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Comment by ConsiderCrying | Hacker News Reader

The problem with Patreon is that it's also getting quite bad for content creators (at least there were a lot of complaints about half a year ago) with the cut they take, the money transfers, and the fact that they've tried to ban adult content creators. It would have been fine if this was all stated/implemented right away but, much like many other platforms, they're doing this at a slow creep. There are alternatives but they're coming up against a well-known name and stifling competition, same problem as with Facebook, just on a smaller scale.

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>It would have been fine if this was all stated/implemented right away but, much like many other platforms, they're doing this at a slow creep

I think this is a consequence of the nature of the tech industry. It is acceptable to lure customers in with ultra favorable terms, operate at a loss until your consumers are captive, potentially destroying competitors in the process, then gradually exploit your increasingly unhappy userbase.

I imagine we have had anti-anticompetitive laws against at least some of these practices for decades, but the old farts responsible for legislation and justice are slow to catch up to tech's tricks.

Cash in the mail will always be king.

(Not literal cash in most cases - postal money order or personal check. Most banks will cut and mail a paper check as part of online bill pay for free. The unbanked and anyonmous can send cash.)

Many people might mail cash once, but how many will remember to mail cash on a regular schedule? Without that regularity, you're going to have a lot of creators worrying about whether or not they'll be able to pay their rent/mortgage next month.

Does this make an argument for crypto?

No, it does not in my opinion. What problem described above would crypto solve?

Patreon taking a cut and not allowing adult content.

Payment processing and facilitating has tangible expenses (cost) and payment processors do not want to get involved with any companies involved with sordid industries (higher fraud).

Patreon adopting crypto cuts out the middleman processor and solves both problems.

But crypto ia too user-unfriendly at the moment, so usage would be very limited.

Crypto transfer costs on small payments are higher than traditional payment networks.

A more approachable solution (for the general public, at least) would be a payment processing service that takes the risk of working with adult content creators. But that seems like a tall ask, especially for a problem that's pretty niche. Porn makes a lot of money, but not for the people who're just handling the payments. Or, rather, it might make them a good amount but it's probably the same as the profit from other industries, except with added risk.

They exist and already make a killing.

The problem is that when Patreon allows high risk activities, those activities poison the well, and all "legit" processors must stop offering their services. Thereby, Patreon is now left with using more high-risk-tolerant processors, but paying the same high fees for all activities regardless of its actual risk.

> Patreon taking a cut and not allowing adult content.

That's an issue with the payment manager, not the currency used for payment.

> Payment processing and facilitating has tangible expenses (cost) and payment processors do not want to get involved with any companies involved with sordid industries (higher fraud).

I agree completely.

> Patreon adopting crypto cuts out the middleman processor and solves both problems.

I disagree here. Presumably, the assessment that adult content is higher risk is valid, and Patreon would just assume that risk themselves if they didn't involve a third party payment processor, regardless of the currency used for payment.

Is your claim that fraud would be reduced because there's no real way to reverse a crypto transaction at the moment? If so, my stance is that accepting crypto would just open them up to other issues associated with fraud, and wouldn't be worth the effort.

> But crypto ia too user-unfriendly at the moment, so usage would be very limited.

I agree with this as well, which is another reason crypto isn't the solution here.

From my experience with setting up payment processing for white, grey, and very grey (legal) projects, processing fees are a given. They're actually very reasonable for anything white, and downright -- pun intended -- criminal if you want anything more discrete.

You will have fees no matter the payment processor, but crypto has the lowest if you don't need speed. Cutting out the processor achieves this first aim, even though fees are still necessary to run Patreon. Whether or not they're too high after this is another matter.

Adult content is primarily high risk because of credit card charge backs -- it's very rampant. Being illegal operations is another matter that concerns wire fraud and may cause uneccesary burden on the payment processor were it invovled in a criminal investigation.

The chargebacks, higher risk, and threat of investigation are all priced into more "lax" payment processor's fees. Crypto doesn't need to price this in because: it's practically non-reversible and there is no centralized body fronting the risk, i.e decentralized operations.

The blockchain network fronts the risk for wire fraud, so that no other entity, f.e Patreon or PayPal, need to.

I have no stance or argument, these are just some musings I wrote from my observations in the "industry."

Crypto is the preferred payment processor of high risk businesses. Everything else that caters to it is downright garbage in comparison.

> but crypto has the lowest if you don't need speed

Fees are a moot discussion when the underlying crypto is unstable. I'd much rather have higher fees than an unpredictable "currency" like bitcoin that could be worth 50% less one month than when it was collected.

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