(no title)
battani | 11 years ago
Fraud is as applicable to credit cards as to bitcoin. You store bitcoin with a third party service means you rely on them to keep their servers secure and hope that hackers don't obtain your credentials/identity information to log in and steal your bitcoin. I would argue it's even worse with BTC because their is no fraud protection.
Chargebacks are an issue for merchants, but a huge advantage for consumers. Ultimately the economic demand comes from the consumer and not the merchant, that is why chargebacks are still omnipresent in ecommerce today.
Two areas bitcoin could have addressed are remittances and smart contracts, yet better systems are emerging to solve those problems (Ripple, Stellar, Ether).
Your arguments could be valid in a world where everyone uses bitcoin and doesn't touch fiat. This is not the case. Bitcoin is a great technology in theory but its practical applications are quite limited.
IkmoIkmo|11 years ago
For point 1, obviously wrong. Any sale they make in bitcoin is one they save on their margins. Just because it's not applicable to 100% of sales doesn't mean it has no effect.
On point 2, that's true but is the discount 0? Because BitPay processes bitcoin payments at 0% right now (and has billion-dollar clients like Newegg already), with enterprise options. Point is, whatever discounts CC can make to large clients, bitcoin processors can do, too. Only more, because an average bitcoin order is inherently cheaper.
Fraud is as applicable to credit cards as to bitcoin
Absolutely, but there's obviously different levels of security. e.g. say I tell you 'let's move from checks to creditcards, it's much safer'. It'd be pretty silly to say 'no, creditcards also have fraud'. Yes, but checks are worse. Why? Due to its inherent design.
The inherent design of creditcards (1950s technology, by the way) is writing all the security details (i.e. your money-vault password) on a plastic card. And handing over that information to anyone you're paying, and then they can (and often do) keep that information on file.
Imagine you want to pay with cash at a supermarket and have to hand over your wallet to the company. And when you're done paying and leave, they still have access to your wallet for years.
It's a security nightmare. Bitcoin is different in that you don't send access to your money to a business, you just send money. It's by design more secure.
That's not to say the bitcoin ecosystem is a secure paradise, far from it. But I do truly believe that bitcoin's properties allow an ecosystem with less fraud. Things like multi-sig can create (in fact, already exist) third-party custodians who have no exclusive access to your money and just act as a signing counterparty, for example.
Chargebacks are an interesting topic that I'd be willing to talk about more if you want to know. But it's not a key issue. If it does turn out that chargebacks are wanted by customers, they can be built into the bitcoin ecosystem through third parties like today, keeping all the other benefits of bitcoin. But more importantly, chargebacks as they exist today are pretty shitty, invite fraud, create huge costs, paid for by the customer, and are barely needed. If you want to know the arguments, let me know I'll write them up for you, wall o text already.
yet better systems are emerging to solve those problems (Ripple, Stellar, Ether)
I disagree on the point of remittance, but I'm keeping an eye out for sure! These three are definitely exciting. All three projects by the way see themselves co-existing with bitcoin, check out the bitcoin talks by the CEO of stripe who launched Stellar, but you're probably familiar already.