[vishnugupta]

I've been working in the payments industry on and off for 15 years. I am yet to work with a payment method that does not support reversal (except for physical cash). As a last resort victims can file chargeback with their issuers or police.

To begin with there are several layers of protection built in at acquirer, issuer, network and so on. Almost at each step there's an option to reverse the payment (or issue a compensating transaction) and finally the chargeback and legal recourse.

Bear in mind that each of the business process of the current payment systems exists for a reason. They are the result of decades of learnings and trial and error.

Are there plans to build equivalent features on Blockchain for crypto currencies? Or do their users have to go through the same painful failures?

[hn_throwaway_99]

> Are there plans to build equivalent features on Blockchain for crypto currencies?

Basically every crypto enthusiast out there touts the non-reversibility of crypto transactions as its primary feature, not a bug, and that is why I see crypto as generally useless for your average person.

[pelario]

Not a fan of crypto, but your argument applies to cash, wish is still widely used (not only by shady people ;) )

[vishnugupta]

> but your argument applies to cash,

Right, so it's important to understand the context in which cash is used.

The vast majority of cash transactions take place in exchange for goods/services rendered immediately. Like I go to a grocery store, buy a pound of bread and pay cash. So disputes are settled right there and then, merchant and customer talk it out. Also, about 90% of cases ticket size is ~20$ so even if a dispute isn't settled in spender's favour it's no big deal. The spender will not transact at the merchant again so in fact more often than not merchants are willing to settle in favour of customers.

Now for larger ticket items I'd hypothesise that 99% of them are done through online through credit-card, bank transfer and what not. Due to safety reasons customer as well as merchant wouldn't want to deal with big sums of physical cash.

That leaves us with suitcase piles of cash being paid; and it's not hard to guess it's mostly being done to avoid authorities. Note that there is a legitimate use case for moving large piles of cash, say casino depositing daily earnings at their local bank. That is not a transaction in a meaningful sense.

[hn_throwaway_99]

I think this is really a key insight. The physical nature of cash actually puts limits its fraudulent use cases.

I mean, think of all the movie plot points that center around having a drop point for ransom payments. Remember that scene from Mission Impossible - Ghost Protocol in 2011 where they are doing an exchange and the best form of illicit payment is a bag of diamonds.

Not only does crypto make giant illicit ransom payments feasible on a previously unimaginable scale, it's going to make our movies more boring ;)

[vishnugupta]

Since you mentioned movie, my favourite one is No Country for Old Men :-). If that movie doesn't put the fear of a bag full of cash, I don't know what will!

[linspace]

I really don't know anything about the subject but I think stolen cash is much more hard to conceal and to move. It can be marked also and tracked (or so they say in the movies). You need to justify its possession. You cannot go to the airport with an arbitrary amount of money.

[jhauris]

> You cannot go to the airport with an arbitrary amount of money.

This is actually a major problem in the U.S. where the fourth amendment is supposed to protect against unreasonable seizure. It is not illegal to carry cash, but federal and local law enforcement agencies will by policy seize cash without charging anyone with a crime. The victim needs to sue to get their money back, and then the agencies use tax-payer dollars to fight it. This is a clear violation of the 4th amendment, but is absolutely rampant.

If we don't fix these problems with cash, you can bet they'll come for your crypto when it becomes popular enough.

[wombatpm]

I don’t keep me entire net worth in cash. ATMs have limits, and banks typically require in person presence and reporting when dealing with large amounts of cash. Crypto not so much.

[SlapperKoala]

Yeah and there's a reason people stopped keeping money in cash

[rastapasta42]

Banks basically act as escrow service, and it's not difficult to build this feature with smart contracts (as long as vendor is comfortable with the money being held by Escrow for a period of time, say a month).

[hn_throwaway_99]

So, in other words, build in all the parts of the modern banking system into crypto, which was specifically designed to be decentralized without a single arbiter of the correctness of transactions. Talk about the worst of all possible worlds...

