6 ms·

Let's be realistic here. Buying and selling crypto via Credit Cards or Paypal is a magnet for fraud.

by ashconnor 6y ago

xyzzy_plugh 6y ago
Can shorten that down for you: Crypto is a magnet for fraud
- RIMR 6y ago
  I've bought and sold maybe $750,000 crypto in my life (and profited!), and while holding coin I've never been able to find a legitimate use for it that didn't seem like a novelty (Shop at [existing store], but with Bitcoin!). Pretty much all of the actual uses for cryptocurrency involve some sort of crime (drugs/warez/fraud/child porn). We've had Bitcoin for 11 years now, and nothing meaningful has changed. It wasn't revolutionary - all it did was introduce the anonymity of cash to the Internet.
  - jnwatson 6y ago
    Except without the anonymity.
    - tharne 6y ago
      There are plenty of other crypto currencies that do provide anonymity, that were built on the shoulders of bitcoin, e.g. Monero, ZCash, etc.
  - sk5t 6y ago
    I think it depends on personal circumstances. Residents of Venezuela, South Africa, Zimbabwe probably found crypto an incredibly vital way to stash their holdings in one currency and redeem in another, contrary to a perverse government's wishes--similar to converting cash to a small bag of diamonds and then fleeing. If your nation already uses a global reserve currency then the uses are not so compelling.
    - rrdharan 6y ago
      This Venezuelan story is so overblown: https://www.cryptoknowmics.com/news/crypto-influencer-breaks-myth-says-venezuela-not-keen-about-cryptocurrency/3 https://www.cryptoknowmics.com/news/crypto-influencer-breaks... At this point it really seems like the "Venezuela is why bitcoin matters" story is a useful emergent PR campaign narrative for the cryptocurrency world to justify their existence.
      - kemonocode 6y ago
        It's not entirely true, but also it's not entirely false either. Crypto still serves the needs of the under/unbanked, probably not as much as it could but certainly in meaningful and measurable ways, as much as detractors like to argue otherwise. Yes, Venezuelans want to eat, and yes, Venezuelans would probably convert any crypto into cash ASAP. But also due to the sanctions (first internal from the ill-fated currency exchange control schemes of the Chavez regime, then from the rest of the world) holding onto any amount of currency digitally is very risky- and these are risks that brokers pass down to the common populace in the form of outrageous fees, either explicit or as awful exchange rates. Crypto helps to leverage against that somewhat, and LocalBitcoins' traffic remains considerable [0] to this day. Unfortunately many Venezuelans now conflate shitcoins (e.g. Petro, BCash) with real crypto, and I can't exactly blame them, given how badly the Petro "experiment" ended up like (which, frankly, was just another attempt from the regime to launder money without needing to rely on foreign currency). If you ask someone if they accept USD they will invariably say yes these days, but cash only. If you want to send or receive hard money digitally, you'll need to have some "contact" to create or manage an US bank account in your stead, and just make do with the constant risk of that money just disappearing one day for whatever reason. And needless to say, holding onto large amounts of cash isn't exactly safe either, as you run the risk of getting robbed by "regular" criminals or ending up part of a police raid after someone snitches on you. Disclaimer: I'm Venezuelan, and I'd think I know more about our particular situation than some clout-chasing gringo influencer. ;) [1] [0] https://www.similarweb.com/website/localbitcoins.com/#overview https://www.similarweb.com/website/localbitcoins.com/#overvi... [1] I apologize if me derisively dismissing that person's arguments (or if the usage of "gringo" comes off as too offensive- it is mildly derogatory, but it's also playful) weakens my own, but I'm simply sick and tired of people that either have no skin in the game or with interests that lie elsewhere, and raise similar points against crypto when they're just patently untrue.
  - deleted 6y ago
    [deleted]
  - tharne 6y ago
    Here's a use case: Store your wealth digitally in an asset with a fixed supply that is not controlled by a government entity without the use of a third-party intermediary. Obviously this applies to only to Bitcoin and not inflationary cryptocurrencies.
    - deleted 6y ago
      [deleted]
    - tromp 6y ago
