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> The crypto bros totally miss the point in understanding this too. I don't know which "crypto bros" you've been talking to, but as someone who is building a s

• MattRix 4y ago
  Doesn’t using crypto lead to more fraud, not less?
  • rglullis 4y ago
    I am talking from the perspective of the merchant. Imagine bogus chargebacks because of buyer's remorse or purchases done with stolen credit cards. None of this happens for a merchant that accepts crypto.
    • 1270018080 4y ago
      So if you just pretend there's no fraud, then there's no fraud?
      • rglullis 4y ago
        No, what I am saying is that if you reduce the methods for fraud, the cost of dealing with it are lower.
        • 1270018080 4y ago
          Crypto doesn't reduce the methods for fraud.
          • rglullis 4y ago
            How can a customer use a stolen credit card to make payments with crypto? And how does a customer initiate a bogus chargeback on the blockchain?
            • karpierz 4y ago
              If credentials are stolen, crypto or otherwise, a scammer can then use those stolen credentials to make a payment. All non-reversible transactions do is put the risk of fraud on the consumer. IE, if you buy anything with crypto and it turns out to be defective, or just not arrive, you have no recourse. You're just out the money.
              • cowtools 4y ago
                >If credentials are stolen, crypto or otherwise, a scammer can then use those stolen credentials to make a payment. Crypto credentials are not comparable to bank credentials. Crypto credentials are a public key; you still need the secret key in order to authorize a payment. Credentials are insufficient to make a crypto payment. Bank credentials are usually just open-source information that anyone can get a hold of, and they are usually sufficient to make a bank payment.
                • cuteboy19 4y ago
                  No. Cryto credentials are the public and private key both. Losing a credit card credentials is the exact same scenario as losing a private key
                • karpierz 4y ago
                  1) Yes, much like if someone finds your credit card number, they can't use it without your name, CVC code, and zip code. 2) It doesn't matter how secure you make it, because if your payment system is impenetrable, I'll just steal your account on some site where you've already enabled payments.
                  • 4y ago
    • janosdebugs 4y ago
      Just because crypto doesn't offer chargebacks doesn't mean that the customer is not legally entitled to a refund. Depending on the jurisdiction of the merchant and the customer there are a number of scenarios where the merchant is legally obliged to providing a refund. For example, in Germany when a minor makes the purchase, the transaction may be invalid and the merchant has to refund the money.
      • rglullis 4y ago
        If a refund is legitimate, the merchant can go on to void the purchase and initiate a refund. The point is not to have a system of final purchases, but final payments.
        • vorpalhex 4y ago
          I sue you. The court demands you appear and return the payment. The Merchant says "No! This was crypto! No give backsies". The Merchant will discover that the state does in fact have finality on the movement of value.
          • rglullis 4y ago
            The payment was final. The purchase was not. The refund is another payment. "But the state can still compel you to pay back". Yes, sure it does. The point is that the cost of doing it now is much higher and it is enough to deter a lot of opportunistic, fraudulent behavior from consumers. This difference in cost can make or break a business.
            • TheOtherHobbes 4y ago
              It also encourages a lot of opportunistic, fraudulent behaviour from merchants, because the cost of perpetrating fraud is lowered. So you end up with a system that most people won't touch, and only appeals to users who need to make shady transactions. In which case they may just as well leave out the middle merchant and exchange crypto directly.
    • gingerlime 4y ago
      Or 3DSecure which is becoming very common in Europe. No chargebacks.
      • rglullis 4y ago
        3Dsecure helps against criminals try to use the card and makes it harder for customers flag a transaction if they have provided the authorization code. It helps, but does not prevent chargebacks. If you are selling digital goods, a malicious customer could, e.g, make the payment, access the download page of the product and then file a chargeback saying the received product does not match what was advertised.
        • TheOtherHobbes 4y ago
          Many digital merchants in the EU have a rights waiver box to eliminate this kind of opportunism.
          • rglullis 4y ago
            There is a whole other world of people who do not live in the EU.
        • gingerlime 4y ago
          That’s covered by the right of withdrawal, and is handled between the customer and merchant. But they cannot chargeback but can get a refund. The idea that crypto solves fraud is laughable, particularly when so much fraud is facilitated by it.
    • luma 4y ago
      From the point of view of the merchant, crypto is riddled with fraud: https://www.pcgamer.com/50-of-transactions-were-fraudulent-when-steam-accepted-bitcoin-for-payments-says-gabe-newell/ https://www.pcgamer.com/50-of-transactions-were-fraudulent-w... If crypto truly solved all the problems you claim it solves, I think it’s reasonable for the major online marketplaces and vendors to have already switched over. I’ll note that they haven’t, and the state of the overall crypto market in the past few weeks suggests one good reason why.
