> no chargebacks just means the customer now has no recourse from a fraudulent vendor.
This is the realm of the social layer, not the technology. You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.
> It's also possible to get no fees for micropayments
Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).
> and no currency conversion fees with a more traditional virtual currency, crypto only adds costs on top of that.
Problem statement: you are a software company in the UK and you want to contract a developer based in Argentina. She wants to receive (in Pesos) the equivalent to 500GBP.
Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.
>You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.
I don't understand how this follows at all, the only thing you've added here is that you can't get your money back if the "cheap and fast content" turns out to be a scam. I can't understand why anyone would want this to be optional.
>Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).
This would be any virtual currency where you buy it to spend directly with the market operator, the kind you see on prepaid cards in retail stores. That's in the context of a vendor like OnlyFans that runs a marketplace of sorts; if you consider that to be a middleman and you only want some completely peer-to-peer solution then that's a different question with different risks from what we were originally discussing, and most cryptocurrency doesn't fit that definition anyway.
>Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.
I'm not really interested to search around for every exchange I can find and make a comparison, but I would be very skeptical of any crypto-based solution claiming they can lower fees here. The costs of doing bank transfers are the same regardless of whether you use crypto as the medium to move the money. There's probably something else they're doing.
This is getting towards my main problem with these crypto conversations, we're moving away from what the technology actually brings and instead we're getting into only comparing fees without considering any of the other details of what we're actually doing. I find this to be a pointless angle to take; there isn't going to be a period where we use cryptocurrency and we can totally avoid fees, because an explicit goal of every cryptocurrency I've seen is actually to make it so participants can't avoid paying fees. And when you get into smart contracts, every participant can now start acting as a middleman and charging more of their own fees in addition to the transaction and gas costs you pay to the network.
> There are no ways of accepting payments digitally without a third party.
1- I agree. Bitcoin is no exception here: I must buy Bitcoin through GDAX. Then my transaction must be confirmed by Bitmain. And they're all running software by Blockstream. That's 3 third parties that were trusted for my purchase.
2- 0-conf transactions are very risky for recipients, hence why exchanges require confirmations.
3- Credit card chargebacks is how the real world solved the fraud problem in the featured article. Can you please provide an equivalent article showing how businesses are suffering due to chargebacks?
> real problems that people do face, such as a vendor not providing you the goods or services that you paid for, are still a problem with blockchain.
Not just still a problem. Far worse off a problem. Chargebacks exist for credit cards and most bank transactions including wired funds. Send the crypto the wrong way at the wrong time or to the wrong place? Poof. Bye bye money.
> Why would they? It's more expensive and more risky to offer it.
How? Risky? When the customer has literally zero way of doing a chargeback? And most businesses instantly transfer the received amount to cash, so there is no wallet complication.
> Sellers don't want it because it exposes them to enormous FOREX risk.
No, because the time they actually hold crypto is measured in seconds to fractions of them.
A streamer I watch allows you to donate with crypto and buy food for people. The Paypal way gives you less resulting money to buy food for people with because of tx fees. Crypto for them is safer and cheaper.
> In Germany no tax liability is incurred AFAIK when using it as currency.
I wish. You have to hold for 1 year, then whatever you do is tax-free. Before that, anything you do (incl. trading) counts for your income tax.
And FWIW, a) I don't buy anything with BTC, if anything I'd pay with ETH, Nano or any of the alts that have fast and cheap TXs but I'd buy things with a CC anyway because I find it too be simpler. b) Where I work the best tx fee we can get for CC Payment for 10€ is 0.395€
> Either crypto or credit card, if you end up taking a payment via stolen credentials, you will refund the money.
This by itself shows that you are making a fundamental confusion: crypto is not to be compared with credit cards. crypto is meant to be cash.
Anyone that steals crypto will wash it before attempting to spend it. And depending on the network, you can't even know what is the origin. So, it would be the same as being robbed of cash.
But okay, let's move on.
> If your margin is slim, you've just amplified your fraud risk.
What if my margin is infinite? Say I want to sell digital goods, with an effective unit cost of zero. Why would I want to worry about the 1/1000 chance of someone "stealing" a copy, when that cost is nothing compared with credit card processor fees and the only thing I am trying to avoid is being hit with chargeback fees?
> wait until crypto becomes common
Crypto becoming common does not mean that people should be keeping large amounts in their wallets. A wallet is not a bank account.
Even those crazy enough to keep substantial amounts of funds in crypto would have (at least) two separate set of keys. One to use for their "hot wallet" and one for cold storage. This is almost basic practice. In a world where crypto "becomes common", what could happen is that your "bank" would be a service that is responsible (and properly paid) to be a trusted custodian of larger funds.
> accepting a credit card transaction is equivalent to accepting a zero-confirmation cryptocurrency transaction, which is just as fast as a CC charge (instantaneous.)
