1) This is precisely what you get from EMV transactions. A cryptogram covering these details, signed by your hardware token (card). Online transactions don't do this, it's true, but that's why we have the verified-by-visa type stuff. It's imperfect, I agree.
2) Chargebacks are still necessary, because it's not just about merchant overcharging or unauthorised transactions, it's about what happens when someone fails to ship, or sends you broken goods etc
A significant number of sites also use stripe, which produces merchant specific revocable tokens. This doesn’t eliminate merchant fraud risk, but it does vastly reduce the risk of your CC details being leaked.
On the merchant not delivering, I think this is really wrong. If you have a conflict with a merchant, I appreciate that reversing the payment is a convenient way to apply pressure but I think is not the fair way to do it. It should be legal process really (if it ever gets that far).
With EMV transactions this is the case. I'd like to see the system of home card-readers spread, though it would add friction to online purchases.
> On the merchant not delivering, I think this is really wrong.
It's not only a perfectly fair way of doing it (if the merchant wishes to dispute it they can go to the courts), it's often the only way to do it, as merchants often disappear or make themselves uncontactable, or may feel no need to comply with legal process in the purchaser's country of origin.
We have thousands of years of history of merchants ripping off consumers - "Caveat Emptor" for example. This is a measure to prevent the worst of it, and it creates a much safer market. Without it many people would just not transact with new entrants to the market, if at all.
Your mobile could be stolen with your cryptowallet inside and you could do a remote wipe of the device. You can also use multi-signature protections for large transactions, etc.
So long as the cryptocurrency hasn't gone already. If it has.. well whoops, bye bye money.
Likewise, if you hold some bank notes in your wallet next to your credit card, an attack will deprive you or your money. The bank might cover any charges made on the card pending some admin and police work. For that service you pay a fee to the bank.
Losing all the cash deposits I have would be so much worse, which is why I do business with a FDIC insured bank that will protect me against some contingencies, including account takeovers. Bitcoin offers me significantly less protection than my current setup, and would require far more mental effort to maintain my security.
Nice diversionary tactic there.
This was the comment I replied to. It says money and I'm talking about money.
Bank cards represent account holdership, not money. Losing a card entitles you to get a new one for a small charge. Your bank held funds are protected by law, and you can expect somewhere between 75% and 100% of your assets being covered from fraud.
You said - "Your card being stolen has nothing to do with chargebacks. Your mobile could be stolen with your cryptowallet inside and you could do a remote wipe of the device."
You do this in order to try to establish cryptocurrency as being as secure in that situation as a credit card, i.e. theft resilient. I pointed out that if the cryptocurrency was already used, unlike with a credit card, you're unlikely ever to be able to recover the money. Then you started handwaving about cash. This appears to me to be a disingenuous move of the goalposts.
I'm comfortable with what I wrote though. Bank cards don't represent money and the management framework that allows for chargebacks is unrelated to the card itself, it's law.
I've clarified what I think is a consistent view, and no goalposts are being moved when I point out that cryptocurrencies == money but bank cards != money.
If bitcoin does not offer these features, I cannot imagine it ever taking off as a currency (as compared to a speculative instrument, which is what it is now).
The thing is, Bitcoin or Ethereum are technologies and the protections and guarantees the "masses" will look for are not provided at protocol level, this is where entrepreneurs step up and offer services based off these technologies.
Also importantly, there are functions a bank can provide that you don't need however there's no way of you avoiding paying for it somehow. A crypto based bank could very well be a legal custodian for key material, an identity provider and a lender... it could also be a mashup of several services/protocols that do each of those functions.
Backing banks in a different currency than you actually purchase goods in is like declaring that all transfers must be accomplished in Yen. Why should I expose my rent payment to an exchange rate?
One might argue that we’d just use bitcoin as our currency, but that’s just begging the question. Why should consumers want to switch away from their regular currency?
There’s also no compelling reason why identity providing should:
1. Be done by your bank.
2. Use the same technology as your currency.
Long story short: listing a bunch of things you can technically accomplish with bitcoin is emphatically not the same as providing reasons why bitcoin should take over. It’s a bit like hand stand walking; it’s an impressive trick, but just because you can do it doesn’t mean it should become your regular mode of locomotion.
The role of banks as identity providers exists today, you need a bank account to access certain services. Banks actually make for great KYC providers. I don't understand how you don't know this but still want to have a discussion on this topic...
I also have never seen anyone else verify my ID with my bank. I have seen them verify income, but that’s not surprising since that’s where I store my money. When someone demands to know who I am, they usually require my drivers license, passport, or SSN, none of which are bank issued.
And again, consumers send money all the time, using banks and other regular financial institutions. If they couldn’t send money, the economy would have ground to a halt.
So again: why should I want to switch to bitcoin, or have my bank built on bitcoin? It’s perfectly reasonable to say that banks are going to make protocol changes under the hood to make things smoother, that happens all the time. But to say we’re going to use a whole new currency needs justification to the end users who will notice the change.
What really gets to me is how uninformed you are and how strongly you manifest your opinions..
https://www.google.com/search?q=banks+as+identity+providers&...
