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How can a Bitcoin transaction be fraudulent? They are irreversible and if the Bitcoin is stolen that's not the merchant's problem. The whole point of Bitcoin

by devit 5y ago

How can a Bitcoin transaction be fraudulent? They are irreversible and if the Bitcoin is stolen that's not the merchant's problem. The whole point of Bitcoin is to eliminate the possibility of chargebacks and thus the need for merchant to care about whether the buyer is in good faith and whether the money is stolen.

jayd16 5y ago
Just because a computer says it's ok doesn't mean you can just start dealing in stolen goods.
mdoms 5y ago
> if the Bitcoin is stolen that's not the merchant's problem It is if half the transactions at the merchant eventually get refunded. > The whole point of Bitcoin is to eliminate the possibility of chargeback I'm sorry I'm having trouble keeping up with the "the point" of Bitcoin is this week. So it's chargeback avoidance now?
giaour 5y ago
> They are irreversible and if the Bitcoin is stolen that's not the merchant's problem. This seems consistent with the bitcoin ethos but incompatible how the economy and legal system work. If someone buys a physical item from your physical store with a hot check, a stolen credit card, or marked bills that were just stolen from a bank, you don't get to keep the money, even if police aren't able to recover the item you sold. This is normally referred to as being defrauded.
- olalonde 5y ago
  I do believe that you get to keep cash. I don't think I've ever heard of an instance of "dirty cash" getting seized back from a merchant. Do you have an example of that?
  - giaour 5y ago
    No, but I don't really have an example of a specific credit card chargeback, either. At least in the US, the police can seize the cash as evidence, and their duty is to return it to the rightful owner, not whoever happened to have it at the time of seizure.
    - olalonde 5y ago
      There is plenty of evidence that credit card charge backs are a thing, I don't think anyone would challenge their existence. > At least in the US, the police can seize the cash as evidence, and their duty is to return it to the rightful owner, not whoever happened to have it at the time of seizure. They do this with cash found in possession of criminals or suspects but do they do this with third parties not involved in crime? If someone unknowingly sells a car or a house to a criminal, can the cash they received for it be seized? What about legal fees. If a lawyer was found to have been paid with "dirty" money, can the cash be seized? What about cash spent at supermarkets? At the hospital? Etc. I've never heard of such a thing which is why I was asking for an example.
      - giaour 5y ago
        The only concrete example I could find is https://www.nbcnews.com/id/wbna26959902 https://www.nbcnews.com/id/wbna26959902 (though to be fair my research here consisted of checking the references on the Wikipedia page for "Marked Bills"). The important thing to remember here is that possession of stolen goods or cash is a crime (cf for example https://www.law.cornell.edu/uscode/text/18/2315 https://www.law.cornell.edu/uscode/text/18/2315), so if it becomes known to you that stolen cash is in your possession, you have a legal obligation to give it back. Given how fungible cash is, this probably won't be enforced if somebody uses stolen cash to pay their bill in a restaurant, but it probably would be if someone bought a car with cash that could be traced directly back to a bank robbery. Since bitcoin is infinitely more traceable than cash, the argument of "but how do you know this particular dollar bill was stolen?" wouldn't really be applicable.
  - EamonnMR 5y ago
    https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_United_States https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_Unit...
    - olalonde 5y ago
      That is designed to seize cash from criminals not from third parties they bought stuff from.
      - giaour 5y ago
        If the cash is evidence (e.g., marked bills from a bank robbery), then it doesn't matter who is holding it at the time of seizure. This doesn't come up often with cash, but it can: https://www.theatlantic.com/technology/archive/2016/08/how-police-use-a-legal-gray-area-to-rob-suspects-of-their-belongings/495740/ https://www.theatlantic.com/technology/archive/2016/08/how-p...
cuteboy19 5y ago
> The whole point of Bitcoin is to eliminate the possibility of chargebacks This is obviously false. There is absolutely nothing that compels normal payments companies to honor chargebacks. Since you don't need Bitcoin to complete this goal, this goal cannot be Bitcoins purpose. The reason that they do it is because being consumer friendly is more important than being merchant friendly. Even merchants would attest to this fact

by devit 5y ago

jayd16 5y ago

Just because a computer says it's ok doesn't mean you can just start dealing in stolen goods.