At the end of the day, there is a fundamental judgement call when it comes to disputes: was the product "substantially not as described"? who has better evidence? etc. Once you put an arbiter in the middle, making this decision (which, again, I argue is an essential point of the modern financial system) the entire raison d'etre of crypto goes away.

[swiley]

It is, bitcoin is cash on the internet. If you want reversible transactions and credit then use a credit card, I'm pretty sure there are credit cards for crypto now and if there aren't there probably will be soon.

[hooplah]

It is for merchants. Chargebacks are abused and can kill your profitability in certain industries. Stripe and PayPal label these has high risks and will shut your account down if you receive too many chargebacks.

As someone who uses crypto on both ends, I think no reversal is the fairest way. Both sides lie, but the customer lies quite a bit and is usually favored in CC reversals.

[Nursie]

We have literally millennia of evidence that merchants are not to be trusted. “Both sides lie” covers a massive power imbalance as well as just ignoring history.

[Andrew_nenakhov]

As a person living in an authoritarian state, the inability of the government or other authority to reverse a payment looks like a very attractive feature to me. Yes, it does have downsides. They just don't look as troublesome as being completely cut off all financial services with a simple stroke of a pen - which was experienced by many members of political opposition in my country.

"... but but Drugs! Criminals!" is what common people say at this point, to which I answer that drugs and crime flourished long before Bitcoin came to exist.

[rstuart4133]

Some things are near incomprehensible to us in the West.

One was what happened in Lebanon after the port explosion. An Australian who had married a Lebanese wife and moved to Lebanon reported the couple had decided the move was a bad idea, and were saving for a relocation back to Australia. Then the explosion happened, and the government literally ran out of money. The solution was apparently to raid the citizens savings accounts. From https://www.aa.com.tr/en/economy/lebanese-cannot-access-mone... :

> As a result of monetary policies implemented by central bank Governor Riad Salameh, people are currently unable to withdraw money even from local currency accounts, she added.

I don't know if their savings were permanently taken or merely "borrowed" for a while, but in any case the move to Australia was taken off the table when it looked most desirable.

In that scenario, the non-reversibility of Bitcoin transactions looks real attractive. I think it is fair to say crypto currencies look most attractive when the traditional trust networks we humans have crafted out of out of bankers, institutions and laws break down. While the crypto currencies have their weaknesses - the 51% attack is very real and the power consumption of Argentina can seem over the top, they provide a very concrete, measurable level of trustworthiness. You know what it will take to break it. The soft human trust networks can and do break in a myriad of ways, so often we given them a name - "black swan events".

[anonu]

A haircut on savings accounts is comprehensible. It happened in Cyprus during the GFC. Inflation and/or negative interest rates (like in Europe) can also be viewed as a slow bleed on savings that are not invested in hard assets.

[AdmiralAsshat]

See:

https://en.wikipedia.org/wiki/Four_Horsemen_of_the_Infocalyp...

[jayd16]

Is the public nature of transaction worrisome to you? Seems like that might also be a political issue.

[prox]

This is really the heart of the matter. On hand , yay, great we can subvert nasty states using cryptocoin, but also could undermine legitimate democracies. Swords cuts both ways. No one can deny the wave of ransomware and cryptocoin are not related.

How do we balance it so it can provide a net positive for humanity?

[Andrew_nenakhov]

Yeah, nobody ever asked for ransom before cryptocoins. /s

Legitimate democracy can't be undermined by an international currency not controlled be the government. In fact, it can be reinforced by it.

This issue is very similar to free speech: the good it does by making the government unable to silence political opponents far outweights the harm done by extremists and lunatics of all sorts.

[user-the-name]

People tried ransomware before cryptocurrencies. Payouts were minuscule compared to what cryptocurrencies are now enabling.

And no, it is not at all similar to free speech. Cryptocurrencies do massive harm - to the environment, to innocent people losing their money to scammers and frauds, and to the entire economy through enabling ransomware - and tiny, tiny amounts of good, which dwindle in comparison to the harm.

