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People accept checks.. edit: When someone sends you a transaction, it registers more or less immediately. It is only the confirmations in the blockchain (that

by eof 15y ago

People accept checks.. edit: When someone sends you a transaction, it registers more or less immediately. It is only the confirmations in the blockchain (that happen every ~10 minutes) that give you confidence that the coins were not double spent.

ceejayoz 15y ago
Checks have legal penalties for passing fakes. Not so for bitcoin.
- eof 15y ago
  I was really just commenting on the technical side. From a technical standpoint bitcoins are far more convenient than checks; which have been successful by any measure. There is no reason there couldn't be a law that says "it is illegal to attempt to defraud merchants by trying to double spend bitcoin." From a technical standpoint, if you send me a payment and I have no reason to mistrust you (similar to my accepting a check for payment), seeing the payment show up in my account immediately is pretty satisfactory. Further if it becomes a problem, services similar to clearcoin could pop up; allowing users to 'store' coins in a trusted third party, like a generalized escrow-service that companies could trust. So unlike clearcoin which has coins transfered per-transaction, they might offer a service where you can just store your coins there, and business will trust unconfirmed transactions from clearcoin; thus they wouldn't have to trust you. Really though, I doubt it will become any more of a problem than bad checks are.
  - rprasad 15y ago
    Which still brings us back to the fundamental flaw of bitcoin: it is a fiat currency without a fiat. If bitcoin transactions are only trustworthy in jurisdictions with laws governing such transactions (i.e., none), it is safer and more convenient to simply use the local currency. And of course, governments will not voluntarily protect transactions in competing currencies. Bad checks are an enormous problem. One of the reasons that merchants favor credit cards, despite the high transaction fees, is that the incidence of non-payment fraud is both lower and less costly. If Bitcoin is susceptable to nonpayment fraud, it is a non-starter as far as widespread adoption is concerned.
  - ceejayoz 15y ago
    > There is no reason there couldn't be a law that says "it is illegal to attempt to defraud merchants by trying to double spend bitcoin." There's a big reason - government hostility to bitcoin.
  - caf 15y ago
    For such a law to be operative, you would have to give up the anonymity that bitcoin transactions allow.
- DenisM 15y ago
  Fraud is fraud, no matter the medium.
  - deleted 15y ago
    [deleted]
  - ceejayoz 15y ago
    Sure, but if the government is indifferent or actively hostile, good luck getting restitution.
    - wtallis 15y ago
      Are you saying that you think a court would dismiss a civil suit over a bitcoin transaction, or did you just fail include the scare quotes around "the government"?
      - ceejayoz 15y ago
        Government antipathy could range from being uninterested in prosecuting criminal fraud to actively outlawing the currency. If it's outlawed, you've no more chance getting a civil suit through than the nitwits who call the cops when someone stole their marijuana.
        DenisM 15y ago
        Government is not a singular entity. The courts will generally judge a civil lawsuit, even if executive branch hates the subject with a passion. In fact, many of the lawsuits are against the government, and they get heard. All you need to do is show that you were wronged, and you can sue, and have your day in court. Of course if you open yourself up to criminal prosecution (which could be if legislative outlaws bitcoins, directly or not) then it's best not to pursue that route. But that doesn't matter, government is not the only entity that can resolve conflicts. Online reputation management, trusted third-party processors (escrow), the mob, and insurance companies can all reduce fraud to manageable size.

by eof 15y ago

ceejayoz 15y ago

Checks have legal penalties for passing fakes. Not so for bitcoin.

eof 15y ago
I was really just commenting on the technical side. From a technical standpoint bitcoins are far more convenient than checks; which have been successful by any measure. There is no reason there couldn't be a law that says "it is illegal to attempt to defraud merchants by trying to double spend bitcoin." From a technical standpoint, if you send me a payment and I have no reason to mistrust you (similar to my accepting a check for payment), seeing the payment show up in my account immediately is pretty satisfactory. Further if it becomes a problem, services similar to clearcoin could pop up; allowing users to 'store' coins in a trusted third party, like a generalized escrow-service that companies could trust. So unlike clearcoin which has coins transfered per-transaction, they might offer a service where you can just store your coins there, and business will trust unconfirmed transactions from clearcoin; thus they wouldn't have to trust you. Really though, I doubt it will become any more of a problem than bad checks are.
- rprasad 15y ago
  Which still brings us back to the fundamental flaw of bitcoin: it is a fiat currency without a fiat. If bitcoin transactions are only trustworthy in jurisdictions with laws governing such transactions (i.e., none), it is safer and more convenient to simply use the local currency. And of course, governments will not voluntarily protect transactions in competing currencies. Bad checks are an enormous problem. One of the reasons that merchants favor credit cards, despite the high transaction fees, is that the incidence of non-payment fraud is both lower and less costly. If Bitcoin is susceptable to nonpayment fraud, it is a non-starter as far as widespread adoption is concerned.
- ceejayoz 15y ago
  > There is no reason there couldn't be a law that says "it is illegal to attempt to defraud merchants by trying to double spend bitcoin." There's a big reason - government hostility to bitcoin.
- caf 15y ago
  For such a law to be operative, you would have to give up the anonymity that bitcoin transactions allow.
DenisM 15y ago
Fraud is fraud, no matter the medium.
- deleted 15y ago
  [deleted]
- ceejayoz 15y ago
  Sure, but if the government is indifferent or actively hostile, good luck getting restitution.
  - wtallis 15y ago
    Are you saying that you think a court would dismiss a civil suit over a bitcoin transaction, or did you just fail include the scare quotes around "the government"?
    - ceejayoz 15y ago
      Government antipathy could range from being uninterested in prosecuting criminal fraud to actively outlawing the currency. If it's outlawed, you've no more chance getting a civil suit through than the nitwits who call the cops when someone stole their marijuana.
      - DenisM 15y ago
        Government is not a singular entity. The courts will generally judge a civil lawsuit, even if executive branch hates the subject with a passion. In fact, many of the lawsuits are against the government, and they get heard. All you need to do is show that you were wronged, and you can sue, and have your day in court. Of course if you open yourself up to criminal prosecution (which could be if legislative outlaws bitcoins, directly or not) then it's best not to pursue that route. But that doesn't matter, government is not the only entity that can resolve conflicts. Online reputation management, trusted third-party processors (escrow), the mob, and insurance companies can all reduce fraud to manageable size.