mdoms 5y ago

> if the Bitcoin is stolen that's not the merchant's problem It is if half the transactions at the merchant eventually get refunded. > The whole point of Bitcoin is to eliminate the possibility of chargeback I'm sorry I'm having trouble keeping up with the "the point" of Bitcoin is this week. So it's chargeback avoidance now?

giaour 5y ago

> They are irreversible and if the Bitcoin is stolen that's not the merchant's problem. This seems consistent with the bitcoin ethos but incompatible how the economy and legal system work. If someone buys a physical item from your physical store with a hot check, a stolen credit card, or marked bills that were just stolen from a bank, you don't get to keep the money, even if police aren't able to recover the item you sold. This is normally referred to as being defrauded.

olalonde 5y ago
I do believe that you get to keep cash. I don't think I've ever heard of an instance of "dirty cash" getting seized back from a merchant. Do you have an example of that?
- giaour 5y ago
  No, but I don't really have an example of a specific credit card chargeback, either. At least in the US, the police can seize the cash as evidence, and their duty is to return it to the rightful owner, not whoever happened to have it at the time of seizure.
  - olalonde 5y ago
    There is plenty of evidence that credit card charge backs are a thing, I don't think anyone would challenge their existence. > At least in the US, the police can seize the cash as evidence, and their duty is to return it to the rightful owner, not whoever happened to have it at the time of seizure. They do this with cash found in possession of criminals or suspects but do they do this with third parties not involved in crime? If someone unknowingly sells a car or a house to a criminal, can the cash they received for it be seized? What about legal fees. If a lawyer was found to have been paid with "dirty" money, can the cash be seized? What about cash spent at supermarkets? At the hospital? Etc. I've never heard of such a thing which is why I was asking for an example.
    - giaour 5y ago
      The only concrete example I could find is https://www.nbcnews.com/id/wbna26959902 https://www.nbcnews.com/id/wbna26959902 (though to be fair my research here consisted of checking the references on the Wikipedia page for "Marked Bills"). The important thing to remember here is that possession of stolen goods or cash is a crime (cf for example https://www.law.cornell.edu/uscode/text/18/2315 https://www.law.cornell.edu/uscode/text/18/2315), so if it becomes known to you that stolen cash is in your possession, you have a legal obligation to give it back. Given how fungible cash is, this probably won't be enforced if somebody uses stolen cash to pay their bill in a restaurant, but it probably would be if someone bought a car with cash that could be traced directly back to a bank robbery. Since bitcoin is infinitely more traceable than cash, the argument of "but how do you know this particular dollar bill was stolen?" wouldn't really be applicable.
- EamonnMR 5y ago
  https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_United_States https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_Unit...
  - olalonde 5y ago
    That is designed to seize cash from criminals not from third parties they bought stuff from.
    - giaour 5y ago
      If the cash is evidence (e.g., marked bills from a bank robbery), then it doesn't matter who is holding it at the time of seizure. This doesn't come up often with cash, but it can: https://www.theatlantic.com/technology/archive/2016/08/how-police-use-a-legal-gray-area-to-rob-suspects-of-their-belongings/495740/ https://www.theatlantic.com/technology/archive/2016/08/how-p...

cuteboy19 5y ago

> The whole point of Bitcoin is to eliminate the possibility of chargebacks This is obviously false. There is absolutely nothing that compels normal payments companies to honor chargebacks. Since you don't need Bitcoin to complete this goal, this goal cannot be Bitcoins purpose. The reason that they do it is because being consumer friendly is more important than being merchant friendly. Even merchants would attest to this fact