrixMan__ 7y ago
    Suppose somebody named Mary wants to sell you a vape cartridge which has a serial number, and they also give your a website which accepts the serial number and tells you: > Joe runs the factory and gave this cartridge to Bob. Bob have it to Mary. The assumption is that if you buy it then the site will then say: > And Mary gave it to aiCeivi9 What reason do you have to believe that the website contents are accurate or that people accepting vape cartridges from Joe Bob and Mary are still alive? In the blockchain case, you can see that Joe Bob and Mary have sold thousands of these and that very few of the transactions are in dispute over authenticity. Also, rather than trusting some faceless 4.6 star rating you can see which of the people that supplied the rating are ones that you know, and which of those are ones that you trust. You can also see if you trust people who trust Joe Bob and Mary. This let's you make a more informed decision about the quality of the thing you're buying.
dadarepublic 7y ago
Anyone saying blanket "we don't need consumer protection mechanisms" because it's a "failing" of something or the other must be taking the piss. As a parent of children, consumer protections are overall a "good thing" to help prevent bad actors from doing harm. It goes for any space that can do harm to you or your family in any way. It's why you have exchanges like Gemini in place that seek to be the "most regulated" crypto exchange - to instill trust in the service and market... and your investment. That being said there is still a ways to go... it will be interesting to see if the market can solve some of these issues through natural growth and competition.
- Jeff_Brown 7y ago
  I think it's weird how family gets invoked to change the moral gravity of an issue. It suggests orphaned children, for instance, should care less about humanity.
  - gerikson 7y ago
    How does being an orphan make one care less about humanity? Personally, I want orphans (as defined as minors with no living parents) to be well-cared for regardless, either by relatives or by an outside agency ("orphanage" or foster home).
    - Jeff_Brown 7y ago
      Absolutely, that's my point. We should care about people, period. Whether one has a family should be irrelevant to the question of how to engineer a society.
      - gerikson 7y ago
        Thanks for clarifying. I agree 100%.
  - PeterisP 7y ago
    It's not about the moral gravity but about an illustrative example of a particular category of people who have access to devices where buying stuff is possible - children. Our marketplace has at least some customers that clearly are unable to protect themselves and need protection, e.g. these children. This places some contraints on the properties that this marketplace must have - e.g. reversals must be possible without undue burden. And this places some limitations on what technologies can/can't provide these properties and thus would/wouldn't be suitable.
clarkmoody 7y ago
The legacy monetary system may have nice consumer protections on the micro scale, but it fails on the macro scale: 1. Inflation eats 2-4% of everyone's purchasing power each year, disproportionately affecting the poor. This inflation is desired by the central planners. 2. The American system of banking regulations introduces systemic risk into the financial sector. Sure, if you can prove that your transaction was fraudulent, you can get a couple thousand bucks back into your savings account. But you'll have to gamble your money in the market to beat inflation just to break even. And then, every so often, the entire system will collapse and destroy trillions of dollars of wealth. As an aside, you also get the bonus of having political control of banking relationships, so you can conveniently freeze and take the money of those who find the political winds aren't blowing their way. Edit: PLEASE don't take this is an argument for Libra (sorry I wasn't clear), merely an argument for sound monetary policy and decentralization.
- arcticbull 7y ago
  I’m consistently amazed by how many people here dont understand inflation at all and are confident they need to throw out the financial system before they figure it out. Inflation is an incentive to invest. If you invest in literally anything other than cash under your mattress inflation stops mattering completely to you, and all you have to think about is constant dollar returns. That’s why we have it. So long as your wages track inflation (broadly they do) you benefit from implicit depreciation in your debt obligations. It costs you nothing if you don’t hold cash like you’re supposed to, and it costs you effectively nothing if you hold money in a savings account as many offer 1.8% interest these days, matching inflation. What nobody arguing for a deflationary currency can tell me is why they think money should be worth more later solely by virtue of them having gotten it first. A risk-free guaranteed return at the expense of the next generation! It makes no sense. This is basic ECON 101. High school level home ec probably. Not some big conspiracy perpetrated by the central banking cabal.
  - leg100 7y ago
    I'm not sure that is "why we have it". It sure is why the central banks are pumping money into the system (they quite rightly want people and companies to invest), but it's far from clear why we have it a priori.
buboard 7y ago
cryptocurrencies are replacing cash, they arent supposed to have protections. other services will be built on top of them
mtrycz2 7y ago
One can build any amount of consumer protection required into most cryptocurrencies. In their bare form they don't have that, exactly like cash doesn't have that. One can use the desired amount of third parties for fund protection. The new thing about cryptocurrencies, is that some of these third-party services can be made non-custodial, so the third-party never has access to your funds. They arbiter, but not transmit.
miguelmota 7y ago
That's by design. Cryptocurrencies are meant to be used like cash. Cash doesn't have consumer protection mechanisms.