      Yes, obviously you cannot store wealth in a cryptocurrency whose inflation will at some point forever remain under 0.1% [sarcasm] Never mind that the yearly coin loss is probably closer to 1%.
      - tharne 6y ago
        You can store your wealth in anything you like, even highly inflationary assets like cash, if that floats your boat. I was clarifying the use case I offered, which was an asset with a fixed supply.
  - Lambdanaut 6y ago
    > I've never been able to find a legitimate use for it that didn't seem like a novelty (Shop at [existing store], but with Bitcoin!). You're let down because a currency is acting like a currency?
  - prussian 6y ago
    I think it did change one thing. It made it possible to ransom people's data.
  - phil21 6y ago
    > It wasn't revolutionary - all it did was introduce the anonymity of cash to the Internet I think you missed the point? That's it. That's the revolutionary part!
  - asenna 6y ago
    I was traveling to Budapest a couple years ago. Lost my debit card and needed to withdraw some cash. I looked up a Bitcoin ATM around me, used my phone to transfer some BTC and withdrew local currency (the fee was probably a bit high). I did not plan on doing this, I didn't even know how to use these BTC ATMs before this. But the ability to have access to cash in any country you are without international transfer hassle is one huge benefit.
- BTCOG 6y ago
  I can parallel that for you: Cash is a magnet for fraud Banks were just recently outed for laundering 800x more cash for drug cartels than Bitcoin or any cryptocurrency system has ever done.
  - edm0nd 6y ago
    And HSBC and JPMorgan got nothing but fined and slaps on the wrist. Is it really even a punishment if you made more than the fine imposed?
  - cma 6y ago
    Now re-do it as a percentage of cash activity and as a percentage of bitcoin activity.
  - warkdarrior 6y ago
    So your argument is that it is OK to promote and launch cryptocurrencies when we know that they are huge avenues for fraud, because banks also do it. Race to the bottom, here we come!
- deleted 6y ago
  [deleted]
- phocion 6y ago
  The internet is a magnet for scams. That doesn't mean there aren't legitimate uses for it
vbo 6y ago
There's no reason those concerns can't be mitigated, the same way paypal-generation services mitigated their own inherent risks.
dotancohen 6y ago
And bittorrent is a magnet for copyright infringement? I use bittorrent to download and distribute Linux distributions. Every bit and byte on my harddrive, from the OS to the applications to the data, is either open source, written by me, or paid for. I don't need people who should know better to draw parallels between my completely legal and moral use of bittorret and copyright infringement. And people who have perfectly legitimate and legal use of cryptocurrencies, of which there are many and some might argue more than the use of cash, do not need people who should know better to draw parallels between their usage of technology and anything illegal or immoral.
- ashconnor 6y ago
  But here there's actual monetary loss for Paypal or credit card issuers. Not an implied "lost sale" from a consumer that likely would not have even bought the song/movie/app in the first place.
rantwasp 6y ago
yes, crypto is a magnet for fraud /s did you ever hear the phrase “money laundering”? most fraud is done using “real” money. we should get rid of money to prevent fraud. /s Have you ever been denied an application for a checking account? What about a credit card?
zalkota 6y ago
US dollars are used in a majority of drug and child trafficking transactions. Should we disregard it?
ThrustVectoring 6y ago
The buying and selling is actually fine, what fraudsters prey on are irreversible transactions. So specifically crypto withdrawals and transfers are the issue, here. PayPal is not enabling this functionality. Buying, selling, shopping, and possibly deposits if they can swing the regulatory compliance bits. All of this is completely reversible if PayPal finds that it was done fraudulently. The only concerning part is "shopping" with crypto, and that's likely going to be restricted to merchants that already have a business agreement with PayPal. Under the hood it need not involve cryptocurrency at all except for displaying prices and debiting balances - instead of showing $XXXX, it shows YYYY_BTC and PayPal has to do figure out the currency conversion price for debiting the customer balance in BTC and crediting the merchant in USD.

