Hacker News Reader

Comment by gregd | Hacker News Reader

So do I have to be THAT guy?

Fine.

Crypto solves this issue...

It really doesn't. Crypto solves anonymity, making it possible for operations to take payments in ways that can't be regulated based on content.

It doesn't solve trust. In fact existing solutions fall way, way, short of what consumers already have. A provider that accepts crypto is 100% unaccountable. You can't do a chargeback on Bitcoin. You get what you get once you make that payment.

Now, it's true that there is an ever growing stable of technologies trying repeatedly to solve the trust problem on top of a crypto base. And none have been remotely successful in any market. Almost all have significant drawbacks. Some have included absolute whoppers of security bugs.

You have to crack that second part before declaring that "crypto solves this". Until then, you aren't going to see any successful small payment markets on this stuff.

What does this have to do with trust? Clearly the current users trust OnlyFans, and I doubt very many people are worried they’re going to disappear in the middle of the night and turn off the porn.

“Yeah I’ll throw $50 into this OnlyFans subscription, but only if I can get a chargeback if I’m not happy with the performer” said nobody ever.

It's a stack, though. Sure, no sex work consumer ever said that[1], but their bank sure as hell did. Which is why they had a handy credit card in their pocket with which they were able to easily pay OnlyFans, who were able to easily receive the transaction. It's about TRUST. Banks and consumers and providers work together to come up with a framework where fraud is so difficult as to be largely a vanishing concern for routine transactions.

And that's what you need in the crypto world. It's not enough to have anonymity. It's just not. And that's why this hasn't been solved yet. Keep at it.

[1] Actually some did, who was the starlet that produced a giant chargeback flood a while back by promising nudity she didn't deliver? I'm not the expert but I remember the story.

The lack of charge back is really a small issue. I don't think it applies here. Crypto does solve this problem. Even if there's the lack of charge back, it still overcomes the censorship problem, which traditional systems do not. So do you want censorship + charge back? Or no censorship and no charge back? In this case, I think it's clearly the latter.

You're missing the point. "Chargeback" happens to be a mechanism that exists to promote trust in the market. Trust is the requirement, not mechanism. Right now no one uses crypto to send folks $20 a month for n00dz. Period. No one does this. Why?

Trust. Crypto providers don't trust they won't be hacked. Crypto consumers don't trust they aren't being scammed. There's no trust.

But their Visa card or OnlyFans account? Those they trust. Credit card billing has been around for decades and we all know it works.

Crypto needs to be like that. Address the Trust Problem. Stop fixating on anonymity.

The traditional banking mechanisms are designed to pull money from accounts. That requires a way to correct errors and fraud. If the only way to transact is for a verified account owner to push the money out, a chargeback isn't needed as much.

It's probably more like "I'll throw $50 into this OnlyFans subscription, but only if I can get a chargeback if it's actually just a bunch of cat pictures." There's a lot of scams on the internet, adult industry or no.

> It really doesn't. Crypto solves anonymity.

Depends on the cryptocurrency. If you're talking about Monero then yes.

As for the others, they are far less private than you think and the majority of cryptocurrencies out there can still be traced.

Heh, and intra-crypto wars like this are one of the reasons the Trust Problem hasn't been cracked yet. People are too busy trying to fix the part that's already solved!

I mean, look. Yes, there are ways to trace bitcoin et. al. given some level of sophistication. But the threat model isn't an intelligence agency trying to unmask a single porn consumer or cam worker. These technologies are "anonymous enough" so that an outfit like OnlyFans can reliably take payment from arbitrary consumers without fear of regulatory interference. This part really is solved. It's just not enough.

Don't checks and other payment mechanisms also solve this problem? Obviously not as conveniently as Mastercard or Visa, but it is disingenuous to assert that credit cards have a monopoly on payments.

Checks are slow and can be faked or scammed.

Sending cash also wouldn’t work.

MasterCard and Visa had a strong monopoly on instant transactions at a distance. They fought PayPal quite a bit in the beginning as it encroached on their monopoly.

Thankfully crypto has solved this monopoly

Yes. There's a cost to checks just like there's a cost to using credit cards. The slowness of checks can be mitigated by offering some sort of access until the check clears. I'm sure there are plenty of creative types who can figure out how to route around the credit card problem. Also checks, credit cards and crypto aren't the only payment options.

Instant verified electronic money transmission is difficult. There are not many options here. MC, Visa, PayPal, Crypto… gift cards?

At least with Bitcoin, it's costly to pay privately. I need to set up another wallet and then get funding into it in a way that isn't linked to my main wallet. That involves either giving cash to an exchange or sending the money through a tumbler. There's fees to pay the exchange or tumbler, fees paid to the miners for the transfer into the wallet, and then fees paid to the miners for the transfers out of the wallet (and another fee paid the miners for the tumbler since there's 2 legs to that transfer).

If your hypothesis was true everyone in the industry would already be billing for it

Crypto will have to overcome these hurdles first:

- Slower and more difficult to use (especially compared to saved CC auto-complete)

- No rebills (the biggest problem)

- No credit

- No payment protection

wait until Joe Coomer finds out there's a $17 network fee to send $10 worth of btc to a performer.

These people, especially in porn, live by impulsive spending (buying the subscription, sending tips). The high delay and extremely large sign-up burden [0], combined with the fees, would probably ruin a lot of their income. Remember, they compete with a free offering.

[0] Most people don't own crypto yet, so they'd need to learn about it, create an exchange account, verify it, fill it up and then they can pay. Compare that to two minutes of entering cc information.

CC also went through a similar transformation that crypto would have to.

The problem is that noone wants to take the risk to transform crypto into as convenient a service as credit cards, when credit cards have such a first-mover advantage.

Many companies do want to solve that problem, but they’re hampered by the conventional financial system which really doesn’t like interfacing with anything crypto related.

A key reason for the cost of the CC payment infrastructure is that these costs were instrumental in solving the chicken/egg problem of adoption by ensuring that there's enough money/kickback/etc for all the infrastructure partners to market cards and offer various benefits to get both the cards in the consumers pockets and also terminals rolled out at merchants. Noone wants to take the risk to transform crypto into as convenient a service as credit cards because crypto is decentralized enough so that no organization can feel sure that they (as opposed to everyone else) will see enough payout (e.g. lucrative lock-in, skimming part of every transaction) to justify the quite immense and risky long-term investment required to push consumer adoption.

came here to say this

Crypto moves the problem to the exchanges. It doesn't solve it.

Reply on news.ycombinator.com