> Libra has no capacity for consumer protection mechanisms. You can replace Libra quote above with your favorite cryptocurrency and that pretty much sums up what I feel on the crypto space.

wongarsu 7y ago

In general the answer for consumer protection is to use any escrow service. Multi-signature schemes can even prevent you from a bad escrow, as long as no two parties are colluding. In general the need for consumer protection mechanisms is of course already a failing of the justice system. Virtually every case where consumer protection is useful is covered by existing laws and shouldn't require anything from the payment facilitator.

leeoniya 7y ago
> Virtually every case where consumer protection is useful is covered by existing laws and shouldn't require anything... ...except a lawyer, more money and a non-trivial part of your life.
- derefr 7y ago
  Yes, that’s the failing. Ideally, justice should be cheaper in both time and monetary costs. I don’t know of any state that has ever tried to optimize for a low-overhead justice system “in the small” (e.g. many, more efficient, more convenient small-claims courts; or the introduction of another triage layer of “medium-claims” courts, where most all civil contractual disputes would land) which is an interesting fact all by itself. Speedy+cheap justice goes somewhat hand-in-hand with things like red-tape reduction, in that both are attempts to “oil the wheels” of the state apparatus—yet you’d never hear the same people (e.g. libertarians) espouse both.
  - waqf 7y ago
    Aren't small-claims courts precisely an attempt to optimize for a low-overhead justice system in the small? Doubtless you feel they don't succeed or don't go far enough, but it seems odd to claim that nobody's tried.
  - repolfx 7y ago
    That's what cryptocurrencies allow, since Bitcoin. People can pick a dispute mediator who gets involved and can reverse the transaction only if there's a dispute. It's all done with OP_CHECKMULTISIG. The mediator is not an escrow service and can't steal the money. So you end up with a competitive market of tiny "courts".
  - dragonwriter 7y ago
    > I don’t know of any state that has ever tried to optimize for a low-overhead justice system “in the small” Both small-claims courts themselves and rules giving effect to binding arbitration agreements are attempts to do that, as are many specialized, domain-specific administrative forums.
marcoseliziario 7y ago
But if you are going to introduce a third-party anyway, why use crypto?
- rusk 7y ago
  because even with a third party, it's still much cheaper, secure, and private.
  - Nursie 7y ago
    I mean, except that it's actually not cheaper, you've just moved the trust and security problems around (to your own opsec and your trust in the counterparty) and the privacy most cryptocurrencies provide is pseudonymity rather than anonoymity... But sure, other than all those things.
    - rusk 7y ago
      but I think, with traditional money exchange the reliance is on regulatory and legal enforcement, rather than making the technology itself watertight, which increases the risk profile, and thus cost. You can do this in traditional approaches because you just pass on these costs and there's no need to improve beyond what people are willing to pay. Crypto represents an asymptote for what a rigorously applied technological approach (as opposed to beaureaucratic/legal approach) can do, using commodity equipment, which is much more available at the endpoints of these transactions now ... (because most people have high-powered, always connected computers available to them).
      - Nursie 7y ago
        > but I think, with traditional money exchange the reliance is on regulatory and legal enforcement, rather than making the technology itself watertight, A lot of money and research has gone into this, and the tech is being tightened up all the time. > which increases the risk profile, and thus cost. Except the cost isn't actually higher. > You can do this in traditional approaches because you just pass on these costs and there's no need to improve beyond what people are willing to pay. In the US perhaps, not in places where these costs are regulated. > Crypto represents... A much more expensive and more risky way to do basically anything, because you have neither solved security nor trust problems, you've just moved them.
dragonwriter 7y ago
> In general the answer for consumer protection is to use any escrow service. No, it's not, because the problem being addressed with consumer protection is power imbalance in the marketplace; mutually voluntary mechanisms cannot be the answer to it. Also, escrow notionally solves exactly the same problem as cryptocurrency: providing the ability to rely on a transaction with an untrusted counterparty. If you need escrow for anything with cryptocurrency, the cryptocurrency is not doing the one thing that is it's defining purpose. So, why cryptocurrency at all?
scott_s 7y ago
I'm confused by your last paragraph. How does the existence of laws that protect consumers actually protect consumers if the payment systems we use don't allow reversals?
- wongarsu 7y ago
  If an ebay seller delivers me a faulty product I can sue them for not delivering what I payed for and when I win the court orders them to pay the money back (plus my expenses). If they don't pay I can go after their assets. It's basically the same how a business would recover money from a bad supplier. With small claims court it's even somewhat efficient for small sums, but of course still orders of magnitude more work than a credit card dispute.
  - scott_s 7y ago
    That's an enormous burden. If we require lawsuits to enforce even minor cases of consumer protection, I argue that there is effectively no actual consumer protection.
    - wongarsu 7y ago
      The law not working for "minor cases" (which includes cases over hundreds of dollars) is exactly the failing of the justice system I mentioned. This isn't universal, in many places you can get theft of a Mars bar or possession of tiny amounts of drugs prosecuted very effectively, all cases much more minor than the typical credit card dispute.
      - scott_s 7y ago
        So, rather than having a financial system with basic consumer protections (which would allow transaction reversals and contestation), you would prefer we have a criminal justice system which aggressively enforces and prosecutes minor offenses? I think there is a weak connection between the two, particularly since most situations where we do things like dispute a credit card charge are civil matters. And, as stated above, requiring civil suits for something like disputing a credit card charge is an enormous burden, and puts the burden on the consumer. (Which will also disproportionally affect the poor.)

