Comment by afreak | Hacker News Reader

Comment by afreak | Hacker News Reader

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> 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".

[1] - http://www.paymentssource.com/statistics/

>You're either clueless or lying here.

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...

This is what you said:

> 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.

>Now you're going on about chargebacks.

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.

> 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.

You don't get it. Every 7 or so transactions that bitcoin has processed in that couple or so seconds cannot be clawed back, as in NEVER, unless there is a flaw in very popular and important cryptographic technology which in of itself would mean a whole lot worse things can/will be happening besides your 0.01 BTC coffee being clawed back. Those 300 credit card transactions can be clawed back for up to 100+ days. If you are a fraud, you can sit back and relax for a few months before scamming someone.

> Every 7 or so transactions that bitcoin has processed in that couple or so seconds cannot be clawed back, as in NEVER

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.

To clarify my stance: I am not pitching bitcoin to anyone on hackernews (this is not a Show HN). The ability to not claw back bitcoin is a reality, unless there are flaws in the technology behind bitcoin. I believe this is a feature and society could manage to change its ways regarding transacting as a result of that reality.

So … how does anti-fraud work? There's no third party to process charge backs and unlike physical currency a theft can cross international borders near-instantly.

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?

Credit card transactions are reversible by a third party that is supposed to only exercise such power when it believes the original transaction is fraudulent, and is in turn accountable to a very robust legal system.

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.

This is precisely it. The idea that Bitcoin is going to work better than credit cards because you cannot claw transactions back and saying it leads to leads to less fraud is absurd. As a consumer, I like knowing that if I purchase something via my credit card that I have the ability to claw back my payment should I find that I have been defrauded.

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.

What you speak of RE: claw-back ability is easily solved by multisig transactions with bitcoin. However, the so called "moderator" must be trusted.

I mean, in many contexts I would ok to pay in a way that cannot, under any circumstances, be reversed. Specially if the other side of the transaction is equivalently irreversible (that's the whole idea behind smart contracts). For the things where reversing payments is a desired feature, you can build that on top of crypto-currencies (e.g. by using an escrow), so is not like it has to be the wild west. You can get reversible payments or irreversible payments (after confirmation) depending on what the transacting parties need. This flexibility is a good thing.

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.

> For the things where reversing payments is a desired feature, you can build that on top of crypto-currencies (e.g. by using an escrow), so is not like it has to be the wild west.

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.

The recent change is entirely opt in.

"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.

> The recent change is entirely opt in. [...] In the second, you should be checking for the flag that says the payment was opted in to RBF.

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 ;)

>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.

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.

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