[Andrew_nenakhov]

Do you have some numbers to back these claims about massive harm? Without estimates this sounds like a typical fear-mongering.

If you provide numbers, we can compare this massive harm with some other types of massive harms.

As for tiny amount of good - reclaiming control over storage of value from The Man is such a tremendous achievement that will help us fight tyranny everywhere. Bitcoin donations was the only type of funding russian government failed to stop when it started to clamp down the opposition. For me, this capability trumps your concerns about environment and crime any day.

[user-the-name]

0.1% of all the power generated on the entire planet is being destroyed by bitcoin mining.

If that is not massive harm I do not know what is.

[panarky]

> Payouts were minuscule compared to what cryptocurrencies are now enabling

I see arguments of this form everywhere:

Law-abiding, tax-paying, responsible citizens use Tool X for legitimate purposes. Criminals also use Tool X for crimes. Therefore, we should ban Tool X.

Tool X = {cryptocurrency, encryption, firearms, drugs, etc.}

Tools that have legitimate uses should not be prohibited to law-abiding citizens.

Absolutely prosecute people who use the tool to hurt other people, but don't prohibit the tools that both bad people and good people use.

[user-the-name]

Bitcoin hurts many, many people who never use it. Everyone who uses Bitcoin is contributing to this harm.

[vbuterin]

The closest thing to those concepts in crypto would be multisig wallets, including more advanced ones that enforce a "daylimit" where a single key can withdraw a small amount but larger amounts require confirmations from multiple keys or a delay during which another key can cancel the transfer.

See also this piece by me on social recovery (a related but not quite the same concept): https://vitalik.ca/general/2021/01/11/recovery.html

But this is all not quite the same as reversal and makes different tradeoffs.

[gruez]

>I am yet to work with a payment method that does not support reversal (except for physical cash). As a last resort victims can file chargeback with their issuers or police.

What about the stories of companies being scammed via wire transfer?

[pc86]

This isn't a scam, it's robbery/theft, which is an important distinction. If you're robbed at an ATM the bank will make you whole. If someone lies to you and asks for money, you go to an ATM and give it to them, the bank isn't going to do anything about it.

[dk775]

You would consider this robbery/theft? Had an in person sale with money sent over cashapp and they charged me 250 dollars more, as the item received was half of what I expected. This was automotive fluids, not drugs lol. I had stupidly sent the money before I checked. Cashap didn’t do anything and figured I messed up so why go to bank.

Hits me a little different now…

[wmf]

Wire transfers can be reversed in some cases but it's not as simple as filing a chargeback; AFAIK it requires cooperation between law enforcement and the recipient bank.

[celticninja]

Definitely have been cases where they have not been able to reverse transfers of this type, even for huge sums, where they know exactly where the money went ie. the bank and the specific accounts:

https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

[vishnugupta]

Right, not having worked with it my knowledge of SWIFT is at a superficial level. So I actually followed Bangladesh heist because it's a fascinating at multiple levels.

The net loss was in fact minuscule (in % terms) compared to the attempted amount. Summarising from the article you linked.

> ....illegally transfer close to US$1 billion

> ..The Federal Reserve Bank of New York blocked..US$850 million

> ..with US$20 million traced to Sri Lanka...recovered

> ..traced..US$81 million to the Philippines...out of which US$18 million has been recovered.

So the actual loss is ~US$60 million. I would say the system has worked as intended, for sure there's a scope for improvement which I'm sure are being worked upon. Also I imagine the 4 individuals, the final recipients of the money are being pursued.

If I do a thought exercise with bitcoin; what are the potential options to prevent such a heist? I would imagine within an hour or so $1B would get distributed to to thousands of wallets. Sure, you could trace all of that, but then what? Would you instruct the Blockchain network to not authorise any spends originating from those addresses? Kind of maintain a black list?

[wmf]

There have been several proposals that would delay large crypto transactions by 24 hours or require them to be approved by multiple people. In no case are transactions reversed, but the idea is to introduce enough friction that hacking/fraud won't be effective.

