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Comment by danfritz | Hacker News Reader

I have never had "bugs" from my bank or money that suddenly got stole / removed from my account. Yet in crypto land this seems to be daily news.

Far too much trust and too little control in systems like DeFi. It all sounds wonderful in theory but we fail to see the big impacts of human errors.

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Ahem: "Wells Fargo clients began to notice the fraud after being charged unanticipated fees and receiving unexpected credit or debit cards or lines of credit."

https://en.wikipedia.org/wiki/Wells_Fargo_account_fraud_scan...

This is a rather rare occurrence, and was fixed, with legal consequences for the bank.

Were the consequences actually impactful? Or did they only amount to a slap on the wrist and brief period of public shame before returning to business as usual?

Your anecdote is as powerful as mine: I have never lost crypto due to a technical glitch.

As for bank glitches, here are some recent ones:

https://eu.freep.com/story/money/2020/06/30/scams-glitches-s...

https://www.verdict.co.uk/chase-bank-accidentally-makes-man-...

Nobody except the 'bank' in this case lost money. In fact, Compound also has a treasury that can and has been used to pay out users affected by bugs. Some small percentage of every loan on compound goes to fund the treasury. It's quite a good system.

It doesn't sound wonderful in theory. It's sounds awful. And in practice it is too.

It sounds wonderful when waxed praises from a crypto enthusiast. The people who know better don't care to refute it enough, IMO.

I have had other peoples money deposited in my account many times due to bad OCR for checks!

Wouldn’t bad OCR on a check change the account to be debited, not the account into which it is deposited?

It specifically happened with payments from the IRS (I was getting someone's refunds) so my assumption was some wonky automated deposit handling on the bank's end. OCR is my theory because we had the same account number, except a 1 was switched to a 7.

Never had fraudulent charges on your credit card?

There's a mechanism for putting that right

Complaining on social media isn't really a sound mechanism.

Every time I have had fraudulent charges on my credit card, it was the credit card company who spotted it and reversed the charge before I even notified them.

Good for you. Everytime there was a virus on a computer, the antivirus spotted it and reversed its actions before I even noticed them.

Yeah totally. My credit limit on my Chase Freedom card is $90M, and this one time I bought something for $90M when I thought it was $90, and I was totally unable to reverse it.

I have, and they always immediately reverse the charge. I have never had to pay for a fraudulent charge.

And yet, it remains the case that you experienced a bug where money was suddenly removed from your account without proper authorization, which was my point.

and my point is that there is an easy way to recover from that situation, where as with crypto you are out of luck.

That's not a bug, it's how they were designed. Someone could steal your secret key and make an unauthorized transaction with cryptocurrencies too. Only, then you would have practically no recourse.

"Unauthorized payments" is a bug. It's an unfixable bug for which they've created a recovery system, but it's still a bug, because the system is not intrinsically secure.

"Steal your secret key" is not a valid analogy to a having a credit card number stolen. The information density of a secret key is orders of magnitude higher than credit card info, and that's why it has provable security properties that credit cards do not. Credit card info can in principle be brute forced where keys cannot.

This means though also face the risk of losing your key and having no way to recover it. This seems like a bigger risk to me.

You’ve had to pay an extra 2% on everything you buy (as well as everyone else) to pay for the overhead of dealing with all of the fraudulent charges.

Ultimately the entire market cap of Visa/MC/AmEx illustrate how much more we’re all paying over and above the just paying for the fraud directly.

Sure, but my credit card also gives me 2% cash back on all purchases, and since I would have to pay the extra % no matter what, may as well get the cash back, too.

I also get something for that 2%… the fraud protection you mentioned, the safety of not having to carry cash, ease of use, spending tracking, the ability to dispute a charge if a vendor screws me.

Honestly, credit cards have been a great thing for me. I have never paid a penny of credit card interest and get thousands of dollars in cash back every year.

You also get point and click suspicion-less suspension of your ability to transact (no burden of proof), and total financial surveillance as well.

It's not all good. Having an alternative to these privacy-destroying systems is a good thing for society.

(The cash back you receive does not cover the increase in prices that are passed on to you. It is ultimately a losing trade for you.)

> The cash back you receive does not cover the increase in prices that are passed on to you

Very few places charge a different rate for credit card vs cash purchases, so I would have to pay the increased cost whether I use a credit card or not. Since I have to pay it anyway, might as well get the cash back.

Also, while you are right that I could hypothetically have my account suspended for no reason, it has never happened in the 25 years I have been using credit cards. I also mitigate this risk by having more than one credit card with different providers.

However, I have had merchants fail to deliver something I purchased and had to use the chargeback feature of my card multiple times, something I couldn’t do with crypto.

I don’t think I want to try to eliminate hypothetical risks that are unlikely at the cost if incurring very likely risks that I know will happen.

This seems like people who don’t wear a seatbelt because they are worried they will be trapped in a burning car unable to get out. Sure, that is possible, but not nearly as likely as being in a car accident where a seatbelt would save you from injury or death.

> Also, while you are right that I could hypothetically have my account suspended for no reason, it has never happened in the 25 years I have been using credit cards.

To you. It has happened to a lot of protesters, publishers, and dissidents in the world.

These systems shape all of society, not just your one life.

They are defrauding the merchant or the bank. I have zero risk.

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