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Comment by killdozer | Hacker News Reader

Sure, if you never need to dispute a charge, are fine with the volatility, and have an internet connection wherever you need to pay.

You still can dispute a charge with a store but like cash it would be up to you to sue to get your money back.

Is it better to have some unknown entity at VISA making these decisions based some internal rules and how they feel today?

Visa can be charged by hand no internet but no merchant will because VISA has a rule saying any fraud with a card without a pin the store pays for which is why VISA is down today.

Businesses would rather use cryto.

> Is it better to have some unknown entity at VISA making these decisions based some internal rules and how they feel today?

As opposed to rushing my lawyer in his tuxedo to settle a $8 double payment on the whopper I just bought at local Burger King?

You underestimate the convenience payment processors afford you in everyday life. Approximately 5-8% of my credit has some issue (wrong amounts, double pay, late charges on split payment, chargebacks etc). I don't suppose the percentage will be significantly lesser for any average bloke who makes all transactions on card.

And don't mind almost zero privacy with regards to the transaction

Please elaborate - why is there almost zero privacy?

If you perform a transaction using your own wallet, for which you control the private key, that transaction is now public knowledge on the blockchain.

If instead you perform the transaction using a cryptocurrency exchange it won't be public. However, you can't perform transactions if that exchange is down, making the argument that "bitcoin fixes this" a moot point.

Bitcoins entire premise is around the movement of unspents. If you always use the same wallet for every transaction it is pretty easy to track who sent the money. If you instead are always sending your money to a newly derived wallet from your HD (Hierarchical Deterministic) root it does make it much more difficult to track what money was money being spent on something and what money is part of a persons total value

I’m not sure what you would need to dispute. Bitcoin, when used properly can’t be “stolen”. Compare that with Visa where every single merchant you come into contact with can steal your card, and charge arbitrary amounts to it by design. As someone who has had to go through a few disputes in recent history, depending on the bank, they treat you like a criminal and need to go though an elaborate process to dispute. And if the merchant doesn’t agree you are SOL. Never lost a penny in Bitcoin where I’ve had thousands stolen from me via traditional credit cards.

If I pay for something, and the merchant doesn't deliver - I have a legal right to a refund which the credit card provider will give me. This is standard in the UK.

If I'm daft enough to pay for something with Bitcoin - well, transactions are irreversible by design. So in the case of non-delivery, or a broken / misdecsribed product, there's no mechanism to force a refund.

If your credit card provider treats you like a criminal - use the free market and choose another one. Or complain to the regulator.

If your cryptocurrency provider is a bit rubbish… well, you're stuck with a single unregulated blockchain.

I know which model I prefer!

You have no right. Visa decides who wins the dispute. That may be the standard but get someone having a bad day and you might get the non-standard treatment.

That's not my reading of the statute - https://www.legislation.gov.uk/ukpga/1974/39/section/75

Nor my experience.

Bitcoin can absolutely be stolen, and there is zero remediation process for when it happens.

Eg:

1. You buy something on the internet. The merchant never ships it.

2. Your system is infected with malware and your key is stolen.

Both of these scenarios are trivial to remediate on a major credit card network in a country with reasonable banking regulations, and impossible to remediate on the bitcoin network.

Isn't that how cash works where you would need to sue the store.. You wouldn't be able to reverse a bank card purchase without a court order either.

If your computer is infected with malware and your bank allows someone to transfer the money in your account out there are some delay safeguards but you still could lose it.

If you use an exchange they have some safeguards in place.

If your holding the wallet you are the safe guard.

Visa is charge upto 30% a year on balances now.

You order an item, pay in bitcoin, yet the merchant never ships the item.

What now? With credit cards, you can dispute the charge and get your money back. With bitcoin, it's gone forever.

Bitcoin transactions can be written to support escrow use cases.

*Edit: Transactions can be sent to a script which requires multiple keys to forward the funds from that script address to a wallet address. https://en.bitcoin.it/wiki/Multi-signature

This is the primary mechanism for escrow services to function. If the need for a CC-like refund feature is important to the user, one could potentially use a service over Bitcoin which is party to a 2-of-3 multisig transaction. The payment may be settled immediately by the buyer and seller. Or either party may dispute with the service provider to settle according to some agreement.