[0xEFF]

The only time average people wire money is when they close on a mortgage.

[yebyen]

And for someone that has never done it before, it's absolutely terrifying – probably the most money you've ever spent in your life in a single transaction, with zero visibility into whether the transaction has worked, and fraud warnings in big red letters to let you know that if you're going to get robbed or scammed, it's probably right here that it will happen.

And be prepared to wait 24 - 72 hours for final confirmation!

[devit]

Transactions have to be irreversible so that law enforcement is impossible, which is the main selling point of cryptocurrencies.

Of course that's a downside if you are the one who would like law enforcement to happen (either because you are the victim of a theft or you want to enforce on others).

Also fraud can be done with reversible transactions as well, in particular the reversal can be fraudulent; in general, reversible transactions are only really effective if the conveyance of whatever was paid for is also reversible.

[Nursie]

Reversible transactions are effective at building trust in situations where you don’t trust the merchant.

If I can reverse a transaction if I get ripped off, I might consider using a smaller or newer vendor. If I can’t then no chance, I’m sticking to the one I trust, even if they don’t have what I want.

Reversible payment methods are a huge boon to merchants, whether they realise it or not.

[linspace]

I thought that the selling point was avoiding centralization. I suppose some measures could be implemented to avoid robbery.

[kragen]

Payment reversal is an open invitation to criminals to steal from sellers. A friend of mine had his laptop stolen via payment reversal. Listed it on Craigslist for sale, a woman paid by PayPal and then came by to pick it up, and after she left she reversed the payment. PayPal automatically took her side because he didn't have a shipping tracking number. Cashier's-check scams are another classic form of this crime: https://www.vox.com/the-goods/2019/8/19/20808526/cashiers-ch... https://www.consumer.ftc.gov/articles/how-spot-avoid-and-rep...

Obviously any payment method that is a layer over credit cards and US bank transactions is going to want to support reversal; otherwise, in cases like these, the payment processor gets left holding the bag. It's not "the result of decades of learnings and trial and error." It's the result of banking regulations which impose huge risks on anyone who receives money through the banking and credit card system, in order to avoid imposing risks on people who send money.

In many cases, those risks are not inherent to the transaction being conducted; they are introduced by outdated banking business practices that rely on detecting rare frauds after the fact and clearing transactions over the course of weeks or months. Instead of removing the risks, current banking regulations force them on anyone who receives a payment, so the banks don't have to fix them. Cryptocurrencies just remove those risks instead of externalizing them.

And that's why so many payment methods support reversal.

[Nursie]

Payment non-reversibility is an open invitation to sellers scamming, something which has been recorded for thousands of years.

You’d have to be historically illiterate to want to throw this stuff away.

I’m sorry your friend got scammed, but there’s a host of damn good reasons we put the risk on the seller.

This is not a set of outdated practices resulting in ‘risk’ to sellers, it’s deliberate consumer protection.

[kragen]

There are indeed cases where transactions involve unavoidable risks, and in some of those cases it is best to force the seller to assume those risks rather than the buyer. (I'm not sure why you've put "risk" in scare quotes; as my examples show, these are real risks.) In other cases, like when I pay the rent for my apartment, or when I sold a used car to a body shop, it would be better for the buyer to assume those risks.

But there are additional, unnecessary risks created by the banking system, and for many transactions (like when the thief stole my friend's laptop, or transactions that result in identity fraud) those risks are the vast majority of the total risk. In those cases, cryptocurrency solves the problem; it doesn't just shift the risk back to the buyer.

[Nursie]

I’m sorry but the vast majority of risk is sellers, always has been, always will be. They may not make up the bulk of fraud now, but that’s precisely because we have these rules.

Your links to checks are fantastic. Who the hell uses checks any more? Wow.

Cryptocurrency precisely shifts the risk to the buyer, their recourse is gone if the goods they get are substandard. The imbalance of power between merchants and consumers is real, and consumer protections like reversibility are there to address this.

