- Chargebacks happen when cards are stolen. Cards are stolen because they are fundamentally pull payment methods. Every time you pay, you hand the keys to your money over to someone else. Think about this for a second, because it is absolutely insane.
Whenever you pay with a credit card, you have to trust the merchant to (1) charge the right amount, (2) only do it once, and (3) themselves take your privacy seriously enough to not have your information stolen by another party, who, if they did get hold of your card info, could abuse it at will and then share with more 3rd parties or have it stolen from them!
Credit cards are broken fundamentally. If the only kinds of payments were push payments, where consumers choose when to pay and the merchant has no ability to pull at will, the entire issue of credit card thefts - think Target, Home Depot, or the Russian hackers - would simply not exist.
So chargebacks due to fraud simply wouldn't be there. Sure, there are other use cases for chargebacks, like you felt you didn't get what you paid for or something, but that switches to a customer service issue which increases competition among merchants.
- Who cares about volatility? You don't need to own bitcoin to use it. When you want to send it, buy it at the time, then send it. Big whoop.
Also what is volatility on $100? Are you that concerned about losing or gaining $5, $10, $20 in a day, with a total maximum limit of losing at most $100 if it goes to zero, which seems extremely unlikely? Nobody said you have to invest your life savings. Participating in the technology is as expensive or as cheap as you would like.
- "Bankless people need banks, not cryptocurrencies." - Why? You didn't actually say.
"There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway." - Which is great, because since "people need banks" (your words), bitcoin can finally provide it to them.
- "My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't." - This is short-term thinking. Wouldn't you want something that can provide lower fees to gain market share in the long term, so that discount is not just available to the exclusive group of people who qualify for nice credit cards, but to every person, regardless of qualifications or payment methods?
> So chargebacks due to fraud simply wouldn't be there.
That is far from the only reason there is credit card fraud. Actually most credit card fraud is linked to identity fraud (a hacker stealing someone's financial credentials or posing as them on an online/offline store).
Most of the credit card information stolen from Target and Home Depot is not used but sold as quickly as possible on underground forums to "the greater fool" who is willing to take a risk to use it (if it still works).
Because of the chargeback system, those millions of credit cards stolen are not a huge issue for consumers because they can immediately lock down their card. Cards are replaceable keys. If you believe that you've been compromised, chargeback for whatever amount was stolen from you and change cards. It's a pretty incredible system for consumers when you think about it.
Contrast that to bitcoin. Your third-party bitcoin storage service gets hacked, your bitcoin are gone forever. You choose to store your bitcoin locally and you're exposed to physical theft (like keeping cash under your mattress).
Bitcoin does not solve the fraud/theft problem. I facepalm every time I hear that argument. Chargebacks are omnipresent today because they protect consumers because theft has always been and will always be part of any financial/payments system — simply because thieves don't target "how" you pay (push vs pull doesn't matter) but target where you store your wealth.
> thieves don't target "how" you pay (push vs pull doesn't matter) but target where you store your wealth.
I wasn't arguing against this. Your credit card is where your wealth is stored, if it can be used to purchase things. And your wealth is stored with Target if they have your CC info. So places like that seem a likely target for attacks.
> Contrast that to bitcoin. Your third-party bitcoin storage service gets hacked, your bitcoin are gone forever.
M-of-N key schemes will prevent this in the future. Also not the only option.
> You choose to store your bitcoin locally and you're exposed to physical theft (like keeping cash under your mattress).
I don't see how. If your stuff is encrypted or your devices locked, then they would not be susceptible to theft from your mattress. They'd have to be stolen from your hand while unencrypted or device unlocked.
Not sure that I buy that most CCs are somehow gotten through a means other than 3rd parties who have them.
Another point is that if you get your info stolen, why should the merchant take the loss? They've already given out the product. It's your money to be responsible for, if the merchant doesn't hold the means to charge it, which they wouldn't with bitcoin. This realization will lead to more secure systems, since consumers would not be able to charge back willy-nilly.
> Your credit card is where your wealth is stored.
Your credit card is just a means of payment (a key). Your wealth is stored at your bank.
All these merchants may have your bank keys, but they can't use it to charge you illegally because they will incur costs (a chargeback fee and then some). It a great system in which both the consumer and the merchant are incentivized to behave correctly...
Whenever you pay with a credit card, you have to trust the merchant to (1) charge the right amount, (2) only do it once, and (3) themselves take your privacy seriously enough to not have your information stolen by another party, who, if they did get hold of your card info, could abuse it at will and then share with more 3rd parties or have it stolen from them!
Credit cards are broken fundamentally. If the only kinds of payments were push payments, where consumers choose when to pay and the merchant has no ability to pull at will, the entire issue of credit card thefts - think Target, Home Depot, or the Russian hackers - would simply not exist.
So chargebacks due to fraud simply wouldn't be there. Sure, there are other use cases for chargebacks, like you felt you didn't get what you paid for or something, but that switches to a customer service issue which increases competition among merchants.
- Who cares about volatility? You don't need to own bitcoin to use it. When you want to send it, buy it at the time, then send it. Big whoop.
Also what is volatility on $100? Are you that concerned about losing or gaining $5, $10, $20 in a day, with a total maximum limit of losing at most $100 if it goes to zero, which seems extremely unlikely? Nobody said you have to invest your life savings. Participating in the technology is as expensive or as cheap as you would like.
- "Bankless people need banks, not cryptocurrencies." - Why? You didn't actually say.
"There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway." - Which is great, because since "people need banks" (your words), bitcoin can finally provide it to them.
- "My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't." - This is short-term thinking. Wouldn't you want something that can provide lower fees to gain market share in the long term, so that discount is not just available to the exclusive group of people who qualify for nice credit cards, but to every person, regardless of qualifications or payment methods?
- Last point is covered by my first point.