      • rglullis 4y ago
        I'd really like that more information was provided in the article. What is he counting as a "fraudulent transaction"? > If crypto truly solved all the problems (...) vendors would have already switched over. Transaction fees are not solved yet. UX is not solved yet. Privacy is not solved yet. (Well, it is if you count Monero, but for commerce you need a stabletoken, and you can not easily build a stabletoken on Monero like you can do it in Ethereum. In Ethereum we can have the stabletokens and privacy solutions are being built) On-ramping is getting solved: it's relatively easy to get fiat-to-crypto today, though I'd say that the current players charging 3% are already at the limit of how they can go, and it's still too high. There are still plenty of challenges and things to work on to get crypto as a viable alternative for payment networks. > the state of the overall crypto market The troubles in the current market have little-to-no relation with the story about crypto for payments. If this crash is going to get us rid of the stupid fools gambling their money in "investment opportunities" and it wipes out the nefarious scumbags who were selling ridiculous promises, all the better.
        • luma 4y ago
          It has a lot to do with crypto for payments if the vendor has to deal with massive swings in value over very short time frames. The solution that most vendors wind up with is getting their crypto exchanged for not-crypto ASAP, which is useful solution but not much of an endorsement for having accepted crypto in the first place.
          • 4y ago
• munificent 4y ago
  > it eliminates the chance of fraud Declaring a priori that all transactions are legitimate doesn't eliminate fraud, it just eliminates the system's ability to handle it. Actual humans can still get victimized. The gateway just says "Lalala can't hear you not my problem." > and it moves the cost of customer support to the merchant. Likewise, it moves the consequences of fraud onto the victim. > for the cases where the cost of existing processors make the transaction not viable. I assume you realize what kind of transactions end up being nonviable for existing processors that do have fraud prevention, money laundering safeguards. Your site says: > When you receive a payment, the money is yours. No hold-out periods, no chargebacks, no forced refunds. Read that from the perspective of a bad actor. That's exactly the kind of payment gateway they would want. No way for a victim to seek redress once they've sent their money. You seem to be targeting merchants that: 1. Don't want customers to be able to seek any redress when fraud occurs. 2. Are willing to deal with the overhead of customer support in order to get 1. Hell, your site actually advertises "No KYC" as a feature! OK, so, yes, you do seem to be deliberately building a system targeting ransomware, drugs, scams, and money-laundering.
  • npc12345 4y ago
    Try zelleing a scammer, call the bank, then get back to us buddy.
    • pixl97 4y ago
      That's why you don't.
  • rglullis 4y ago
    You are thinking only from the side of a customer, who already has it easy with the existing payment networks. If you are a customer that wants to make a transaction that can be reversed, you go for the credit card. If the value of the transaction is not high enough for you to care (micropayments) or if you rather lose some money but not give away your data, you go for crypto. The problem that crypto can solve is for the merchants, like TFA. Patreon charges absurd rates because payers are problematic. (Edit: once again, the anti-crypto crowd decides to downvote reflexively and ignore everyone that brings legitimate use cases. Why is it so hard to at the very least consider the point that others are trying to make?)
• CJefferson 4y ago
  You can still have fraud, can't you still get sued to return someone's tokens?
  • gruez 4y ago
    I doubt the kind of person who's initiating chargebacks on patreon donations is going to go to small claims court to claw back their $10 donation.
• mgraczyk 4y ago
  As somebody who also built a crypto startup that facilitated payments (opentoken.com), crypto does not eliminate fraud. Merchants want fraud protection, they don't know how to handle it and aren't interested in taking on that business. You will end up either handling fraud in the payment layer, or your merchants will find somebody who will.
  • deleted 4y ago
    [deleted]
• rollcat 4y ago
  > Crypto is meant to be an alternative for the cases where the cost of existing processors make the transaction not viable. Allow me to quote myself: using proof of work in place of CC processor fees is just moving the problem around - and arguably, making it worse: you're essentially taking on environmental debt, which all of us will eventually have to pay down.
  • rglullis 4y ago
    Ethereum is moving to PoS in less than two months. Can we please drop this BS excuse of an argument? (Before you reply with the usual "Ethereum devs have been promising PoS for years" line, I will tell you this: I pledge to drop all work on Hub20 if Ethereum doesn't complete the transition by the end of the year.)
    • lalopalota 4y ago
      How is this a "BS excuse of an argument"? Is proof of work being used?? Hmmm, yes it is. Thus, the argument stands.
      • rglullis 4y ago
        > Is proof of work being used? Not for all blockchains. If that is the point of contention in regards to crypto, then just look at the many other blockchains that do not use PoW.
      • unity1001 4y ago
        Environmental cost is a BS argument because nobody talks about the environmental cost of the already existing technologies that they are using. Everything we plug into power in our houses comes from the same power sources which the crypto miners also use. They dont come from elsewhere. So there is no difference in between using an electric car and crypto in that regard - you are still using carbon-producing energy. All energy needs to be green. Crypto, EV, gaming, this or that technology or application of technology cannot be targeted specifically.
• jasonlotito 4y ago
  The belief that crypto eliminates fraud is pure myth. It dramatically increase the chance of fraud for customers, and for honest merchants, there is still a risk of fraud.