Let's be realistic here. Buying and selling crypto via Credit Cards or Paypal is a magnet for fraud.

xyzzy_plugh 6y ago

Can shorten that down for you: Crypto is a magnet for fraud

RIMR 6y ago
I've bought and sold maybe $750,000 crypto in my life (and profited!), and while holding coin I've never been able to find a legitimate use for it that didn't seem like a novelty (Shop at [existing store], but with Bitcoin!). Pretty much all of the actual uses for cryptocurrency involve some sort of crime (drugs/warez/fraud/child porn). We've had Bitcoin for 11 years now, and nothing meaningful has changed. It wasn't revolutionary - all it did was introduce the anonymity of cash to the Internet.
- jnwatson 6y ago
  Except without the anonymity.
  - tharne 6y ago
    There are plenty of other crypto currencies that do provide anonymity, that were built on the shoulders of bitcoin, e.g. Monero, ZCash, etc.
- sk5t 6y ago
  I think it depends on personal circumstances. Residents of Venezuela, South Africa, Zimbabwe probably found crypto an incredibly vital way to stash their holdings in one currency and redeem in another, contrary to a perverse government's wishes--similar to converting cash to a small bag of diamonds and then fleeing. If your nation already uses a global reserve currency then the uses are not so compelling.
  - rrdharan 6y ago
    This Venezuelan story is so overblown: https://www.cryptoknowmics.com/news/crypto-influencer-breaks-myth-says-venezuela-not-keen-about-cryptocurrency/3 https://www.cryptoknowmics.com/news/crypto-influencer-breaks... At this point it really seems like the "Venezuela is why bitcoin matters" story is a useful emergent PR campaign narrative for the cryptocurrency world to justify their existence.
    - kemonocode 6y ago
      It's not entirely true, but also it's not entirely false either. Crypto still serves the needs of the under/unbanked, probably not as much as it could but certainly in meaningful and measurable ways, as much as detractors like to argue otherwise. Yes, Venezuelans want to eat, and yes, Venezuelans would probably convert any crypto into cash ASAP. But also due to the sanctions (first internal from the ill-fated currency exchange control schemes of the Chavez regime, then from the rest of the world) holding onto any amount of currency digitally is very risky- and these are risks that brokers pass down to the common populace in the form of outrageous fees, either explicit or as awful exchange rates. Crypto helps to leverage against that somewhat, and LocalBitcoins' traffic remains considerable [0] to this day. Unfortunately many Venezuelans now conflate shitcoins (e.g. Petro, BCash) with real crypto, and I can't exactly blame them, given how badly the Petro "experiment" ended up like (which, frankly, was just another attempt from the regime to launder money without needing to rely on foreign currency). If you ask someone if they accept USD they will invariably say yes these days, but cash only. If you want to send or receive hard money digitally, you'll need to have some "contact" to create or manage an US bank account in your stead, and just make do with the constant risk of that money just disappearing one day for whatever reason. And needless to say, holding onto large amounts of cash isn't exactly safe either, as you run the risk of getting robbed by "regular" criminals or ending up part of a police raid after someone snitches on you. Disclaimer: I'm Venezuelan, and I'd think I know more about our particular situation than some clout-chasing gringo influencer. ;) [1] [0] https://www.similarweb.com/website/localbitcoins.com/#overview https://www.similarweb.com/website/localbitcoins.com/#overvi... [1] I apologize if me derisively dismissing that person's arguments (or if the usage of "gringo" comes off as too offensive- it is mildly derogatory, but it's also playful) weakens my own, but I'm simply sick and tired of people that either have no skin in the game or with interests that lie elsewhere, and raise similar points against crypto when they're just patently untrue.
- deleted 6y ago
  [deleted]
- tharne 6y ago
  Here's a use case: Store your wealth digitally in an asset with a fixed supply that is not controlled by a government entity without the use of a third-party intermediary. Obviously this applies to only to Bitcoin and not inflationary cryptocurrencies.
  - deleted 6y ago
    [deleted]
  - tromp 6y ago
    Yes, obviously you cannot store wealth in a cryptocurrency whose inflation will at some point forever remain under 0.1% [sarcasm] Never mind that the yearly coin loss is probably closer to 1%.
    - tharne 6y ago
      You can store your wealth in anything you like, even highly inflationary assets like cash, if that floats your boat. I was clarifying the use case I offered, which was an asset with a fixed supply.
- Lambdanaut 6y ago
  > I've never been able to find a legitimate use for it that didn't seem like a novelty (Shop at [existing store], but with Bitcoin!). You're let down because a currency is acting like a currency?
- prussian 6y ago
  I think it did change one thing. It made it possible to ransom people's data.
- phil21 6y ago
  > It wasn't revolutionary - all it did was introduce the anonymity of cash to the Internet I think you missed the point? That's it. That's the revolutionary part!
- asenna 6y ago
  I was traveling to Budapest a couple years ago. Lost my debit card and needed to withdraw some cash. I looked up a Bitcoin ATM around me, used my phone to transfer some BTC and withdrew local currency (the fee was probably a bit high). I did not plan on doing this, I didn't even know how to use these BTC ATMs before this. But the ability to have access to cash in any country you are without international transfer hassle is one huge benefit.
BTCOG 6y ago
I can parallel that for you: Cash is a magnet for fraud Banks were just recently outed for laundering 800x more cash for drug cartels than Bitcoin or any cryptocurrency system has ever done.
- edm0nd 6y ago
  And HSBC and JPMorgan got nothing but fined and slaps on the wrist. Is it really even a punishment if you made more than the fine imposed?
- cma 6y ago
  Now re-do it as a percentage of cash activity and as a percentage of bitcoin activity.
- warkdarrior 6y ago
  So your argument is that it is OK to promote and launch cryptocurrencies when we know that they are huge avenues for fraud, because banks also do it. Race to the bottom, here we come!
deleted 6y ago
[deleted]
phocion 6y ago
The internet is a magnet for scams. That doesn't mean there aren't legitimate uses for it

