[always_good]

Doesn't that simply depend on how often you have to leverage human enforcement? Whether you have to do it <1% of the time vs 100% of the time would drastically change the answer to your question.

It's like chargebacks. 99.9% of my purchases I will never issue a chargeback for, so most of the time I choose to use a payment mechanism (cash, bitcoin when I can) that doesn't come with all that overhead. If I was frequently getting screwed by merchants, then my payment habits would change accordingly.

[URSpider94]

Let’s take your example of chargebacks. If you only need to use them 0.1% of the time, then they are worth a 0.1% fee, right? Now, add on the costs of procuring and carrying cash (or exchanging to Bitcoin), the cost of having to hold that money outside of a bank account and not getting paid interest.

Then consider the fact that for most transactions, you pay no incremental cost for using a credit card. Yes, that is because the merchants eat that cost, but as an individual there is still no incremental cost to you. Merchants do this in part because they get more sales, and in part because credit cards save THEM money, too - easier accounting, no need for armored car service, less theft or error by employees.

Finally, it’s not accurate to compare the chargeback rate of credit card transactions with cash/crypto. Chargebacks for credit cards are very low because vendors are on the hook to pay for the costs, and they can lose their ability to accept cards altogether. If we all move to cash/crypto, the fraud rate will undoubtedly go up. Of course, someone will then create an escrow service that gives you the opportunity to dispute the transaction, in return for a small transaction fee. Maybe they’ll even offer to let you buy things in Bitcoin and pay them back later in cash, and charge you interest. I bet they could add in a rewards program...

[leppr]

> Of course, someone will then create an escrow service that gives you the opportunity to dispute the transaction, in return for a small transaction fee. Maybe they’ll even offer to let you buy things in Bitcoin and pay them back later in cash, and charge you interest. I bet they could add in a rewards program...

...and you're back at square one ?

No: from a monolithic, impenetrable system you get an environment which favors competition. That's a win.