Modern finance does have a high barrier to entry. So it makes sense to try and become a big financial player any way you can and then figure out how to make it better once you are there. But that is really hard, and impossible if your efforts get cooped by scammers and day traders.

Try wiring someone money and see how helpful your bank will be at reversing that transaction.

The vast majority of people losing money in the crypto world are the equivalent of people installing sketchy extensions in the early days of the internet that perform attacks on unsecured online banking portals. That this doesn't happen more often against banks is largely a function of the gated-ness of browsers and that targetting banking infrastructure (and national-level infrastructure for that matter) is the hot ticket that guarentees getting the undivided attention of three letter agencies.

Most people do not wire money, they transfer money through some other mechanism that has fraud protection.

For example, if you buy something on eBay and the seller sends you a brick packed in a cardboard box instead, you dispute the charge on PayPal and most likely get your money back. Or suppose that some pissed off hotel clerk decides to charge your credit card for made-up damages during your stay in a hotel.

My experience is that it’s not hard to get your money back. This is why actual scams tend to involve some step where you convert money into something else—since a wire transfer or ACH transfer can be reversed or at least traced, you have scams where the patsy has to turn transfers into cash or gift cards.

And most people do not use crypto? I don't see how the comparison to payment processing companies built on-top of the financial infrastructure is relevant, when bare-metal level of crypto acts most like wiring / transfering money between banks.

And no, a wire transfer or intra-bank transfer is typically not reversed. Even for big-names, like Linus, it is not so simple and requires personal connections with industry insiders to even get simple cases of fraud reversed.

[1] https://twitter.com/swiftonsecurity/status/15121875924140523... He mentioned it in his long WAN VODs, so there isn't a nice source to link to

I don’t see how “most people don’t use crypto” is at all germane to the discussion. Of course most people don’t use crypto—it’s kinda new. No other explanation is needed.

At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real people within the reach of the law, the ability to reverse transactions made fraudulently, etc. If I have US dollars and want something that isn’t US dollars, then I have a ton of safe options to do that (with different protection depending on what I choose). If I instead have some kind of crypto asset and want something that’s not a crypto asset, the fraud protection is much weaker.

Yeah, crypto is kinda bare-metal. Isn’t that a major problem with it?

> And no, a wire transfer or intra-bank transfer is typically not reversed.

Yes, it sounds like we agree on this point. This is part of why most people don’t use wire transfers.

There are, however, conditions where wire transfers can be reversed. Banks are also somewhat proactive about protecting you from making wire transfers. It’s not a service that they offer lightly.

>I don’t see how “most people don’t use crypto” is at all germane to the discussion.

Crypto's closest anologue is wire transfers... which you excluded with the reason of "most people don't use them".

>At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real people within the reach of the law, the ability to reverse transactions made fraudulently, etc. If I have US dollars and want something that isn’t US dollars, then I have a ton of safe options to do that (with different protection depending on what I choose). If I instead have some kind of crypto asset and want something that’s not a crypto asset, the fraud protection is much weaker.

Again, try applying any of this to wire transfers. Almost all of these concerns apply to both crypto and wire transfers.

>Yeah, crypto is kinda bare-metal. Isn’t that a major problem with it?

What's the issue with having access to a permisionless, bare-metal system?

>There are, however, conditions where wire transfers can be reversed. Banks are also somewhat proactive about protecting you from making wire transfers. It’s not a service that they offer lightly.

That is not reversing, that's simply preventing you from initiating the transfer.

I don't understand what kind of argument you are trying to make here. It seems like you are interested in comparing wire transfers to cryptocurrency, but I don't understand what comparison you're trying to make or what the purpose of the comparison is. Either I just don't understand what you're saying, or maybe your argument doesn't make any sense, or maybe you're just really bad at explaining things.

I had thought that this was a comparison of modern non-crypto banking / finance systems to the infrastructure provided by crypto, but you have made it very clear that you consider a more general comparison "out of scope" for whatever point you are trying to make.

I actually have had a wire rejected due to fear of fraud before.

As soon as that wire is fired off, it isn't coming back. It sounds like your bank is on the ball, and is erring on the side of more false positives than false negatives.

Insurance just taxes the risk onto everyone, which isn't a universally desirable feature.