Perhaps PayPal is not the best choice for person to person transactions. I am sorry your friend got ripped off, but perhaps as a seller he should do his research about who he’s selling to. Without reversible mechanisms, every buyer has to research every purchase.

[kragen]

It seems that you are becoming upset enough about this conversation that you are losing the ability to either consider the limits of your own knowledge or understand my comments well enough to respond to them. I'm sorry I upset you; that wasn't my intention.

[Nursie]

Having worked in payment systems and also having a reasonable understanding of cryptocurrency, perhaps you could enlighten me as to what the limits are?

Your idea that cryptocurrency would solve your friend’s situation is just plain wrong. It might have solved it for one party, but it does push the fraud risk onto the buyer. If your friend had sold a laptop to an honest buyer, but the laptop died as soon as it left the house, or was of lower spec than advertised, the buyer would have been out of luck.

I’m not sure why you think pointing this out indicates that I’m upset, I can only presume this is tone trolling.

[vishnugupta]

> Cryptocurrencies just remove those risks instead of externalizing them.

Cryptocurrencies unilaterally move the risk to the spender and I don't see how that is same as removing risk. A financial transaction is always risky for all the participating parties, there is a chain of liability. You can't make the risk disappear, someone has to bear it and/or underwrite it. Which is why you have all these payment processors that charge x% transaction fees for merchants in exchange for taking on that risk.

A larger point here is disputes will always arise in a business transaction. Which is why we have arbiters who hear both sides of a story and settle the matters. You can't say "Payment reversal is an open invitation to criminals to steal from sellers." and make payers unilaterally liable for every payment they make. That is a recipe for killing a market.

In your friend's case PayPal acted as an arbiter and given that the seller had no proof of sale PayPal made a judgement call to side with the payer. The harsh reality is your friend should have been more careful or said only-cash-accepted.

[ramesh31]

>Are there plans to build equivalent features on Blockchain for crypto currencies?

The entire plan of crypto is to not ever allow that. That's the big innovation.

[_Nat_]

> That's the big innovation.

You're right that a lot of folks don't want features like that, though I just had to point out that this isn't an "innovation" by any wild stretch of the imagination, but rather simply a policy in some implementations.

It's mutable, too, for both banks and crypto: either could allow/disallow such a policy if those involved cared to make it work that way.

[saba2008]

>simply a policy in some implementations

Reversals would mean that there is some authority that can declare arbitrary transaction to be valid or not, and cryptocurrency is exercise in creation of payment system without such trusted party.

So no, would not call it simply a policy.

[_Nat_]

It's definitely a policy, in that it's a design-decision that could be changed to make it operate differently. For example, if a good majority of a crypto-currency's miners elected to fork to a new policy, then it'd just happen.

And cryptocurrency isn't really about lacking a trusted-party so much as decentralizing the trusted-party. Which might sound pedantic, but it's an important distinction: there can be an authority that makes decisions, just it'd be decentralized.

Future crypto-systems, e.g. probably a next generation that'll replace early systems like Bitcoin, would probably take a smart-contract approach. For example, a payment could be reversed under conditions encoded in a smart-contract.

A well-developed system would likely end up including a system of checks-and-balances, appeals, manners of collecting evidence, etc., where trust is decentralized.

For example, most folks would generally agree that a mature, well-developed system should allow someone to recover funds extracted from them under threat-of-violence if everyone agrees that that's what happened. That current systems are too limited to make such an obviously-desirable thing happen is an obvious non-ideality. Once someone makes a good system that fixes such problems, in a generally agreeable way that people can trust, it'll likely become a preferred system; it and its clones, etc., would displace older systems, and this whole no-reversible-transactions thing would become a minor footnote in early history.

[saba2008]

>isn't really about lacking a trusted-party

It's also about minimizing amount of trust to that party. Only thing bitcoin miners are trusted, is determination of correct chronological order of transactions.

>smart-contract approach

Yes, and smart contract will just determine whenever transaction was made under threat of violence!