Except my charge is guaranteed to happen (or be rejected) within a reasonable amount of time. If you scale up anything to the size of, say, Visa, the transaction times are going to grow to be unbounded. I know my credit card charges are going to settle in about a day. There's no guarantee when the miners will work through the backlog of transactions and actually give me my money in any time frame.
If you're a small business, this matters a LOT.
> Average remittance fees are around $7 per $100 sent. Meanwhile Ethereum has fees typically under $0.50 per tx
My bank charged me $10 to send a 50k wire transfer last week. What service, exactly, is more expensive than a 7% fee?
Ethereum, meanwhile, swings in price violently enough that in the time it takes for an ACH transfer to complete, the value could have shifted enough to negate the entire savings on fees. What benefit does low fees have on a currency if the currency is worth 5-10% more or less day to day?
There's no reason to assume a government issued cryptocurrency will be any less volatile than cryptocurrency.
> There have been proposals to implement what we call UTXO commitment sets, which is basically a way to revamp a blockchain so that it can discard old transactions and just keep track of current balances.
And here we are, talking about creating a new legal tender for the second largest economy on the planet. As I said in my original post, it doesn't matter if it's on its way. Speculative fixes for a real problem don't make the problem go away. Major cryptocurrencies currently don't do it, so we shouldn't talk about them as if they do.
Even still, the number of balances will grow over time. Unlike a real bank, you can't just close an account when someone dies. Anyone can create as many balances as they want. And losing your private key means there's a permanent record of the money you lost.
>Cryptocurrency makes chargeback fraud impossible insofar as the attacker cannot conduct a 51% attack or a finney attack.
>As for merchant fraud, users are expected to establish business relationships with trustworthy vendors and hold them accountable themselves. If these trust networks work for the DN and private trackers, then it's secure enough for me.
My brother-in-Christ, how are you supposed to achieve mass adoption when you list *as a benefit* that you are stacking the deck in favour of the merchant?
> Can anyone give a reasoned argument to the actual benefits of Web 3, in contrast to what is currently not possible without the use of a Blockchain?
Yeah. Why not try donating to NGOs through a bank account if your friend or penpal happens to be stuck in a sanctioned country? [0]
I also don't think merchants and businesses would like to tolerate the knowingly abused chargeback system which friendly fraud hurts both the customer and the merchants.
Cryptocurrencies completely eliminate that abuse. The user can contact the merchant for a refund instead of filing a costly dispute which the final decision always sides with the banks, who doesn't even know if it is friendly fraud or not, but takes the money anyway.
I can see them using it for Stripe or Coinbase Commerce.
What is with the attitude you have? I wasn't going on about anything, really. You brought up transaction times which are related to confirmation times. Anything other than bitcoin is molasses-like.
> You can make a digital transaction without trusting anyone, especially the other party.
Well you would need to trust the other party to get something in return, unless you're giving it away. The big part is making a transaction without trusting a 3rd party.
> Mainly transaction speed is super slow (10m to confirm a transaction went through)
It depends on how large your transactions are. If you buy a car for example you want to wait for more, maybe 6, confirmations while if you pay for coffee you can use a coin where zero-conf (basically instant) transactions can be considered okay.
Put that with the context that VISA has a settlement time of around 30 days.
> and transaction fees are very high (especially now with the "bubble", it's something above 10$/transaction)
Only for the crippled coin Bitcoin. Bitcoin Cash could for example easily handle all Bitcoin's transactions for pennies.
> (Fast payment, relative privacy, low transaction fees), with the further benefit of chargebacks. If someone steals money from your Bitcoin wallet, you're screwed, with a credit card you phone them up and they undo it.
If you're a business chargebacks are actually an anti feature. Chargeback fraud is a very real and very common occurrance.
> Actually, even with Bitcoin you need to trust a third party: the exchange.
Only if you use it to enter/exit with fiat.
> IMO a real bank or credit card processor is more trust worthy than a crypto exchange.
Absolutely. That's why it's recommended to hold your coins yourself and don't leave it on any exchange. Of course they could become more trustworthy as time goes on.
> That's all to say that currently crypto makes no sense for real transactions
Except I have used it successfully several times to buy stuff. It's also much better than any alternatives for donations (where for example PayPal cannot freeze the funds) or remittance to far away/difficult locations.
> As well, other uses may be valid, the main case is "a hold of value", like gold.
I find that stupid though.
> IMO, crypto has no intrinsic value (not even decorative like gold) and is very volotile, so it's up to you to decide whether it's going to last.
The value is transactions without a 3rd party and it's very hard to reverse already made transactions. There's no need to have any physical value.
> I reduced a portion of my ecommerce store checkout fees to <1% by using a crypto payment processor > stripe's highway robbery of 3% per sale.
