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It's true for cash, but not for cards. If a merchant incorrectly gets my $1000, and I charge him back, I will get my money, even if he spent $1000 on coke and h

It's true for cash, but not for cards. If a merchant incorrectly gets my $1000, and I charge him back, I will get my money, even if he spent $1000 on coke and hookers.

ska 5y ago
You'll get different cash back, sure. Which was sort of the point; it's part of what makes CC useful. I was noting that there is nothing fundamentally different between say you accepting a payment in bitcoin and refusing to cough up the key when told to reverse it, or accepting a payment in cash and burying it then refusing to tell police where. Fundamentally there are mechanisms to reverse this, or punish/constrain you for obstructing the process. Some payment systems have them built in at a very low level (CC chargebacks), some rely on professional standard (hold harmelss), etc. Some rely on court systems. That's a trade off of convenience vs. risk, but doesn't change the fundamental point that a payment system without a standard reversal mechanism is going to have limited use.
- yanmaani 5y ago
  > There is nothing fundamentally different between say ... bitcoin ... and ... cash ... Agreed. > That's a trade off of convenience vs. risk, but doesn't change the fundamentals. There is. The ones that rely on court mechanisms aren't the payment mechanism being reversible, it's something else (the storage) that gives first. It's true that if you keep it in your bank account, all transactions are reversible. But that's a statement about property rights, not about finality. If I have a solid means of "storing" my money, such as by burying it in my back yard, then the payment itself is irreversible. That's not true for cards, which are reversible even if your storage is 100% robust.
  - ska 5y ago
    > the payment mechanism being reversible, it's something else (the storage) that gives I'm not sure we agree on this being fundamental. At least you can define it as a categorical difference (sure) but not really a practical difference. I think the articles points were twofold: 1) Property rights, or more generally the legal & regulatory systems, trump any rules imposed or agreed in your system of payments 2) Most payments systems feature reversal processes for necessary reasons (but if they don't, see (1) as fallback position) Both of these seem important to understand if you want to understand how a payment system works or could work in the future, and also to understand your exposure/risk in using them. People mostly understand the trade offs and limitations of cash; mostly probably don't understand them well for lots of payment systems.
    - yanmaani 5y ago
      I don't think the first point is accurate. You have to study the entire system, which is made up of two parts: 1. Storage 2. Payment rail If your storage is solid (e.g. keys in brain wallet, account in crooked bank, money in shoebox) and the payment rail is solid (e.g. gold, cryptocurrency, cash), you're good. (To clarify, "solid" here means "beyond the legal-regulatory system", which means the rules aren't trumped.) Otherwise, you aren't. I say that Bitcoin has "finality," because it does the job of payment rail with 100% irreversibility. Grant that Bitcoin is a mediocre storage (1). But the payment rail (2) truly is irreversible. The combined system of two disjoint parts, built out of bitcoin-as-storage and bitcoin-as-payment-rail, is not.
      - ska 5y ago
        > "beyond the legal-regulatory system", I think it is a mistake to believe this is a thing. You can be allowed to operate in gray areas for a bunch of reasons, or you can be small enough not to be too bothered about (e.g. shutting you down not deemed worth the effort); but this is a choice of those same systems, not in your control really. Although to be fair, I guess this stuff really varies by jurisdiction. Otoh, where the gray areas get bigger, your chances of having that go against you are bigger also.
        yanmaani 5y ago
        It's certainly a thing for the payment rail - Bitcoin qua payment rail is entirely irreversible. So as a category in the real world, it is trivially a thing. Whether such storage exists is a much better question. I think it depends on what you want to do with it. For example, if the Bitfinex guys were ideologically motivated, they could've spent all the money on, I don't know, political ads or whatever. More generally, I think you can certainly come up with storage that is outside the reach of a given threat actor in pursuit of a given goal.
        ska 5y ago
        > > So as a category in the real world, it is trivially a thing. I'm not saying bitcoin isn't a thing in the world; I was saying that I don't think that makes it "beyond the legal-regulatory system", or that that is really even a helpful/useful concept. I mean we can talk about various shadow economies, but they are just that - and not really in scope for OP article.

