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Comment by nsxwolf | Hacker News Reader

Credit card companies have a good system for handling $5 disputes. They write them off.

Not quite, they make the merchant write it off. And if someone brings too many disputes, they investigate.

(The small fraud problem is one reason I think micro payments can't happen: you can't investigate sub-cent fraud, but if someone can automate it they can steal a lot.)

Or you have a system with incredible amounts of fraud that still manages to function, like CPC ads

So you mean a system could exist to lower costs for some parties?

While at the same time increasing the collective cost for everybody else? (ie: wasting energy).

Is it wasting though? Do you consider vaults a waste? Do you consider 2-3% CC fees a waste?

We already have costs built into the current system (e.g. cc fees to make up for fraud, security systems around protecting gold + cash). Electricity is just the cost of that specific system - I think calling it a waste is not necessarily justified.

Credit card fees are 2-3% for a reason -- you can get 2% cash back as a customer with a no-annual-fee card for instance. Then there's the fact that credit cards are loans, and there's a cost to lending. Finally, credit cards come with protections (chargebacks), guarantees, additional warranties and all sort of other customer-friendly services that people want. And obviously are willing to pay 2-3% for.

In the EU where people don't want the system to work like that interchange fees were capped in 2015 at 0.2% for debit and 0.3% for credit [1]. If that's what you want, there's a proven model for establishing it. In Australia it's capped at 0.88% for credit and the greater of 16.5c or 0.22% on debit [2].

Did you know Bitcoin alone ALREADY used 0.5% of world electricity at the end of 2018, even though nobody really uses it? [3] It's like we're all paying a 0.5% surcharge on top of everything we do, which is double the price of EU interchange. Just to support some ancap pyramid scheme that people agree solves largely 1 class of problem: payments for illegal goods and services, while pretending to solve all the worlds problems, just poorly.

[1] https://www.adyen.com/blog/all-you-need-to-know-about-the-eu...

[2] https://www.adyen.com/blog/card-processing-in-australia-just...

[3] https://www.sciencedaily.com/releases/2018/05/180516131236.h...

2-3% CC fees are a waste. But you don't need blockchains to fix that. You need someone to legislatively force the CC companies to stop playing the cashback bullshit game, which is the real cost driver (much more than fraud) as it funnels money from cash and debit card users to high-reward CC users, while burning a lot of it on the way for managing all of that overhead that is of no help at all when it comes to making financial transactions.

It happens to be that the EU is such a "someone". In EU countries, CC interchange fees are limited to 0,3%, debit fees to 0,2%, effectively resulting in much cheaper rates to be paid by merchants (whether big or small) for card acceptance.

Thoughtful legislation and an effective, fair and trusted executive branch, both with the necessary checks and balances, trump any blockchain, at least as long as we are talking about legal transactions.

One needs no blockchain to make a guarantee that a cancellation of the payment can’t be performed.

Are you referring to cash transactions or something else? I’m curious what you may have in mind for remote payments, especially internationally

And either the merchant or the company gets stuck with the $5 dispute, while the guilty party enjoys a free $5. Nice system!

That's absolutely not how the chargeback system works. Further, the blockchain system is entirely irreversible so $5 or $500,000 once you get scammed gone is gone and you have zero recourse. Nice system.

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