What those high fees really come from is the need to cover the cost of all those rewards programs that are so ubiquitous in some countries such as the USA. Those would probably disappear pretty quickly in the presence of a law allowing merchants to add any processing fees (perhaps above some nominal baseline cost) on to the bill. 1% cash back doesn't seem like nearly so great a deal when you have to reckon with the fact that what's really going on is that you pay 2% more, and then the issuing bank gives half of it back to you, along with a generous dose of smoke up the ass, and then pockets the other half.
This!! So much. The status quo amounts to price manipulation that harms the market and is utter B.S.
Item 8 from http://donellameadows.org/archives/leverage-points-places-to...
There was a time from 2013 to 2017 that merchants were permitted by processing agreement to do it, but Visa and Mastercard convinced an appeals court to throw it out. A few places in my state still do surcharges, but it's pretty rare.
Can you point me to any cheaper solutions?
I like the idea of having the processing fees displayed prominently on the receipt though (like VAT). If people had to actually pay more to use Amex (rather than the merchant absorbing the blow, or distributing the costs across their other customers), then they might quickly go out of business (and rightly so).
Obviously. They need to pay 0.2%-0.3% to the issuer (ie. the bank that gives you your card), but VISA/MasterCard and the processor want their cut as well.
> Can you point me to any cheaper solutions?
At least in Germany there are quite some cheap POS solutions:
0.69% for Visa/MasterCard:
https://translate.google.de/translate?hl=de&sl=de&tl=en&u=ht...
0.98% for Visa/MasterCard:
https://translate.google.de/translate?hl=de&sl=de&tl=en&u=ht...
You've swapped cause and effect here. It's the other way around.
High fees lead to rewards programs.
(This was back when non-rewards cards were the regular variety, so I'm assuming things have changed since then.)
Bitcoin is piss poor cash, given the wild exchange rate swings and the ability for it to be stolen online. It literally has no property that I desire.
Agree, but I'm not promoting Bitcoin, I think it's poorly designed by someone who doesn't understand the properties of good money. Another crytpo with better properties will supersede it. It's the idea of crypto that's great, not the particular implementation of that idea called Bitcoin.
Once you know an trust a vendor, paying with cash will eventually be a few percent cheaper just as it often is as brick and mortar places sometimes when they offer cash discounts because they too don't like the fees the cards companies force on them.
It's not an either or scenario, it's a both scenario; you should have the option of cash or credit online, just like you do in the real world.
Maybe in the world of the wealthy.
Largeness is relative. The counter to your argument is that widespread use of existing payment methods means the market prefers them.
That's not a valid argument. The market always prefers what "is" until a critical mass understands benefits of a new technology. The existing credit system was not designed for today's world, is pull based, and is rife with fraud on both the merchant and the consumer side. Merchants absolutely despise credit cards, we can't wait for something better to be invented.
The market preferred horses when cars were first invented; it takes time for new technology to penetrate. Internet cash will be a thing, Bitcoin might not be the successful implementation of that thing, but that thing's time will come.
Credit card companies are despised by merchants.
It of course doesn’t mean that things will remain this way forever. Credit cards have risen to prominence within living memory, there’s no reason why this has to remain. But it also means that if you expect something to replace credit cards, it must overcome both consumer preference and comfort, as well as all the advantages that the incumbents have.
As an aside, we have internet money. They’re called credit cards and debit cards, and we all use them daily to purchase ludicrous amounts of goods and services online and offline. What I have yet to see is an actual explanation for how any proposed “internet money” is superior to my Visa without relying on any ideological claims.
It absolutely is not when you're discussing a new technology most consumers don't understand yet or have never used.
> unless if you’re going to allege fraud or assert that everyone is dumb.
False dichotomy, it's a new technology, most people simply haven't had the chance to use it yet and don't understand it yet.
> As an aside, we have internet money. They’re called credit cards and debit cards
Those aren't the money I'm referring to, those are 3rd party verified trust you'll get paid systems, money is cash, and doesn't require a 3rd party to be trusted to pay you.
> What I have yet to see is an actual explanation for how any proposed “internet money” is superior to my Visa without relying on any ideological claims.
It's pretty simple, the same reasons you might want to use cash in the real world rather than credit. When you pay for something with cash, you're not at risk of that vendor taking more than you give him, you don't have to trust him. When you give a vendor a credit card, you're always at risk of fraud, a debit card... you might lose all your cash and you can't dispute those charges, it's not a credit card. Both of those also require the 3rd party to profit, so they charge extra fees. Cash typically has no extra fees (internet cash will, but they should be way lower than cc fees).
Beyond that, you need to step outside yourself a bit and be aware of your privilege, much of the world doesn't have access to credit cards and debit cards or even banks. Internet cash is a way for them to join the online world. If you can't get past your first world privilege, you'll never understand.
There's no ideology here, I don't think Bitcoin is the right mix of features for a good Internet cash, but Internet cash will come.
But, that doesn't really solve the problem, it merely pushes things around a bit. It's insufficient to say "credit cards aren't universally loved", because that does not imply that Bitcoin is the correct choice anywhere. It's perfectly possible that the local alternatives to CCs in other nations would still be preferred to Bitcoin. If one wants to sell the idea that BTC is a better choice than X, one must produce compelling reasons why this is so, preferably without relying on ideological statements that don't have universal appeal; I'm sure the goldbugs love BTCs anti-inflation nature, but that argument only carries the day with a very small group of people.