It's true for cash, but not for cards. If a merchant incorrectly gets my $1000, and I charge him back, I will get my money, even if he spent $1000 on coke and hookers.

ska 5y ago

You'll get different cash back, sure. Which was sort of the point; it's part of what makes CC useful. I was noting that there is nothing fundamentally different between say you accepting a payment in bitcoin and refusing to cough up the key when told to reverse it, or accepting a payment in cash and burying it then refusing to tell police where. Fundamentally there are mechanisms to reverse this, or punish/constrain you for obstructing the process. Some payment systems have them built in at a very low level (CC chargebacks), some rely on professional standard (hold harmelss), etc. Some rely on court systems. That's a trade off of convenience vs. risk, but doesn't change the fundamental point that a payment system without a standard reversal mechanism is going to have limited use.

yanmaani 5y ago
> There is nothing fundamentally different between say ... bitcoin ... and ... cash ... Agreed. > That's a trade off of convenience vs. risk, but doesn't change the fundamentals. There is. The ones that rely on court mechanisms aren't the payment mechanism being reversible, it's something else (the storage) that gives first. It's true that if you keep it in your bank account, all transactions are reversible. But that's a statement about property rights, not about finality. If I have a solid means of "storing" my money, such as by burying it in my back yard, then the payment itself is irreversible. That's not true for cards, which are reversible even if your storage is 100% robust.
- ska 5y ago
  > the payment mechanism being reversible, it's something else (the storage) that gives I'm not sure we agree on this being fundamental. At least you can define it as a categorical difference (sure) but not really a practical difference. I think the articles points were twofold: 1) Property rights, or more generally the legal & regulatory systems, trump any rules imposed or agreed in your system of payments 2) Most payments systems feature reversal processes for necessary reasons (but if they don't, see (1) as fallback position) Both of these seem important to understand if you want to understand how a payment system works or could work in the future, and also to understand your exposure/risk in using them. People mostly understand the trade offs and limitations of cash; mostly probably don't understand them well for lots of payment systems.
  - yanmaani 5y ago
    I don't think the first point is accurate. You have to study the entire system, which is made up of two parts: 1. Storage 2. Payment rail If your storage is solid (e.g. keys in brain wallet, account in crooked bank, money in shoebox) and the payment rail is solid (e.g. gold, cryptocurrency, cash), you're good. (To clarify, "solid" here means "beyond the legal-regulatory system", which means the rules aren't trumped.) Otherwise, you aren't. I say that Bitcoin has "finality," because it does the job of payment rail with 100% irreversibility. Grant that Bitcoin is a mediocre storage (1). But the payment rail (2) truly is irreversible. The combined system of two disjoint parts, built out of bitcoin-as-storage and bitcoin-as-payment-rail, is not.
    - ska 5y ago
      > "beyond the legal-regulatory system", I think it is a mistake to believe this is a thing. You can be allowed to operate in gray areas for a bunch of reasons, or you can be small enough not to be too bothered about (e.g. shutting you down not deemed worth the effort); but this is a choice of those same systems, not in your control really. Although to be fair, I guess this stuff really varies by jurisdiction. Otoh, where the gray areas get bigger, your chances of having that go against you are bigger also.
      - yanmaani 5y ago
        It's certainly a thing for the payment rail - Bitcoin qua payment rail is entirely irreversible. So as a category in the real world, it is trivially a thing. Whether such storage exists is a much better question. I think it depends on what you want to do with it. For example, if the Bitfinex guys were ideologically motivated, they could've spent all the money on, I don't know, political ads or whatever. More generally, I think you can certainly come up with storage that is outside the reach of a given threat actor in pursuit of a given goal.
        ska 5y ago
        > > So as a category in the real world, it is trivially a thing. I'm not saying bitcoin isn't a thing in the world; I was saying that I don't think that makes it "beyond the legal-regulatory system", or that that is really even a helpful/useful concept. I mean we can talk about various shadow economies, but they are just that - and not really in scope for OP article.