>end up including a system of checks-and-balances, appeals, manners of collecting evidence

So regular banking, under other name.

Also 'collecting evidence' is pretty much incompatible with anonymity, which is cryptocurrency distinguishing feature.

>trust is decentralized

How is that even supposed to work? Do you expect that every chargeback will be investigated by every mining pool? Or they will have some authority to do it (again, no difference with regular banking)

>most folks

Most folks are ok with current banking system. Cryptocurrency is a niche product, having completely different trade-offs.

[theli0nheart]

Paying by cash is irreversible. That’s how payments were until credit cards and the Internet came along.

One of the big innovations of cryptocurrency is allowing for electronic, cash-like payments. To solution to coercing a “reversal” of a transaction is use the legal system.

[Nursie]

One of the big innovations of non-crypto payment methods over cash was the ability to reverse.

> To solution to coercing a “reversal” of a transaction is use the legal system.

Or, just maybe, we could have a system which doesn't need to involve the legal system every time, and protects consumers anyway.

Which we have.

[theli0nheart]

> Or, just maybe, we could have a system which doesn't need to involve the legal system every time, and protects consumers anyway.

You omitted the part where this solution requires a surcharge of ~3% on every single transaction we make with our credit cards.

In a civilized society, this is how transactions work:

You research the merchant and judge whether they are trustworthy. You decide they are, and purchase an item from them. If you have a problem with the item, you request a refund. They ask for the product back, and then they send you the refund.

Nothing in the above paragraph requires a credit card processor to enable a reversal of funds.

If they refuse to provide a refund, that is their choice, but relying upon a central god-like money authority to judge whether they made the "correct" one is bonkers. That's under jurisdiction of the law.

[Nursie]

That’s not an issue in my country where fees are limited.

In your civilised society I will never, ever use a new merchant or a small merchant. One vendor that promises easy refunds would be the only place I would ever shop. Small vendors and new vendors can go hang. Hell, it might just kill internet shopping all together.

In your civilised society, small business is f*cked.

In your civilised society a person who has been ripped off by a merchant who refuses to deal with them or just plain disappears, has to spend time and more money dragging them through the courts, if they can even find them.

Your ‘civilised’ society is carte blanche for unscrupulous merchants to rip people off, something which humanity has been dealing with since the dawn of history.

We have these systems in place for a reason, and it’s to stop uncivilised merchants from doing what they’ve been doing as long as merchants have existed.

You don’t have to take credit cards, by the way, but don’t expect my business if you don’t.

[theli0nheart]

> In your civilised society I will never, ever use a new merchant or a small merchant. One vendor that promises easy refunds would be the only place I would ever shop. Small vendors and new vendors can go hang. Hell, it might just kill internet shopping all together.

What if that merchant was your friend? Or someone you knew personally? What if the merchant was recommended by someone you trust, like how small business has worked for millenia?

Otherwise, yes, you're right, you shouldn't buy things from people you don't know and/or don't trust, even with the ability to request a chargeback. That should never change.

> We have these systems in place for a reason, and it’s to stop uncivilised merchants from doing what they’ve been doing as long as merchants have existed.

No, that's not at all why these systems are in place. They would never have come to be had the U.S. Congress not passed the Fair Credit Billing Act in 1974 [1], which essentially outlined the mechanics of chargebacks, amongst other billing "errors".

To boot, consumers aren't a blameless party here. Fraud has existed on both sides of transactions since trading was a thing.

[1]: https://en.wikipedia.org/wiki/Fair_Credit_Billing_Act

[Nursie]

> What if the merchant was recommended by someone you trust, like how small business has worked for millenia?

Well that’s rather the point, unscrupulous merchants have been a problem for millennia.

> Otherwise, yes, you're right, you shouldn't buy things from people you don't know and/or don't trust, even with the ability to request a chargeback

Goodbye internet shopping then, massive restraint of trade incoming.

Consumers are not blameless, but the power imbalance and the ability of merchants to take the money and run has echoed through time, it is disproportionate. The answer is not to kill trade by removing protections because that benefits neither party.

