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That's not how the credit card system works. The merchant first makes an "Authorization" which is a promise by the credit card company to pay the merchant that

That's not how the credit card system works. The merchant first makes an "Authorization" which is a promise by the credit card company to pay the merchant that amount of money within the next 90 days. When they make that promise, they check the customer's account to verify that there are enough funds and then deduct that amount from the available funds. Assuming everything else goes as expected, the merchant then issues a "Capture" which finalizes the transaction, and they receive the funds once settled (within 24 hours). If the CC # details were stolen or the customers otherwise feels that it was a fraudulent transaction, they can call up the bank who will do what's called a "chargeback" and take the money back from the merchant plus a $25 "fuck you" fee. Fraud rates are expected to be less than 1%, if they get higher than that you get in trouble as a merchant. But the thing that's absolutely not happening is blind shipping of goods or delivery of electronic goods with a guess that the customer will probably pay, even below any amount.

erikpukinskis 14y ago
So, basically what you're saying is: Bitcoin: * funds transfer: instant * fraud vulnerability window: 1 hour * fraud exposure: reversal of transaction Credit card: * funds transfer: 24 hours * fraud vulnerability window: 60 days * fraud exposure: reversal of transaction + $25
- taligent 14y ago
  The funds transfer/settlement for credit cards can be as short as a few hours as some banks offer same day settlement. And you are being a bit disingenuous with the fraud vulnerability window as chargebacks allow for dispute resolution e.g. where is the item I paid for whilst Bitcoins don't.
- drusenko 14y ago
  I think you're seriously missing the point. This whole discussion has been about the fact that bitcoin funds transfer isn't instant, it takes 10 minutes. With credit cards, regardless of when the funds transfer happens, you're given a guarantee instantly. That's what really matters so you can deliver goods. And while a shorter "fraud vulnerability" window is good for the merchant, it's terrible for the consumer. People have come to expect that they can get their money back if they get scammed or get their CC details stolen, it's a huge part of what's attractive about credit cards vs. cash. Would you carry $50,000 in cash on your person? No. But you wouldn't mind carrying a credit card with a $50k balance on you, because you know you're protected.

erikpukinskis 14y ago

So, basically what you're saying is: Bitcoin: * funds transfer: instant * fraud vulnerability window: 1 hour * fraud exposure: reversal of transaction Credit card: * funds transfer: 24 hours * fraud vulnerability window: 60 days * fraud exposure: reversal of transaction + $25

taligent 14y ago
The funds transfer/settlement for credit cards can be as short as a few hours as some banks offer same day settlement. And you are being a bit disingenuous with the fraud vulnerability window as chargebacks allow for dispute resolution e.g. where is the item I paid for whilst Bitcoins don't.
drusenko 14y ago
I think you're seriously missing the point. This whole discussion has been about the fact that bitcoin funds transfer isn't instant, it takes 10 minutes. With credit cards, regardless of when the funds transfer happens, you're given a guarantee instantly. That's what really matters so you can deliver goods. And while a shorter "fraud vulnerability" window is good for the merchant, it's terrible for the consumer. People have come to expect that they can get their money back if they get scammed or get their CC details stolen, it's a huge part of what's attractive about credit cards vs. cash. Would you carry $50,000 in cash on your person? No. But you wouldn't mind carrying a credit card with a $50k balance on you, because you know you're protected.