Credit cards take 180 days for the transaction to confirm. Paypal is able to be clawed-back for up to almost the same amount of time. Cash can be counterfeited. Even some bank wires can be clawed back. Bitcoin works as a payment mechanism.
On average, an electronic transaction on your credit card will not be visible to the consumer for one or two days, depending on the merchant. This can be delayed if the merchant and all other parties are taking in a large volume of transactions, but it will show up. Other reasons include allowing for modifications to the transaction (such as merchants who wish to include tips which is a manual process), but if the transaction is electronic, it will appear visible to you within a day or two.
With EMV being in place in the majority of the world and also ignoring some of its security problems, merchants don't have to be concerned about a fake credit card being used as much as they once had to.
With Bitcoin, the merchant won't be able to tell if the transaction is approved without having to wait an onerous and unpredictable amount of time. If this is a restaurant, are we to expect that the person who's paying with Bitcoin will wait for the transaction to be received on the other end?
Credit card transactions run in the realm of 100,000,000,000 transactions per year globally [1], or 274,000,000 per day, or 3,200 per second. At best as of this current writing, Bitcoin can handle anywhere between one to three transactions per second. A delay of one or two days of a transaction on my Visa card to show a meal I had a restaurant is acceptable considering the volume per day, but being that Bitcoin takes anywhere between a few minutes to a half-day to just process the transaction when it operates at <1% the speed is just pathetic.
You cannot tell me with a straight face that compared to credit cards Bitcoin is able to scale and act as a "[workable] payment mechanism".
Surely, before claiming I could be lying you at least googled credit card chargebacks?
This is an example from Discover:
"If you have found a charge you believe is incorrect, you may request billing assistance. You have 120 days from the date of the transaction to open a dispute online. For disputes older than 120 days, please contact 1-800-DISCOVER. Most transactions can be disputed once the charge posts to your account, however, please wait until your first monthly statement after the transaction to report a missing transaction."
https://www.discover.com/credit-cards/help-center/statements...
> Credit cards take 180 days for the transaction to confirm.
Now you're going on about chargebacks. Of course the window for a chargeback is going to have a lengthy period of time. Chargebacks involve a manual process where someone has to identify a payment that they wish to dispute.
You're comparing apples and oranges here.
What is with the attitude you have? I wasn't going on about anything, really. You brought up transaction times which are related to confirmation times. Anything other than bitcoin is molasses-like.
How is a credit card "molasses-like" when it is capable at this very moment you're reading this response of doing 1,000 times more than Bitcoin?
In the time it took to load this page (100 ms), at least 300 credit card transactions have successfully gone through whereas this cryptocurrency nonsense hasn't even completed one.
Normal people read this and hear “if you don't notice theft instantly there's nothing you can do”. This is not the persuasive sales pitch which you seem to think it is.
This sounds like wire transfers but everyone is exposed by default and there's no third-party monitoring for fraud. How am I wrong for thinking that sounds like everyone having to pay for their own private security service?
With reversible bitcoin transactions, the person paying can unilaterally reverse the transaction in a definitive way, without any way to appeal the reversal.
I think it's clear we are talking about fairly different threat models, even if you are all for fully irreversible transactions without any centralized control.
What is being missed by this person is that with Bitcoin there is no option for this and it relies on the honesty of all parties involved which does not make for a good model.
The problem is that this recent change, allows you to claw back your payments without any third party signing off on it, and without your counterpart being able to appeal the claw back. It is also a "feature" most people don't know about, because it is the consequence of the low level implementation of something designed to solve another problem altogether. This change existing and being unknown will lead to more fraud vs plain old "irreversible" transactions. And it is strictly worse than being able to claw back your transactions by appealing to the credit card processor, even if under Bitcoin the payment becomes "fully irreversible" earlier than under card processor rules.
The argument for why this is not a bug, is that even before this change, a transaction could be reversed via a double spend with a certain probability. However, this change makes unilaterally reversing a transaction trivial and certain for multiple hours after it was originally created.
As it stands with credit cards, it's 180 days maximum for a chargeback; meaning that the consumer has six months to make up their mind on any transactions they may not deem acceptable.
How long should it be in escrow if we're to switch to Bitcoin? I don't see how merchants will want to wait six months for them to see any payments and I don't see how consumers will want to see the timespan lessened.
"Most people don't know about"
The only people affected are those who accepted 0-conf transactions. If you accept them, either you trust the person, or you accept the risk. In the first case, this change makes no difference. In the second, you should be checking for the flag that says the payment was opted in to RBF.
