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Yeah, for now it's all we have, so I guess the juice is worth the squeeze. But in a world where our cryptocurrencies are a bit more mature I think we can stop

Yeah, for now it's all we have, so I guess the juice is worth the squeeze. But in a world where our cryptocurrencies are a bit more mature I think we can stop being reactive by reversing transactions and start being preventative by using their structure to build chains and webs of trust that make fraud harder to commit up front, rather than just making it harder to get away with.

semiotagonal 7y ago
The amounts to giving the advantage to fraudsters until something that doesn't exist is invented. Blockchains are irrevocable and unalterable, which removes two useful tools (reversing and changing transactions), and replaces them with nothing workable.
- __MatrixMan__ 7y ago
  The initial question was whether cryptocurrencies have the capacity for consumer protection measures, not whether those measures are ready for prime time. I'm just arguing that when they're ready, they'll be more efficient than what we have, so we should encourage their development in the meantime (though maybe not in Libra's particular case). Also, there are limits on how old a transaction can be when a bank goes and rewrites history. In my experience the limit is about six months. Transactions older than than are considered settled. If this is a feature that people want in a cryptocurrency, it shouldn't be hard to achieve with smart contracts. The problem right now is just that you need a solid settlement layer before you work on features supporting the politics of rejiggering unsettled transactions. Also, provided there is community consensus (this differs based on whether your currency is proof of work or proof is stake) blockchains can be altered after-the-fact to undo a threat. It happens: https://spectrum.ieee.org/tech-talk/telecom/internet/ethereum-blockchain-forks-to-return-stolen-funds https://spectrum.ieee.org/tech-talk/telecom/internet/ethereu... It's just that for most currencies, it's currently a political affair that occurs at a risk to the stability of the overall system. But there are (what appear to be) good technical solutions to that (decred, for example, has a neat approach to post-fork-attempt stability https://medium.com/decred/detailed-analysis-of-decred-fork-resistance-93022e0bcde7 https://medium.com/decred/detailed-analysis-of-decred-fork-r...). As far as deciding whether a transaction ought to be settled in the first place, people are experimenting with some really interesting approaches (https://particl.wiki/learn/market/mad-escrow https://particl.wiki/learn/market/mad-escrow for instance). It's probably not time to forget your bank password and switch to crypto, but if we want to eventually have good solutions to our fraud problems then we should be working to shape crypto into the system we want, not dismissing it as inflexible.
  - semiotagonal 7y ago
    Out of that entire list, the one thing that exists now is the Ethereum blockchain fix, and that basically required global agreement to respond to a single theft. That's not particularly scalable. The rest of the things on the list aren't in significant use at the moment, and might never be. Measures that are not ready for prime-time are as good as nonexistent. We're talking about money here!
    - __MatrixMan__ 7y ago
      > Measures that are not ready for prime-time are as good as nonexistent That's not how technology works. To become fruitful it requires patience and investment. Nobody is saying you have to be an early adopter of these currencies. > We're talking about money here! ...and particularly whether it's current feature set is amenable to fraud prevention. I work at a traditional payments company and the waste is infuriating--there has to be a better way.
      - semiotagonal 7y ago
