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Comment by mgfist | Hacker News Reader

This is a big part of my problem with crypto and why I'm bearish on it breaking through to normies. Traditional financial institutions just seem so much safer all in all, not to mention having far better UX.

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The big thing traditional institutions give you is logs of everything. Sure if I get your account number I can take all your money - but there are traces of that and so it is easy to arrest me after the fact.

Don't give out your account numbers, there will be a lot of hassle should an evil person get it. However you have a reasonable change of getting your money back in a couple years. (this is also why you get warning about some countries - a few will not cooperate with traces and so the money is lost)

> Don't give out your account numbers

Is that a US thing? In Europe, companies have their account numbers on their letter heads and websites, and people are quite comfortable giving out their account numbers.

https://www.quelle.de/service-hilfe/bezahlung-finanzierung/k...

That's strange because all you need for direct debit authorisation is the account number and name, and a PNG image of a physical signature.

In Japan, that authorisation needs to come together with an official certification, something that’s only valid for 3 months and you have to get it yourself from the local justice branch office.

Why don't we see more fraud using this technique?

That’s definitely not the case in Europe. There’s no way to start a debit operation out of my account other than:

1. Something electronic that kicks of the thing where I need to enter the “ID codes” from device or app; 2. Being present at the bank and having been ID’d;

There definitely is, that’s how SEPA direct debit works.

yeah. I am also unsure why we do not see more fraud here. Is it because of the 8 weeks of no questions asked refund possibility for payers and up to 13 months for unauthorized/fraudulent transactions? Or does the 5 business days lead time to get direct-debit play a role?

It is precisely because of the refund policy. It is so generous that, per my understanding, most SEPA direct debit fraud is abusing the refunds. Most banks do not require much supporting evidence for claiming the debit to be unauthorized, and unlike credit card disputes, the merchant doesn't even get to make a statement in the process.

Only if I allow it via banking website, while logged in (or come in person), right?

No, only a "recorded consent" is required, usually a physical signature or a record of you agreeing to this via online form.

So I can walk to a bank, speak to the teller, and withdraw from any account number by showing them that signature? I think not

Surely just knowing someone's account number can't be enough? Sweden's biggest bank uses your national identification number (equivalent to social security number) as your checking account number, and Sweden's national identification numbers are public information.

I don't know how it works in Sweden. Some accounts have more security. In the end if I know the right numbers (which may not be your national ID) I could drain your bank account - but I would be caught if I tried so even hardened criminals won't attempt it.

There's also the Federal Deposit Insurance Corporation (in the US).

FDIC is great but it really only protects against bank insolvency. It doesn't come into play if money is fraudulently transferred out of your account.

The reason why traditional works is the fraud can be reversed. If money is stolen from your accounts, as long as you are not the cause, in most cases the institution or govt will make you whole.

It is reinvented by 'crypto' in the form of 'subjectivity' (as opposed to the hard objectivity of 'your keys your coins' and the absolute acceptance of all objectively (though perhaps fraudulent or thieving) valid transactions.

One example of subjectivity is if, and this happens, a bug is found which can drastically increase the supply of coins beyond the intent of the creators; everyone comes together and removes those state transitions manually despite their objective validity. A more practical notion would be some type of "this transaction was fraud, someone has authority to reverse it." Of course, this is a hard tradeoff, but users should be able to make it.

The traditional banks are not better than crypto for receiving and sending money, specially when it comes to international transactions.

The only thing they are better is providing security in an easier way.

Is Wise considered traditional or not? Also, Revolut? Those two come to mind when I think about easier/cheaper international transfers.

They are considered fintechs, this usually comes with some drawbacks such as higher chance of unexplained account closure.

I think it also encourages us to rethink specialized and hardened advices versus general ones.

The same attack on every desktop and laptop would be... significantly harder.

> not to mention having far better UX

Yeah, it is totally great to have to set up a different account for every service, then having to do AML and KYC, and then having your account suspended for no apparent reason. So great that international transfers takes days and tens of dollars in fees, if they succeed at all. So great how a large part of the world‘s populace is denied access to the global financial system. Great as well how centralized it is, so things go down when there are technical problems at your bank. Absolutely awesome how Canada was able to freeze bank accounts of people who donated to the ”wrong“ cause.

They totally have it figured out, we should stop looking for alternatives. We already have the perfect system for the ages. Anybody who even tries is delusional.

I'd argue that if used properly that crypto is more secure than most banks.

Here "if used properly" is lifting so heavy it can be used to move Mount Everest.

It can't be more secure if you have no recourse after you're hacked.

You can buy insurance. Like for a stolen car or burned house.

Do you? Someone actually sell backdoored crypto wallet insurance?

argue it

So explain why the Winklevoss twins store their crypto secret words in bank vaults?

I'll give you a little hint - https://en.wikipedia.org/wiki/Monopoly_on_violence

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