Your act may have been significant in the US, the UK had a consumer credit act in July of that same year which sets out the responsibilities of parties to a loan, which credit card providers are. However that is not the totality as such systems exist beyond credit arrangements and they exist explicitly for consumer protection from unscrupulous merchants.

(Edit - Tbh in your world I see a marketplace like Amazon emerging, that has clawback contracts with its sellers, and provides similar one-sided refund facilities to consumers as current cards. Little would practically change, except that there would be even less room for competition)

[m3kw9]

Sort of reminds me of killing flies with a tank gun, they have done hard forks of the block chain for huge sums before.

[BelenusMordred]

> I am yet to work with a payment method that does not support reversal

Strange, because from your comments you are based in India and there's simply no way to reverse a bank transfer there or in my own country, can you confirm this? What I've read over the years suggests the complete opposite of what you've said.

A brief internet search brings up:

> Adhil Shetty, CEO & co-founder, Bankbazaar.com, says, "The most important thing to understand is that if a transaction has been made, the bank cannot reverse it from its end without approval from the beneficiary. Bank can only act as a facilitator."

https://www.businesstoday.in/personal-finance/banking/story/...

> According to the Reserve bank of India, it is the senders responsibility to link and transfer money correctly by cross checking the account number and name of the beneficiary. Banks will not be held responsible.

https://www.allonmoney.com/banking/money-transferred-to-wron...

[vishnugupta]

Semantically you are right, however there's more to it.

Bank transfer can be invoked within the context of a business transaction (e.g., buying on Amazon) or as a standalone payment with no context attached to it.

In the first case, the money goes through many intermediaries such as payment gateway, merchant, acquirer, etc. In this instance, a customer can dispute a payment at different levels beginning with the merchant (or marketplace), their issuer, and finally file a case in the consumer court. 90% of the disputes get settled by the merchant/marketplace. Issuers typically side with the consumer because their primary customers are consumers. Consumer courts take time to settle a dispute, but they do work.

It's possible for fly-by-night sellers to con a bunch of customers but it's rare. Because payment gateways and acquirers have gotten their act together in recent years and they do stricter KYB checks (Know Your Business).

The bulk of the theft happens through person-to-person bank transfer, i.e., devoid of any business context. Here, the fraudsters con a gullible person to reveal bank credentials and also second-factor auth. Social engineering attacks are also common. But the thing is you always know the destination bank account. So you can track the fraudster as the destination bank would have done a KYC. The key point to note here is that the money can always be physically traced. And there are laws that let victim claw back that money if they can provide sufficient evidence of fraud.

[Tenoke]

My bank also in theory supports reversing transactions but last two times I've asked them to they didn't do it anyway.

Anyway, there's no issue with building and using a service to handle that for you both on top of the currencies and as a smart contract on the blockchain itself. Most current crypto users just don't seem likely to use it as they prefer the control. This might change as the audience changes.

[berdario]

> To begin with there are several layers of protection built in at acquirer, issuer, network and so on. Almost at each step there's an option to reverse the payment (or issue a compensating transaction) and finally the chargeback and legal recourse

I'm vaguely aware that there are several checks at the different layers... but I'm puzzled, are there really options to reverse payments at all those layers?

I'm asking, because I've seen multiple times some surprising transactions/unapproved transaction/forgot to cancel a recurring payment...

and, each and every time... the e-money institution/bank/credit card provider, was unable to do anything, until the transaction actually posted.

i.e. while the transaction was still shown as "pending", I couldn't do anything (besides contacting the seller, which obviously wouldn't do anything). Each and every time (when I couldn't eventually get a refund from the seller), I had to wait for the transaction to be posted to be able to file a chargeback

[wyldfire]

> Are there plans to build equivalent features on Blockchain for crypto currencies?

No, transactions are irreversible by design.

If you want this, what you need is an escrow service. Escrow services can conduct transactions in bitcoin or other cryptocoins. I don't know of one, but I believe that they may exist.

