5 ms·

> However, decentralized immutability means that nothing can be done should an unintended action occur with your account. The alternative is the current state

by cal5k 5y ago

> However, decentralized immutability means that nothing can be done should an unintended action occur with your account. The alternative is the current state of affairs. In Canada this means banks unilaterally decide what is mutable and what is not depending on what suits them. Merchant accepting payments? 100% mutable, merchant beware. Someone's bank account was compromised via credential-stuffing and money was wired to an offshore account? Sorry, immutable - pick a better password next time, dummy. It's not the bank's responsibility to, say, implement modern 2FA. Hacks and compromises are forcing these systems to improve at a rapid rate, whereas banks have been able to largely avoid such wholesale improvements via legal and political means. If it's in the contract, you're out of luck.

clpm4j 5y ago
My bank accounts and credit cards have all essentially forced modern 2FA implementation over the past few years (USA). And the handful of times I've had fraudulent activity on my cards, it's been reversed and settled within a matter of days. From my perspective I actually think modern banking (again, USA-specific) has been improving pretty rapidly in terms of customer experience (shout out to Ally Bank).
- e40 5y ago
  Did you have fraudulent transactions on a non-CC? CC companies have rules on them that make it easy to fight fraud. Non-CC accounts... not so much.
  - clpm4j 5y ago
    I've actually had an incident of e-commerce fraud related to my checking account quite a while ago, and Ally Bank conducted a week-long review and determined it was fraudulent, put the money back in my account, and sent me a new debit card. It was pretty painless from what I remember.
  - graeme 5y ago
    I did. ATM skimming got my bank account in brazil. Took about a week, full reversal. Hardly any fuss.
Nursie 5y ago
Merchants should beware. Society has been learning since literally the classical era, Ancient Rome, if not before. We set up systems to allow clawback from merchants because it’s necessary.
- rozab 5y ago
  https://en.m.wikipedia.org/wiki/Complaint_tablet_to_Ea-nasir https://en.m.wikipedia.org/wiki/Complaint_tablet_to_Ea-nasir
ivalm 5y ago
Honestly this current state of affairs seems like a much better alternatives. I'll take any reversibility vs no reversibility. I only wish there was more reversibility. In terms of vulnerability to hacking (which you alluded to in your 2FA discussion), traditional finance is way more robust and loses less money as fraction of total volume.
- doomroot 5y ago
  You can build reversibility on top of non-reversible platforms. Not the other way around. Look into bitcoin “vaults” for some interesting research in this area.
  - ivalm 5y ago
    But I literally don't want non-reversible transactions. I cannot think of a case where non-reversibility is desired. I understand you can build reversibility on top, but why? Better to just have an underlying fully-reversible platform -- something that traditional finance is moving towards. Edit: looking at vaults looks like it is just a way to secure your cold storage wallet. But I want reversibility in my hot wallets, that's the one that's most likely to be compromised anyways.
    - JoshTriplett 5y ago
      > But I literally don't want non-reversible transactions. I cannot think of a case where non-reversibility is desired. I understand you can build reversibility on top, but why? Others do have use cases for such transactions. And even if you want reversibility, different transactions may call for different policies and implementations for reversibility. If you hard-code one reversibility mechanism in the lowest layer, you prevent alternative policies. Consider, for instance, a monetary exchange. You pay X in one currency, and get Y in another. If the transaction in X is reversible, someone can pay X, get Y, then get X back. Even if Y is reversible, it's not guaranteed that the two are linked such that either both transactions happen or neither do. If you build reversibility on top of an underlying system, you can provide many different implementations of it. For instance, you could use an escrow service, which guarantees that they hold two things to be exchanged before passing along either one. Consider a domain name escrow service (confirm exclusive ownership of the domain before releasing payment), or an artistic commission escrow service (provide a watermarked/partial preview, release the full version and the payment at the same time). See https://en.wikipedia.org/wiki/End-to-end_principle https://en.wikipedia.org/wiki/End-to-end_principle , which argues for a simple network with additional features layered on top, rather than a complex network with all features mandatory. Tying this back to the article: it's absolutely a high risk to make large quantities of money subject to a fully automated system with no oversight or controls. On the other hand, fully automated systems enable systems and experiments that wouldn't be possible otherwise. There's value in having both reversible and non-reversible systems, and selecting an appropriate system for the type of transaction and the value and risk involved.
simonw 5y ago
This is why I like financial systems with attached legal systems, so you have a human-driven mechanism for disputes as opposed to "code is law, you're out of luck".
matthewdgreen 5y ago
A deeper diagnosis is that any banking system with clawback/immutability is fundamentally going to have to be permissioned and somewhat closed. You have to know who every participant is, and everyone has to be subject to a risk analysis. A fraud risk anywhere in the system is a fraud risk everywhere in the system. This leads to a huge amount of inefficiency and rampant anti-competitive business arrangements. We still pay ~3% fees on credit card payments (in the US) that haven't dropped in decades -- despite the fact that nearly every IT business has seen 99%+ cost decreases since the 1970s. There's nothing wrong with mutability as an idea. If people want to build closed and mutable systems with a clawback feature, they should be able to. But those closed systems should be built on top of an electronic funds transfer system, they shouldn't be built into it. Then there's a chance you might actually see some competition.
jayd16 5y ago
The real irony is this protection is a complete fantasy by the crypto community. Business still operates in-the-real and is still subject to legal action. It doesn't matter how irreversible the block chain is if you can be sued. The only difference at the moment is people are using crypto to skirt long standing consumer protections. Merchants naturally have more power in court than any individual so the power has really shifted away from the consumer. But again, the legal system is king. It doesn't matter what the computer says.
- tim333 5y ago
  Not if it's some decentralized offshore thing. Which legal system are you going to use to sue bitcoin, and where is their office to send the paperwork?
  - wizzwizz4 5y ago
    Which legal system are you going to use to sue dollar, or euro? That's not how it currently works, either.
- noxer 5y ago
  >But again, the legal system is king. It doesn't matter what the computer says. There are plenty situation where you dont want or need or can have a legal system to be king. For example: - Cross jurisdiction business, where there is no easy way to sue. - Lottery/betting like systems where the systems rules are the rules people agreed on and its intentionally that there are no way to dispute/sue anyone. - DEX (decentral exchanges) order books are public, participant anonymous or pseudonymous and settlement must be final and indisputable. If that's not the case you may as well use a traditional trading solution with a third party handling the trade. You can sue everyone then but you will have a really hard time proofing if the operator itself cheated. Also you have a middlemen who takes a cut for doing essentially nothing. And on top of that you also have the additional risk of getting sued yourself. I'm sure there is plenty more. It dont see why people keep trying to declare crypto systems or the traditional system to be the "winner" there is no winner there is choice and people pick the winner for each use case.

