Bitcoin Chargeback Debate

It is a big loser for the buyer. What if the seller is fraudulent? Now you are out on the BTC and there is absolutely no protections or regulations on getting that money back. Why wouldn't you just use your credit card with excellent consumer protections provided by your issuer?It doesn't actually solve anything from a KYC or trust perspective, which is at the root of lots of these problems. A good interaction is "I, the buyer, have money, you, the seller trust me that I have t

Yes and there is a converse problem, the seller ships the item but the customer having received the item fraudulently requests chargeback - this is common, sadly.I lose the item, the money and a fee - bitcoin, like cash solves the fraudulent chargeback problem - but the buyer is unprotected.Trusted Escrow solves both problems.The chargeback system isn't good for small retailers. The banks have no incentive to check the system or secure the card as the onus is on the merchant.

Bitcoin eliminates card fraud. Once a seller has received the payment and had it confirmed, which takes approximately 1 hour, there is no way it can be reversed. In the current banking system, transactions can be reversed at any time - typically up to 6 months, but there's no definite finality. Anyone who has sold goods online has probably experienced fraud at some point, and has had to price their goods accordingly to account for potential losses.Of course, seller fraud is still possibl

Bitcoin does not support chargebacks, which moves most of the risks associated with fraud from the merchant to the customer. This means it's no longer insane for merchants to sell to places with a lot of fraud.

Chargebacks are useful to consumers not because of evil merchants who can steal their money (merchants in general are not evil and care about reputation). The real problem is giving away full access to your credit card. Someone can steal your CC number from any shop you used it before and then make a purchase. Since CC is so fragile, Visa offers you a chargeback capacity putting merchants under huge risk of fraud.With bitcoin you don't show your whole wallet to anyone. You only make a single

The original Bitcoin paper says:> Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.Emphasis added.It is conceptually possible to create a crypto "credit card". But given that existing transactions are already slow, expensive, and complicated to integrate - I can't see it being attractive.There's also the issue of trust. Escrow merch

Compromised credit card adds significant hassle while Bitcoin transaction adds zero hassle. So CC is worse than Bitcoin for both parties: merchant can lose money and have to insure against it with paper work and higher prices, customer has to worry about reputation of a merchant and check his balance regularly, call the bank quickly etc.Yes, if the merchant steals from the buyer, the raw BTC transaction is not reversible. But normally merchant has much more to lose than you if he is not nice

It's a currency with irreversible transactions, meaning there isn't any fraud protection. With cash, the consumer would get their money back. With bitcoin, they won't.

Someone always takes the hit. Bitcoin allows you to guarantee that you won't take a hit. Other services can be set up to protect other people as well. I might buy bitcoin with my creditcard, such that if someone fraudulently buys bitcoin on my card, either the cc company or the exchange will reimburse me. As the seller, you don't want to be on the line for such things.

As shown in practice by adoption of credit cards and other financial products, people (well, most of them - the 'buyers') for most of their daily business do not want irrevocable transactions like bitcoin provides, but transactions that are reversible and can be controlled by legal authorities.Because fraud matters. Because consumer protection for all kinds of non-delivery, mis-delivery or simple misunderstandings is actually more important for everyday purchases than all the advant