ckastner 7y ago

Ironically enough, the inability to regulate decentralized currencies is often touted as a strength, especially from the point of view of a consumer.

rusk 7y ago
until you get caught in a pump-and-dump scam that is ...

__MatrixMan__ 7y ago

What are you talking about? Fiat currency isn't reprogrammable--how would you implement a consumer protection mechanism on it? Pick your favorite consumer protection mechanism, and I'll pick my favorite cryptocurrency and let's compare: A) the up front implemention cost of the protection mechanism in fiat currency B) the up front implemention cost of the protection mechanism in the crypto C) the year-over-year cost in fiat D) the year over year cost in crypto I bet A and C are going to be in the hundreds of millions, if not billions, while B is going to be in the tens of millions and D is going to be in the thousands of dollars. Here's an example of the kind of thing I'm talking about: https://www.ccn.com/cardano-to-help-ethiopia-grow-coffee-using-blockchain-tech/ https://www.ccn.com/cardano-to-help-ethiopia-grow-coffee-usi... Consider the recent news regarding contaminated black market vape cartridges--that's going to be insanely expensive to fix, because there's nothing about high schoolers passing around dollars after school that gives those students any insight into the supply chain of the cartridges they're buying. But if some vape company did with their supply chain what Cardano is trying to do with coffee, they could provide consumers (and authorities) a way to trace their products back to their origins, a capability that already would have saved several lives. It's not surprising that Libra is a dumpster fire, but let's not throw the baby out with the bathwater.

aiCeivi9 7y ago
> they could provide consumers (and authorities) a way to trace their products back to their origins, a capability that already would have saved several lives. Why would blockchain be required for that? In case of drugs and food there recalls are being done using batch number of day of production.
- __MatrixMan__ 7y ago
  Suppose somebody named Mary wants to sell you a vape cartridge which has a serial number, and they also give your a website which accepts the serial number and tells you: > Joe runs the factory and gave this cartridge to Bob. Bob have it to Mary. The assumption is that if you buy it then the site will then say: > And Mary gave it to aiCeivi9 What reason do you have to believe that the website contents are accurate or that people accepting vape cartridges from Joe Bob and Mary are still alive? In the blockchain case, you can see that Joe Bob and Mary have sold thousands of these and that very few of the transactions are in dispute over authenticity. Also, rather than trusting some faceless 4.6 star rating you can see which of the people that supplied the rating are ones that you know, and which of those are ones that you trust. You can also see if you trust people who trust Joe Bob and Mary. This let's you make a more informed decision about the quality of the thing you're buying.