To perform escrow with that technology a trusted third party is required, at which point, you are resolving disputes exactly the same way it works with credit cards: you are convincing some organization that the transaction wasn’t satisfied.

True, but then we‘re no longer talking about Bitcoin.

The settlement layer is rarely the most interesting part of a retail payment system.

How? It's direct from wallet to wallet

Isn’t that due to regulation? Surely we can also apply some rules to payment processors that use a decentralized network under the hood and get the best of all worlds?

Visa’s operating margins are insane. I think we can do better than a global oligopoly skimming %ages of every transaction.

I'm pretty sure running the Visa network is a lot more energy efficient today. And you cannot discount the fact that miners will also skim percentages of every transaction.

Visa has a huge footprint and those plastic cards are not organic. The toxic material for printing plus the buildings and employees who drive in to work each day to keep the system going or the millions of miles Visa sales, repair, security, etc drive each year need to be counted.

Miners are cheap.. Visa execs flying in private planes are worse for the environment.

yes but that regulation is based on the root of trust of strong KYC and AML. bitcoin just uses a private key that anyone can generate and use. again by design

I’ve had that exact scenario happen with credit cards and didn’t get my money back. Not sure what the point is.

If you want to pay ~$30 a transaction.

https://jochen-hoenicke.de/queue/#BTC,24h,weight

Where did you get this number? Transactions for as low as 1 satoshi per vbyte have been included for a while, with the average around 10 sats/vbyte. That’s like 3 cents for one transaction.

3 cents sounds like a good deal. But how do we buy a piece of bread with bitcoin at grocery store?

Well, you can't buy that.

But you can buy servers at vultr.com or domains at porkbun.com (that's what I use bitcoin for) :)

My grocery store has a crypto ATM. I wish I were joking.

you can if you are in El Salvador for example

Litecoin fixes this

Credit cards cost much more than $30. Try spending more than $1000-2000 on a credit card, the merchant easily eats more than that.

Very few places that accept credit cards give cash discounts anymore.

Because Visa made that against there rules.

Only in a few states.

They tried, but it's been deemed not legal for them to do that in most states.

.. as long as you’re willing to wait a couple of decades for the transaction to be approved.

Yeah, let's just wait an hour or two for a transaction to finalize and pay a $50 merchant fee per transaction.

It wasn't always this way :-/

Because the volume was almost zero, which it can handle.

The volume now is (in relative terms) slightly above zero, which it cannot handle.

Right, because it works fine at a smaller scale, but could never handle the transaction throughput that VISA handles.

You know the miners control it all when they stopped including free transactions for aged coins (ie: most transactions used to be free).

have you heard of lightning network?

The only problem with LN is that is actively requires an internet connection. Wherein Bitcoin could be done offline similarly to a Card Imprinter

lightning is a reimplementation of a part of visa, caching for response time and still recording on a blockchain, no?

reminds me of https://en.wikipedia.org/wiki/Greenspun%27s_tenth_rule

It's an alternative payment network, implemented as a bitcoin layer 2. You can argue that it's somewhat centralized, but not as much as Visa.

No, that is not how lightning works.

How is it essentially different?

Visa transactions can be reversed, Lightning transactions can not.

Bit a of an apple to oranges comparison anyways but that's the biggest difference.

Where do you actually use lightning? Does it work for you most of the time?

Well I've actually paid for street food using lightning, and also use it regularly it to send money to my family using Strike. It's instant and practically free.

So FedNow instant payments? If one has to choose between central finance with regulations, protections, and recourse and cryptofolks running DeFI with zero recourse, which is a financial participant more likely to choose?

https://www.frbservices.org/financial-services/fednow/about....

Just imagine you're not in your cushy first world country and that question answers itself.

Sure, crypto might be useful in a few backwater or failing nation states. In all other situations, it’s a dumpster fire being put forth as a solution when there are other superior options.

China, the US, or Europe could even offer digital wallets to individuals in those countries if they could get KYC worked out. Venezuelans use USD via Zelle for example, not crypto.

https://www.coindesk.com/markets/2020/06/16/venezuela-is-a-t...

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