vbo 6y ago

There's no reason those concerns can't be mitigated, the same way paypal-generation services mitigated their own inherent risks.

dotancohen 6y ago

And bittorrent is a magnet for copyright infringement? I use bittorrent to download and distribute Linux distributions. Every bit and byte on my harddrive, from the OS to the applications to the data, is either open source, written by me, or paid for. I don't need people who should know better to draw parallels between my completely legal and moral use of bittorret and copyright infringement. And people who have perfectly legitimate and legal use of cryptocurrencies, of which there are many and some might argue more than the use of cash, do not need people who should know better to draw parallels between their usage of technology and anything illegal or immoral.

ashconnor 6y ago
But here there's actual monetary loss for Paypal or credit card issuers. Not an implied "lost sale" from a consumer that likely would not have even bought the song/movie/app in the first place.

rantwasp 6y ago

yes, crypto is a magnet for fraud /s did you ever hear the phrase “money laundering”? most fraud is done using “real” money. we should get rid of money to prevent fraud. /s Have you ever been denied an application for a checking account? What about a credit card?

zalkota 6y ago

US dollars are used in a majority of drug and child trafficking transactions. Should we disregard it?

ThrustVectoring 6y ago

The buying and selling is actually fine, what fraudsters prey on are irreversible transactions. So specifically crypto withdrawals and transfers are the issue, here. PayPal is not enabling this functionality. Buying, selling, shopping, and possibly deposits if they can swing the regulatory compliance bits. All of this is completely reversible if PayPal finds that it was done fraudulently. The only concerning part is "shopping" with crypto, and that's likely going to be restricted to merchants that already have a business agreement with PayPal. Under the hood it need not involve cryptocurrency at all except for displaying prices and debiting balances - instead of showing $XXXX, it shows YYYY_BTC and PayPal has to do figure out the currency conversion price for debiting the customer balance in BTC and crediting the merchant in USD.