dadarepublic 7y ago

Anyone saying blanket "we don't need consumer protection mechanisms" because it's a "failing" of something or the other must be taking the piss. As a parent of children, consumer protections are overall a "good thing" to help prevent bad actors from doing harm. It goes for any space that can do harm to you or your family in any way. It's why you have exchanges like Gemini in place that seek to be the "most regulated" crypto exchange - to instill trust in the service and market... and your investment. That being said there is still a ways to go... it will be interesting to see if the market can solve some of these issues through natural growth and competition.

Jeff_Brown 7y ago
I think it's weird how family gets invoked to change the moral gravity of an issue. It suggests orphaned children, for instance, should care less about humanity.
- gerikson 7y ago
  How does being an orphan make one care less about humanity? Personally, I want orphans (as defined as minors with no living parents) to be well-cared for regardless, either by relatives or by an outside agency ("orphanage" or foster home).
  - Jeff_Brown 7y ago
    Absolutely, that's my point. We should care about people, period. Whether one has a family should be irrelevant to the question of how to engineer a society.
    - gerikson 7y ago
      Thanks for clarifying. I agree 100%.
- PeterisP 7y ago
  It's not about the moral gravity but about an illustrative example of a particular category of people who have access to devices where buying stuff is possible - children. Our marketplace has at least some customers that clearly are unable to protect themselves and need protection, e.g. these children. This places some contraints on the properties that this marketplace must have - e.g. reversals must be possible without undue burden. And this places some limitations on what technologies can/can't provide these properties and thus would/wouldn't be suitable.

clarkmoody 7y ago

The legacy monetary system may have nice consumer protections on the micro scale, but it fails on the macro scale: 1. Inflation eats 2-4% of everyone's purchasing power each year, disproportionately affecting the poor. This inflation is desired by the central planners. 2. The American system of banking regulations introduces systemic risk into the financial sector. Sure, if you can prove that your transaction was fraudulent, you can get a couple thousand bucks back into your savings account. But you'll have to gamble your money in the market to beat inflation just to break even. And then, every so often, the entire system will collapse and destroy trillions of dollars of wealth. As an aside, you also get the bonus of having political control of banking relationships, so you can conveniently freeze and take the money of those who find the political winds aren't blowing their way. Edit: PLEASE don't take this is an argument for Libra (sorry I wasn't clear), merely an argument for sound monetary policy and decentralization.

arcticbull 7y ago
I’m consistently amazed by how many people here dont understand inflation at all and are confident they need to throw out the financial system before they figure it out. Inflation is an incentive to invest. If you invest in literally anything other than cash under your mattress inflation stops mattering completely to you, and all you have to think about is constant dollar returns. That’s why we have it. So long as your wages track inflation (broadly they do) you benefit from implicit depreciation in your debt obligations. It costs you nothing if you don’t hold cash like you’re supposed to, and it costs you effectively nothing if you hold money in a savings account as many offer 1.8% interest these days, matching inflation. What nobody arguing for a deflationary currency can tell me is why they think money should be worth more later solely by virtue of them having gotten it first. A risk-free guaranteed return at the expense of the next generation! It makes no sense. This is basic ECON 101. High school level home ec probably. Not some big conspiracy perpetrated by the central banking cabal.
- leg100 7y ago
  I'm not sure that is "why we have it". It sure is why the central banks are pumping money into the system (they quite rightly want people and companies to invest), but it's far from clear why we have it a priori.

buboard 7y ago

cryptocurrencies are replacing cash, they arent supposed to have protections. other services will be built on top of them

mtrycz2 7y ago

One can build any amount of consumer protection required into most cryptocurrencies. In their bare form they don't have that, exactly like cash doesn't have that. One can use the desired amount of third parties for fund protection. The new thing about cryptocurrencies, is that some of these third-party services can be made non-custodial, so the third-party never has access to your funds. They arbiter, but not transmit.

miguelmota 7y ago

That's by design. Cryptocurrencies are meant to be used like cash. Cash doesn't have consumer protection mechanisms.