11 ms·

Any time you're in the position of moving money from one person to another with credit cards, you're in extreme risk. Your service becomes the perfect fraud ta

by moxie 14y ago

Any time you're in the position of moving money from one person to another with credit cards, you're in extreme risk. Your service becomes the perfect fraud target, because an attacker can essentially use your service to withdraw cash from stolen credit card numbers (set up two accounts, "tip" one from the other, repeat). Once the owner of the CC realizes that its been stolen, the CC company will issue a chargeback. If the money has already been withdrawn by the attacker, you lose. Chargebacks can happen three or four months from the date of the charge, so there's no way to effectively "hold" the charge for that long before allowing users to withdraw their money. BTC, on the other hand, is an irrevocable transaction.

tejaswiy 14y ago
But still, stolen credit cards == compromised bitcoin private keys right?
- Retric 14y ago
  compromised bi-coin private key ~= lost cash. If you look into it the only thing bit coins have going for them is pseudo anonymity. You can't use them for vending machines as you can revoke transactions in the short them and nobody want's to wait 20 minutes for there soda with the same problem showing up on any fast transaction. You also have no protection vs a lost wallet.
  - MacsHeadroom 14y ago
    The likelihood of people double-spending against vending machines is very low. There is no reason a well placed vending machine could not give out cheap items without verification. Sure, don't put your vending machine in the ghetto. But an upscale mall should be fine.
    - diminoten 14y ago
      If I were the enterprising lawless sort, and bitcoin vending machines did let me double-spend, that's precisely what I would do.
- indrax 14y ago
  But you try to keep your private keys private, and give your credit card info to every business you pay.
- yk 14y ago
  No. To 'steal' [1] a credit card, all you need is the information you get if you check the credit card in a legitimate transaction. ( Credit cards unfortunately predate public key crypto.) So a stolen credit card is actually similar to a compromised public key. [1] actually copy
- moxie 14y ago
  The question is who's liable when the theft occurs. In the CC world, the liable party isn't the card holder or the CC company, but the merchant. Chargebacks make services where money is transferred from one person to another extremely difficult to operate. Your service will be eaten alive by fraud unless you invest heavily in fraud detection, ratchet it up to the max, and hope that you have the volume to cover the attacks that still slip through. This is, in part, the recipe that leads everyone to hate PayPal. In the BTC world, however, there is no risk to the service. There's no need for a fraudster to even use the service: if they've stolen someone's BTC private key, they already have the money.

by moxie 14y ago

tejaswiy 14y ago

But still, stolen credit cards == compromised bitcoin private keys right?

Retric 14y ago
compromised bi-coin private key ~= lost cash. If you look into it the only thing bit coins have going for them is pseudo anonymity. You can't use them for vending machines as you can revoke transactions in the short them and nobody want's to wait 20 minutes for there soda with the same problem showing up on any fast transaction. You also have no protection vs a lost wallet.
- MacsHeadroom 14y ago
  The likelihood of people double-spending against vending machines is very low. There is no reason a well placed vending machine could not give out cheap items without verification. Sure, don't put your vending machine in the ghetto. But an upscale mall should be fine.
  - diminoten 14y ago
    If I were the enterprising lawless sort, and bitcoin vending machines did let me double-spend, that's precisely what I would do.
indrax 14y ago
But you try to keep your private keys private, and give your credit card info to every business you pay.
yk 14y ago
No. To 'steal' [1] a credit card, all you need is the information you get if you check the credit card in a legitimate transaction. ( Credit cards unfortunately predate public key crypto.) So a stolen credit card is actually similar to a compromised public key. [1] actually copy
moxie 14y ago
The question is who's liable when the theft occurs. In the CC world, the liable party isn't the card holder or the CC company, but the merchant. Chargebacks make services where money is transferred from one person to another extremely difficult to operate. Your service will be eaten alive by fraud unless you invest heavily in fraud detection, ratchet it up to the max, and hope that you have the volume to cover the attacks that still slip through. This is, in part, the recipe that leads everyone to hate PayPal. In the BTC world, however, there is no risk to the service. There's no need for a fraudster to even use the service: if they've stolen someone's BTC private key, they already have the money.