by cal5k 5y ago

clpm4j 5y ago

My bank accounts and credit cards have all essentially forced modern 2FA implementation over the past few years (USA). And the handful of times I've had fraudulent activity on my cards, it's been reversed and settled within a matter of days. From my perspective I actually think modern banking (again, USA-specific) has been improving pretty rapidly in terms of customer experience (shout out to Ally Bank).

e40 5y ago
Did you have fraudulent transactions on a non-CC? CC companies have rules on them that make it easy to fight fraud. Non-CC accounts... not so much.
- clpm4j 5y ago
  I've actually had an incident of e-commerce fraud related to my checking account quite a while ago, and Ally Bank conducted a week-long review and determined it was fraudulent, put the money back in my account, and sent me a new debit card. It was pretty painless from what I remember.
- graeme 5y ago
  I did. ATM skimming got my bank account in brazil. Took about a week, full reversal. Hardly any fuss.

Nursie 5y ago

Merchants should beware. Society has been learning since literally the classical era, Ancient Rome, if not before. We set up systems to allow clawback from merchants because it’s necessary.

rozab 5y ago
https://en.m.wikipedia.org/wiki/Complaint_tablet_to_Ea-nasir https://en.m.wikipedia.org/wiki/Complaint_tablet_to_Ea-nasir

ivalm 5y ago

Honestly this current state of affairs seems like a much better alternatives. I'll take any reversibility vs no reversibility. I only wish there was more reversibility. In terms of vulnerability to hacking (which you alluded to in your 2FA discussion), traditional finance is way more robust and loses less money as fraction of total volume.

