Yea, having third parties capable of reversing transactions has an associated cost. But, it’s Billions relative to fraud, so Billions ends up being cheap.
Blockchains are irrevocable and unalterable, which removes two useful tools (reversing and changing transactions), and replaces them with nothing workable.
Also, there are limits on how old a transaction can be when a bank goes and rewrites history. In my experience the limit is about six months. Transactions older than than are considered settled.
If this is a feature that people want in a cryptocurrency, it shouldn't be hard to achieve with smart contracts. The problem right now is just that you need a solid settlement layer before you work on features supporting the politics of rejiggering unsettled transactions.
Also, provided there is community consensus (this differs based on whether your currency is proof of work or proof is stake) blockchains can be altered after-the-fact to undo a threat. It happens: https://spectrum.ieee.org/tech-talk/telecom/internet/ethereu...
It's just that for most currencies, it's currently a political affair that occurs at a risk to the stability of the overall system. But there are (what appear to be) good technical solutions to that (decred, for example, has a neat approach to post-fork-attempt stability https://medium.com/decred/detailed-analysis-of-decred-fork-r...).
As far as deciding whether a transaction ought to be settled in the first place, people are experimenting with some really interesting approaches (https://particl.wiki/learn/market/mad-escrow for instance).
It's probably not time to forget your bank password and switch to crypto, but if we want to eventually have good solutions to our fraud problems then we should be working to shape crypto into the system we want, not dismissing it as inflexible.
The rest of the things on the list aren't in significant use at the moment, and might never be. Measures that are not ready for prime-time are as good as nonexistent. We're talking about money here!
That's not how technology works. To become fruitful it requires patience and investment. Nobody is saying you have to be an early adopter of these currencies.
> We're talking about money here!
...and particularly whether it's current feature set is amenable to fraud prevention. I work at a traditional payments company and the waste is infuriating--there has to be a better way.
This here is probably the source of our disagreement. As far as I can tell, tons of people actually are saying "get in now", which means we're no longer in the patience and investment stage, and any deficiencies in the cryptocurrency ecosystem have real consequences.
I'm interested in the tech and I want to work on it--so I'm just arguing that we shouldn't dismiss it.
If you have the interest, now might be a good time to diversify in that direction, but it's nowhere near ready to compete with fiat currency in terms of usage by the masses.
But so are events in the real world. When you think about "reversing or changing a transaction" what you really mean is creating a new transaction that brings an equivalent amount back to the person that paid it.
This is done in the real world by knowing the identity of the receiver person or entity and threatening them with consequences if the money is not returned. It seems to me more a problem of being able to identify the parties in a transaction rather than of mutability of the ledger.
1. A scammer cheating someone out of their life savings through social engineering
2. A central bank "unjustly" inflating currency and giving the newly printed money to specific industry/people etc
3. A person paying for merchandise with a stolen credit card or refusing payment after services/good is delivered.
Fiat solves 1 and 3 (recovery) does not think 2 is a problem.
Crypto solves 2 and 3. People say it is meant for solving 1.
Credit card fraud is regulated such that the consumer is protected after a manageable amount of theft, $50 in the US last I looked. If you use a bank you receive some protections but at that point the implantation is abstracted and not that relevant.
IMO Cryrto is significantly worse in case 3.
You can set a withdrawal limit of say, $50 and you can set a few recovery addresses (of friends, family or other personal wallets).
So if I have $10,000 in my ethereum wallet and I post my private key in every forum and every chatroom on the internet then the most I lose is $50. Before 24 hours pass I send my remaining $9,950 to a pre-defined recovery address which is excluded from the withdrawal limit.
Consumer protections are actually pretty good. The trouble is getting these tools in the hands of users.
So, this is strictly worse than using a credit card.
I don't think I ever spend that much in a single day though. The limit will differ from person to person.
>The independent ability to send all your money to a recovery address is a new security risk.
It's not new and it's not a risk. You could always send all your money to another address. And the recovery addresses are meant to be trusted. I could send my money to a secondary wallet sitting in a safe or to a trusted family member. That isn't a risk.
>Further, you need to notice the issue which means you could be our far more than 50$ unless you happen to be checking how much is in the wallet constantly.
Your balance is printed in big letters whenever you open the wallet. It's hard to not notice really. There's also these things called automatic notifications, not difficult to set up.
>So, this is strictly worse than using a credit card.
But this is supposed to replace cash not credit cards. It is objectively better than cash in terms of consumer protections.
> objectively better than cash
Many people don’t use cash just credit cards. They might keep 50$ or less in their wallets, but that’s about it.
Further, Billions of people can hack my PC, only those I come into contact with can take my cash.
>Many people don’t use cash just credit cards. They might keep 50$ or less in their wallets, but that’s about it.
Because they value convenience over privacy and freedom.
>Further, Billions of people can hack my PC, only those I come into contact with can take my cash.
Even if someone managed to gain access to your wallet they would still have to decrypt your private key. So, it isn't an issue if you use a strong password.
It's difficult to argue that low and predictable rates of USD inflation has had more of an adverse impact on holders of USD over the last few years than crypto fraud on holders of crypto.
Indeed, given that most cryptoassets have actually lost significant amounts of value against the USD since the end of 2017, it's difficult even to argue that the crypto world has adequately solved 2