[drcode]

Ethereum has had a couple of reversible payment systems built over the years, but nobody used them. Non-reversible, immediate, guaranteed transactions are just more convenient outside of a few edge cases

[ubercore]

As kind of an outsider to a lot of things payment and crypto, just a normal consumer, I feel like this is a scenario where you don't know you're an edge case until it's too late.

[pc86]

"A few edge cases" including the fact that a sizeable chunk of the population will go through extremely convoluted means to steal from you, especially in the case of non-reversible, immediate, and guaranteed transactions?

[user-the-name]

Similarly, outside of a few edge cases, it is a lot easier and cheaper to build a house with no fire protection whatsoever.

[saalweachter]

Brakes just make the car go slower or even stop, but the entire purpose of a car is to go and go fast.

[jpmattia]

> I am yet to work with a payment method that does not support reversal (except for physical cash).

I'm not sure I get your objection: Physical cash is exactly the use case for bitcoin.

There will be financial services and other layers built on top of bitcoin, just as it is done for the dollar, and we are seeing the nascent industry now. (Whoever provides insured services first is going to make a mint.)

[raesene9]

I thought Bitcoin was more a store of value (e.g. analogous to gold) than a currency similar to physical cash?

If so the problem becomes, is your personal security up to defending attackers who want to take your pile of digital gold.

[jpmattia]

> I thought Bitcoin was more a store of value (e.g. analogous to gold) than a currency similar to physical cash?

Physical cash is money, and serves the functions of money (see eg https://en.wikipedia.org/wiki/Money#Functions)

Bitcoin does the same.

In the nascent crypto world, different areas are using this new money in different ways: The US currently tends to store of value. Other areas (Venezuela, El Salvador) are tending toward medium of exchange.

In any case: OP's reversibility-of-transactions is a financial services function, not a "money" function.

[cortesoft]

Yeah, this is the part of the cryptocurrency I don’t understand… i feel most people are way more likely to need to have a charge reversed because of fraud than to have some payment to them reversed in fraud…why would we want to make the more likely situation impossible to protect against the more rare situation?

[morpheos137]

Well obviously core users of Bitcoin like ransomware artists don't want their gainz reversed. Most people who really use (as opposed to hodl) bitcoin outside of speculation are criminals.

[Cthulhu_]

This article reads like an advert for this service (casa) pushing for similar bank guarantees / insurance as traditional banks, so er. Yeah basically the same thing. I mean if someone steals your cash money there's no way to get it back either.

[rchaud]

> Or do their users have to go through the same painful failures?

This might actually be the first time for people to learn these lessons. They've been free-riding on the protections that banking regulations provide for all of their lives.

[geofft]

To be fair, they haven't been free-riding. Credit cards force prices up by about 3% for a reason, and checking accounts don't give you market yields for a reason.

But yes, for me personally, I much prefer deterministically losing 3% to risking 100% (and incentivizing physical attacks).

[rchaud]

Fair point. The only places where you can pay a lower price when using cash is at small convenience stores.

[joseluis]

yes, it's being worked on, but it's only apparent if you know where to look, that means in business oriented blockchains. This could be a good starting point: https://coingeek.com/stefan-matthews-on-hashing-it-out-episo...

[chrisseaton]

> I am yet to work with a payment method that does not support reversal

Is CHAPS reversible? I don’t think it is. Or is it just not exposed as an option to institutions?

[jonahbenton]

Most of these systems are not actually reversible at the protocol level. They sometimes offer cancellation at stages prior to settlement. When needed, transactions are most often "reversed" at the governance level.

[heavenlyblue]

Bitcoin is reversible on the same level then.

[rjmunro]

If someone dies with their bitcoin password locked in their head, you can't get the account passed to whoever is named on the will, the coins are locked forever.

Maybe a smart contract could help here. If there are no transactions on a wallet for more than some time period, allow the wallet to be unlocked or transferred to a trusted party.

[anm89]

Cash does not have charge backs