doomroot 5y ago
You can build reversibility on top of non-reversible platforms. Not the other way around. Look into bitcoin “vaults” for some interesting research in this area.
- ivalm 5y ago
  But I literally don't want non-reversible transactions. I cannot think of a case where non-reversibility is desired. I understand you can build reversibility on top, but why? Better to just have an underlying fully-reversible platform -- something that traditional finance is moving towards. Edit: looking at vaults looks like it is just a way to secure your cold storage wallet. But I want reversibility in my hot wallets, that's the one that's most likely to be compromised anyways.
  - JoshTriplett 5y ago
    > But I literally don't want non-reversible transactions. I cannot think of a case where non-reversibility is desired. I understand you can build reversibility on top, but why? Others do have use cases for such transactions. And even if you want reversibility, different transactions may call for different policies and implementations for reversibility. If you hard-code one reversibility mechanism in the lowest layer, you prevent alternative policies. Consider, for instance, a monetary exchange. You pay X in one currency, and get Y in another. If the transaction in X is reversible, someone can pay X, get Y, then get X back. Even if Y is reversible, it's not guaranteed that the two are linked such that either both transactions happen or neither do. If you build reversibility on top of an underlying system, you can provide many different implementations of it. For instance, you could use an escrow service, which guarantees that they hold two things to be exchanged before passing along either one. Consider a domain name escrow service (confirm exclusive ownership of the domain before releasing payment), or an artistic commission escrow service (provide a watermarked/partial preview, release the full version and the payment at the same time). See https://en.wikipedia.org/wiki/End-to-end_principle https://en.wikipedia.org/wiki/End-to-end_principle , which argues for a simple network with additional features layered on top, rather than a complex network with all features mandatory. Tying this back to the article: it's absolutely a high risk to make large quantities of money subject to a fully automated system with no oversight or controls. On the other hand, fully automated systems enable systems and experiments that wouldn't be possible otherwise. There's value in having both reversible and non-reversible systems, and selecting an appropriate system for the type of transaction and the value and risk involved.

simonw 5y ago

This is why I like financial systems with attached legal systems, so you have a human-driven mechanism for disputes as opposed to "code is law, you're out of luck".

matthewdgreen 5y ago

A deeper diagnosis is that any banking system with clawback/immutability is fundamentally going to have to be permissioned and somewhat closed. You have to know who every participant is, and everyone has to be subject to a risk analysis. A fraud risk anywhere in the system is a fraud risk everywhere in the system. This leads to a huge amount of inefficiency and rampant anti-competitive business arrangements. We still pay ~3% fees on credit card payments (in the US) that haven't dropped in decades -- despite the fact that nearly every IT business has seen 99%+ cost decreases since the 1970s. There's nothing wrong with mutability as an idea. If people want to build closed and mutable systems with a clawback feature, they should be able to. But those closed systems should be built on top of an electronic funds transfer system, they shouldn't be built into it. Then there's a chance you might actually see some competition.

jayd16 5y ago

The real irony is this protection is a complete fantasy by the crypto community. Business still operates in-the-real and is still subject to legal action. It doesn't matter how irreversible the block chain is if you can be sued. The only difference at the moment is people are using crypto to skirt long standing consumer protections. Merchants naturally have more power in court than any individual so the power has really shifted away from the consumer. But again, the legal system is king. It doesn't matter what the computer says.

tim333 5y ago
Not if it's some decentralized offshore thing. Which legal system are you going to use to sue bitcoin, and where is their office to send the paperwork?
- wizzwizz4 5y ago
  Which legal system are you going to use to sue dollar, or euro? That's not how it currently works, either.
noxer 5y ago
>But again, the legal system is king. It doesn't matter what the computer says. There are plenty situation where you dont want or need or can have a legal system to be king. For example: - Cross jurisdiction business, where there is no easy way to sue. - Lottery/betting like systems where the systems rules are the rules people agreed on and its intentionally that there are no way to dispute/sue anyone. - DEX (decentral exchanges) order books are public, participant anonymous or pseudonymous and settlement must be final and indisputable. If that's not the case you may as well use a traditional trading solution with a third party handling the trade. You can sue everyone then but you will have a really hard time proofing if the operator itself cheated. Also you have a middlemen who takes a cut for doing essentially nothing. And on top of that you also have the additional risk of getting sued yourself. I'm sure there is plenty more. It dont see why people keep trying to declare crypto systems or the traditional system to be the "winner" there is no winner there is choice and people pick the winner for each use case.