>However, this change makes unilaterally reversing a transaction trivial and certain for multiple hours after it was originally created.
This is false: it is trivial until accepted into the blockchain. That usually happens for normal transactions far sooner than several hours.
Do you know if most common bitcoin wallets and payment processing APIs accept or reject payments which have opted in to RBF? It might be a configuration issue, but how big a deal this is depends entirely on what the default configuration is. Still, thanks for the clarification. From the article I assumed all transactions were RBF capable now, without any way to disable it.
> This is false: it is trivial until accepted into the blockchain. That usually happens for normal transactions far sooner than several hours.
Fair enough. The point is that confirmation might take several hours. If I want to accept 0-conf transactions for say, my Bitcoin-powered public coffee machine (not an actual product, but should be...), then I feel a bit safer if canceling 0-conf payments is hard to do and unreliable, even if I don't have any strong guarantees. Waiting even a few minutes for confirmation before brewing coffee might result in grumpy sleepy customers ;)
I don't know. Any serious business (which, unfortunately, doesn't describe many bitcoin ones) should be monitoring them, and frankly, as I said above, if you're accepting 0-confs and not checking for the flag, and sending irreversible products, you're beyond my sympathy. Official guides to accepting bitcoin always say to wait several confirmations, and anyone accepting zero confs has make that decision deliberately.
> If I want to accept 0-conf transactions for say, my Bitcoin-powered public coffee machine (not an actual product, but should be...), then I feel a bit safer if canceling 0-conf payments is hard to do and unreliable, even if I don't have any strong guarantees.
As far as I can see, this is entirely alleviated by the opt-in part. Just reject any transactions that opt in.
I've seen people complain that users will opt in by default and be turned off if they need to wait, but that's a problem with whatever wallet they're using. If I was designing a wallet, I'd make an "enable undo?" button, with a warning that said "if this is checked, you can undo until it posts, which usually takes a few minutes. Be aware that some merchants won't accept such transactions, so if you're buying something instantly then make sure the merchant is ok with it.", and merchants should have signs telling people to turn off the undo feature.
I've worked on batch settlement software and never heard of this. The payment processor has very strict timelines that must be followed for each phase (auth, submission, clearing, settlement). Funds usually appear in bulk the next business day after settlement.
> Cash can be counterfeited.
And easily spotted (in the US). This is more an issue for people than retailers because the banks will almost certainly notice it.
> Even some bank wires can be clawed back.
This is really fucking hard and easily mitigated by immediately wiring the money to another account at a different bank.
A credit card user can declare the card stolen within a day or two and all transactions will be cancelled. Sure, if the merchandise was shipped to his house or otherwise traceable to him, they might go after him legally, but you can go after a bitcoin user legally as well. You can't really fight a "card was stolen" fraud, except that eventually a credit card company will catch on and blacklist you.
That's not a confirmation, that's you temporarily being loaned the funds; confirmation is when charge back is no longer possible and you actually for sure have the funds.
The credit card and paypal systems have evolved to place most of the risk on the merchant because the merchant is generally both better able to prevent fraud and better able to bear the cost of it, while having merchants defrauding customers is extremely unpopular and ruins adoption of the system.
Bitcoin does it the other way round: all the risk falls on the customer. Unsurprisingly this makes fraud, loss and counterparty risk big problems for bitcoin adoption.
This notion that "customers" must have fraud protection is false; people use cash every day without any fraud protection. The credit card companies have sold people on the idea of fraud protection because it's necessary in a system when you give your private key (card number) to every merchant you deal with and your private key is often stolen. Credit card protection is a solution to a badly designed pull based credit card system; it solves a self created problem. A cash based system like bitcoin does not require fraud protection, it's cash.
Well, sometimes you do, consumer protection law guarantees that if it's defective or not as described.
It's hard to sell things online when you have to deal with card fraud and charge backs
How widespread is this, quantitively?
people use cash every day without any fraud protection
Yes - in face to face transactions where you can inspect beforehand and complain afterwards. And people are advised not to send cash through the mail because - guess what - it'll get stolen.
The credit card and a bunch of related non-cash systems like traveller's cheques were invented because travelling with or doing large cash transactions is a risky hassle.
Anecdotelly, I work in online retail, fraud is always a problem and we turn away business to avoid iff'y situations because of it and get attacked by streaks of stolen cards from time to time. Fraud is a real problem for merchants; you can't fight a charge back, you're out the money and the good and you just have to eat it and say thank you while getting killed on credit card fees. Credit cards suck for merchants, we accept them because we must, everyone prefers cash.