This is misleading because it moves all of the costs to other transactions: Your users have to get their money into exchanges (credit card fees occur here if using a card), buy the cryptocurrency (exchange fees), transfer it to you (transaction fees), and then you need to transfer the cryptocurrency somewhere else (more transaction fees), and exchange it back to another currency (more exchange fees).
It ends up being far, far more expensive than Stripe’s checkout payments. It’s just misleading because the expenses are spread out across so many different touch points.
> There's literally no sense in buying anything with crypto when you have to give up the protection that you have as a consumer : chargebacks.
This is the same 'protection' that is open to abuse by users through chargeback fraud or 'friendly fraud' on both Stripe and PayPal in which the merchants will get chargeback fees and their accounts getting closed with tons of fraudulent chargebacks by users, having to fight fraudulent disputes and waiting months for the money to be unlocked by Stripe or PayPal.
> I can ask 1000 people here that i meet and no one will know about USDC on stellar. That won't change either.
This is the problem. Here. on HN. Even when they still care to continue to ask more cryptocurrency questions. Like yourself.
Were you the same person that asked about whether if users on HN knew about cryptocurrencies in 2011? Or if you were to ask a generation born in 1910 if they know about how to use the world wide web in 1990?
This is exactly the same thing here. You and many others have made it clear that you won't use it. The next generation certainly will. Perhaps this is why several HNers are somewhat out of touch of recent trends these days.
> You should ask HN if there is any business owner that cares, lol.
I don't need to, the interest speaks for itself. For example on the front page of HN 31st of December 2021:
Decent (YC W22) Is Hiring a Senior Full Stack Web3 Engineer
You are going to see more of this, like it or not. Are you ready to move the goal posts once again?
> netflix debits my credit card every month, why would I use a cryptocurrency solution instead?
Presumably you trust Netflix enough to give them your credit card details, and you trust your credit card company enough to pay them when they present you with a list of transactions they claim you made.
That's fine for such big, entrenched players; presumably you wouldn't put as much trust in some unknown, anonymous online entity. (Although presumably trust in Ethereum isn't exactly high right now)
> As a buyer, why would I use bitcoin internationally when I can't reverse my transaction if they don't deliver?
Sometimes reversibility just doesn't matter. The merchant might be 100% trustworthy (like Amazon). Or as another example I once rented a VPS for a month from Russia. I paid in bitcoins because it was $3 or $4 so I simply didn't care if the VPS provider didn't deliver (submitting a chargeback request for such a low amount is not worth my time), but at the same time I didn't fully trust the merchant with my credit card info (how securely do they protect/encrypt it? could they be hacked? etc).
> Since we don't gift each other bitcoins, Example 3 isn't a problem.
You completely avoided the main point of my example #3. And that's very stupid for you to say this. I gave some to my family, I could say this proves you wrong. Even Coinbase set up a page to give bitcoins last Christmas because it's common for enthusiasts to give some to friends & family: http://blog.coinbase.com/post/105032873402/give-the-gift-of-...
> Example 4 is laughable because in the last week, four Bitcoin exchanges were hacked (or robbed by the owners - still TBD) and people who had their coins in those exchanges lost it all.
This is completely irrelevant to example #4. My point was that a Bitcoin transaction cryptographically authorizes only the transfer of a specific amount to a specific address, and nothing else. In contrast a CC transaction lets a fraudulent merchant place any charge for any amount at any time. This is a substantial undeniable security advantage that Bitcoin has over credit cards.
> Skimming CC numbers is for sure an issue for credit cards, but as someone who has had their credit card skimmed, my issuer locked my account within 2 hours of fraudulent activity, called me, and eventually gave me my money back.
You were lucky. But your cute story doesn't mean credit card fraud is a solved problem. In many cases the customer has NO RECOURSE for fraud. For example you cannot chargeback a transaction made more than 60 days ago. Some fraudulent merchants pretend to act legitimately but stall shipping (eg. claim delays, issues, etc) for 60 days specifically to exploit this fact and exploit the fact customers don't know about this condition. Or if your PIN code is stolen and a fraudulent transaction is made with the PIN code, you will typically be held liable (check your credit card issuer's fine print, for example: http://www.scotiabank.com/ca/common/pdf/borrowing/revolving_...)
> How many Mt. Gox users got their money back?
Give your money to a fraudster and he will run away with it, no matter if its bitcoins or dollars. How much money was permanently lost to the Bernard Madoff ponzi scheme?
This is the realm of the social layer, not the technology. You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.
> It's also possible to get no fees for micropayments
Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).
> and no currency conversion fees with a more traditional virtual currency, crypto only adds costs on top of that.
Problem statement: you are a software company in the UK and you want to contract a developer based in Argentina. She wants to receive (in Pesos) the equivalent to 500GBP.
Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.
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