        > Nobody is saying you have to be an early adopter of these currencies. This here is probably the source of our disagreement. As far as I can tell, tons of people actually are saying "get in now", which means we're no longer in the patience and investment stage, and any deficiencies in the cryptocurrency ecosystem have real consequences.
        __MatrixMan__ 7y ago
        Yeah, I think you're right. There are all of these people who bought in because they just wanted to make money, and they're getting impatient and trying to get the rest of the world in too. I'm interested in the tech and I want to work on it--so I'm just arguing that we shouldn't dismiss it. If you have the interest, now might be a good time to diversify in that direction, but it's nowhere near ready to compete with fiat currency in terms of usage by the masses.
- Udik 7y ago
  > Blockchains are irrevocable and unalterable But so are events in the real world. When you think about "reversing or changing a transaction" what you really mean is creating a new transaction that brings an equivalent amount back to the person that paid it. This is done in the real world by knowing the identity of the receiver person or entity and threatening them with consequences if the money is not returned. It seems to me more a problem of being able to identify the parties in a transaction rather than of mutability of the ledger.
- anteatersa 7y ago
  The faults that people are attributing to blockchain are also applicable to cash, if you go the market and buy some magic beans from dodgy Dave with cash you won't be getting your money back. If you buy something from a reputable supplier with cash/blockchain then you would probably get a refund if you had some form of receipt.
  - notahacker 7y ago
    Sure, cash has some of the same shortcomings of BTC, but that's why cash isn't touted as the future of payments and in modern economies is mostly used for transactions which are either small or illegal, and isn't considered to be a smart way of storing or carrying large amounts of money.
harikb 7y ago
There are generally 3 kinds of fraud 1. A scammer cheating someone out of their life savings through social engineering 2. A central bank "unjustly" inflating currency and giving the newly printed money to specific industry/people etc 3. A person paying for merchandise with a stolen credit card or refusing payment after services/good is delivered. Fiat solves 1 and 3 (recovery) does not think 2 is a problem. Crypto solves 2 and 3. People say it is meant for solving 1.
- jayd16 7y ago
  Your wallet can be stolen and when using crypto so it doesn't solve 3 very well. Credit card fraud is regulated such that the consumer is protected after a manageable amount of theft, $50 in the US last I looked. If you use a bank you receive some protections but at that point the implantation is abstracted and not that relevant. IMO Cryrto is significantly worse in case 3.
  - Acrobatic_Road 7y ago
    If you use a smart contract wallet you can actually protect yourself from losing all your money even if someone gets your private key. You can set a withdrawal limit of say, $50 and you can set a few recovery addresses (of friends, family or other personal wallets). So if I have $10,000 in my ethereum wallet and I post my private key in every forum and every chatroom on the internet then the most I lose is $50. Before 24 hours pass I send my remaining $9,950 to a pre-defined recovery address which is excluded from the withdrawal limit. Consumer protections are actually pretty good. The trouble is getting these tools in the hands of users.
    - Retric 7y ago
      The cost of doing that is making the wallet largely useless for purchasing anything over 50$. The independent ability to send all your money to a recovery address is a new security risk. Further, you need to notice the issue which means you could be our far more than 50$ unless you happen to be checking how much is in the wallet constantly. So, this is strictly worse than using a credit card.

