3 ms·

How is it any different than determining if a credit card charge was fraudulent? Either way, someone "figured out a way" to extract funds.

endisneigh 5y ago
Credit cards are centralized and it's trivial because of that.
- anamexis 5y ago
  How is it trivial to determine if a charge was fraudulent? Fraudulent charges are made in the exact same way as genuine ones.
  - endisneigh 5y ago
    Depends on the nature of it - if the locale is different for example you can immediately reverse it and ask the vendor the fraudulent charge came from for details regarding the transaction and cross reference with the details about the owner of the card. However if you were using stolen cash it wouldn't really be possible. In this scenario the stolen private key and corresponding bitcoin is like stealing the cash. There's not really anyway to determine anything.
    - anamexis 5y ago
      Maybe fraudulent wire transfers would be a better analogy, but I don't think this is fundamentally different than traditional banking. You determine if a charge was fraudulent by whether or not you authorized it.
      - endisneigh 5y ago
        If you stole the private key how would you be able to determine who the original authorized user is? More simply: how can you distinguish someone who ceded their Bitcoin voluntarily to someone else vs someone who had it stolen from them with no centralized entities involved?
        anamexis 5y ago
        My point is that you distinguish it in the exact same way as you distinguish a charge from a cloned credit card, or a bank transfer with a stolen password, or cash swiped out of a wallet. In all cases, the fraudulent money is used in exactly the same way as genuine use. If you figure out a bitcoin private key, that doesn't give you any more right to the money than figuring out a way to guess someone's bank password. And remediation would be the same.
        endisneigh 5y ago
        You're not really answering the question. It's fundamentally easier to do it with cloned credit cards, or banks because they are centralized entities dealing with individuals with verified identities. Even if you had someone's bank password, what will you do with the money? Transfer it to another bank? If so the wire will be reversed. Why? Because you can call someone and tell them to do so and an investigation will be done, but you will be presumed to be innocent first. So again, with Bitcoin, with no centralized entities involved, how can you distinguish between someone ceding their bitcoin to someone else vs. it being stolen from them?
        anamexis 5y ago
        If you wire money to a fraudulent account, it's gone forever. Unless you can track down the fraudsters for criminal charges.
        endisneigh 5y ago
        This isn't true though. Look up SWIFT Recall. Again, we're talking about Bitcoin here, not wire fraud.
        anamexis 5y ago
        I don't think this discussion is going anywhere, but you most certainly can irrevocably lose money with wire fraud. Even many debit cards are not covered from fraud. And we are comparing Bitcoin and wire fraud.
- zitterbewegung 5y ago
  I went to a presentation where Capital one has an anomaly detection system for credit card fraud that could process a transaction below 1ms or even lower than that. They had a system with around a Terabyte of memory using a streaming data system (I think it was spark). This is a nontrivial system that has false positives and negatives.
  - endisneigh 5y ago
    False positives or negatives don't really matter with credit card systems because you have recourse from the perspective of the end-user. Obviously Capital One incurs costs around such things and so they have complicated infrastructure developed, sure. However from the end user perspective: If you have a credit card and a fraudulent charge appears you call the credit card, they freeze the transaction, contact the vendor who may or may not be able to corroborate the legitimacy of the charge, and it's done. The alternative would be using cash, where it is not possible at all. So in comparison to the alternative, I do believe it's "trivial." That being said I regret using that word, I should've used "straightforward", instead.
    - anamexis 5y ago
      The merchant is also an end user, and they lose the money.

endisneigh 5y ago

Credit cards are centralized and it's trivial because of that.

anamexis 5y ago
How is it trivial to determine if a charge was fraudulent? Fraudulent charges are made in the exact same way as genuine ones.
- endisneigh 5y ago
  Depends on the nature of it - if the locale is different for example you can immediately reverse it and ask the vendor the fraudulent charge came from for details regarding the transaction and cross reference with the details about the owner of the card. However if you were using stolen cash it wouldn't really be possible. In this scenario the stolen private key and corresponding bitcoin is like stealing the cash. There's not really anyway to determine anything.
  - anamexis 5y ago
    Maybe fraudulent wire transfers would be a better analogy, but I don't think this is fundamentally different than traditional banking. You determine if a charge was fraudulent by whether or not you authorized it.
    - endisneigh 5y ago
      If you stole the private key how would you be able to determine who the original authorized user is? More simply: how can you distinguish someone who ceded their Bitcoin voluntarily to someone else vs someone who had it stolen from them with no centralized entities involved?
      - anamexis 5y ago
        My point is that you distinguish it in the exact same way as you distinguish a charge from a cloned credit card, or a bank transfer with a stolen password, or cash swiped out of a wallet. In all cases, the fraudulent money is used in exactly the same way as genuine use. If you figure out a bitcoin private key, that doesn't give you any more right to the money than figuring out a way to guess someone's bank password. And remediation would be the same.
        endisneigh 5y ago
        You're not really answering the question. It's fundamentally easier to do it with cloned credit cards, or banks because they are centralized entities dealing with individuals with verified identities. Even if you had someone's bank password, what will you do with the money? Transfer it to another bank? If so the wire will be reversed. Why? Because you can call someone and tell them to do so and an investigation will be done, but you will be presumed to be innocent first. So again, with Bitcoin, with no centralized entities involved, how can you distinguish between someone ceding their bitcoin to someone else vs. it being stolen from them?
        anamexis 5y ago
        If you wire money to a fraudulent account, it's gone forever. Unless you can track down the fraudsters for criminal charges.
        endisneigh 5y ago
        This isn't true though. Look up SWIFT Recall. Again, we're talking about Bitcoin here, not wire fraud.
        anamexis 5y ago
        I don't think this discussion is going anywhere, but you most certainly can irrevocably lose money with wire fraud. Even many debit cards are not covered from fraud. And we are comparing Bitcoin and wire fraud.
zitterbewegung 5y ago
I went to a presentation where Capital one has an anomaly detection system for credit card fraud that could process a transaction below 1ms or even lower than that. They had a system with around a Terabyte of memory using a streaming data system (I think it was spark). This is a nontrivial system that has false positives and negatives.
- endisneigh 5y ago
  False positives or negatives don't really matter with credit card systems because you have recourse from the perspective of the end-user. Obviously Capital One incurs costs around such things and so they have complicated infrastructure developed, sure. However from the end user perspective: If you have a credit card and a fraudulent charge appears you call the credit card, they freeze the transaction, contact the vendor who may or may not be able to corroborate the legitimacy of the charge, and it's done. The alternative would be using cash, where it is not possible at all. So in comparison to the alternative, I do believe it's "trivial." That being said I regret using that word, I should've used "straightforward", instead.
  - anamexis 5y ago
    The merchant is also an end user, and they lose the money.