semiotagonal 7y ago

The amounts to giving the advantage to fraudsters until something that doesn't exist is invented. Blockchains are irrevocable and unalterable, which removes two useful tools (reversing and changing transactions), and replaces them with nothing workable.

__MatrixMan__ 7y ago
The initial question was whether cryptocurrencies have the capacity for consumer protection measures, not whether those measures are ready for prime time. I'm just arguing that when they're ready, they'll be more efficient than what we have, so we should encourage their development in the meantime (though maybe not in Libra's particular case). Also, there are limits on how old a transaction can be when a bank goes and rewrites history. In my experience the limit is about six months. Transactions older than than are considered settled. If this is a feature that people want in a cryptocurrency, it shouldn't be hard to achieve with smart contracts. The problem right now is just that you need a solid settlement layer before you work on features supporting the politics of rejiggering unsettled transactions. Also, provided there is community consensus (this differs based on whether your currency is proof of work or proof is stake) blockchains can be altered after-the-fact to undo a threat. It happens: https://spectrum.ieee.org/tech-talk/telecom/internet/ethereum-blockchain-forks-to-return-stolen-funds https://spectrum.ieee.org/tech-talk/telecom/internet/ethereu... It's just that for most currencies, it's currently a political affair that occurs at a risk to the stability of the overall system. But there are (what appear to be) good technical solutions to that (decred, for example, has a neat approach to post-fork-attempt stability https://medium.com/decred/detailed-analysis-of-decred-fork-resistance-93022e0bcde7 https://medium.com/decred/detailed-analysis-of-decred-fork-r...). As far as deciding whether a transaction ought to be settled in the first place, people are experimenting with some really interesting approaches (https://particl.wiki/learn/market/mad-escrow https://particl.wiki/learn/market/mad-escrow for instance). It's probably not time to forget your bank password and switch to crypto, but if we want to eventually have good solutions to our fraud problems then we should be working to shape crypto into the system we want, not dismissing it as inflexible.
- semiotagonal 7y ago
  Out of that entire list, the one thing that exists now is the Ethereum blockchain fix, and that basically required global agreement to respond to a single theft. That's not particularly scalable. The rest of the things on the list aren't in significant use at the moment, and might never be. Measures that are not ready for prime-time are as good as nonexistent. We're talking about money here!
  - __MatrixMan__ 7y ago
    > Measures that are not ready for prime-time are as good as nonexistent That's not how technology works. To become fruitful it requires patience and investment. Nobody is saying you have to be an early adopter of these currencies. > We're talking about money here! ...and particularly whether it's current feature set is amenable to fraud prevention. I work at a traditional payments company and the waste is infuriating--there has to be a better way.
    - semiotagonal 7y ago
      > Nobody is saying you have to be an early adopter of these currencies. This here is probably the source of our disagreement. As far as I can tell, tons of people actually are saying "get in now", which means we're no longer in the patience and investment stage, and any deficiencies in the cryptocurrency ecosystem have real consequences.
      - __MatrixMan__ 7y ago
        Yeah, I think you're right. There are all of these people who bought in because they just wanted to make money, and they're getting impatient and trying to get the rest of the world in too. I'm interested in the tech and I want to work on it--so I'm just arguing that we shouldn't dismiss it. If you have the interest, now might be a good time to diversify in that direction, but it's nowhere near ready to compete with fiat currency in terms of usage by the masses.
Udik 7y ago
> Blockchains are irrevocable and unalterable But so are events in the real world. When you think about "reversing or changing a transaction" what you really mean is creating a new transaction that brings an equivalent amount back to the person that paid it. This is done in the real world by knowing the identity of the receiver person or entity and threatening them with consequences if the money is not returned. It seems to me more a problem of being able to identify the parties in a transaction rather than of mutability of the ledger.
anteatersa 7y ago
The faults that people are attributing to blockchain are also applicable to cash, if you go the market and buy some magic beans from dodgy Dave with cash you won't be getting your money back. If you buy something from a reputable supplier with cash/blockchain then you would probably get a refund if you had some form of receipt.
- notahacker 7y ago
  Sure, cash has some of the same shortcomings of BTC, but that's why cash isn't touted as the future of payments and in modern economies is mostly used for transactions which are either small or illegal, and isn't considered to be a smart way of storing or carrying large amounts of money.

harikb 7y ago

There are generally 3 kinds of fraud 1. A scammer cheating someone out of their life savings through social engineering 2. A central bank "unjustly" inflating currency and giving the newly printed money to specific industry/people etc 3. A person paying for merchandise with a stolen credit card or refusing payment after services/good is delivered. Fiat solves 1 and 3 (recovery) does not think 2 is a problem. Crypto solves 2 and 3. People say it is meant for solving 1.

jayd16 7y ago
Your wallet can be stolen and when using crypto so it doesn't solve 3 very well. Credit card fraud is regulated such that the consumer is protected after a manageable amount of theft, $50 in the US last I looked. If you use a bank you receive some protections but at that point the implantation is abstracted and not that relevant. IMO Cryrto is significantly worse in case 3.
- Acrobatic_Road 7y ago
  If you use a smart contract wallet you can actually protect yourself from losing all your money even if someone gets your private key. You can set a withdrawal limit of say, $50 and you can set a few recovery addresses (of friends, family or other personal wallets). So if I have $10,000 in my ethereum wallet and I post my private key in every forum and every chatroom on the internet then the most I lose is $50. Before 24 hours pass I send my remaining $9,950 to a pre-defined recovery address which is excluded from the withdrawal limit. Consumer protections are actually pretty good. The trouble is getting these tools in the hands of users.
  - Retric 7y ago
    The cost of doing that is making the wallet largely useless for purchasing anything over 50$. The independent ability to send all your money to a recovery address is a new security risk. Further, you need to notice the issue which means you could be our far more than 50$ unless you happen to be checking how much is in the wallet constantly. So, this is strictly worse than using a credit card.