[rglullis]

> no chargebacks just means the customer now has no recourse from a fraudulent vendor.

This is the realm of the social layer, not the technology. You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.

> It's also possible to get no fees for micropayments

Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).

> and no currency conversion fees with a more traditional virtual currency, crypto only adds costs on top of that.

Problem statement: you are a software company in the UK and you want to contract a developer based in Argentina. She wants to receive (in Pesos) the equivalent to 500GBP.

Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.

[shatteredgate]

>You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.

I don't understand how this follows at all, the only thing you've added here is that you can't get your money back if the "cheap and fast content" turns out to be a scam. I can't understand why anyone would want this to be optional.

>Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).

This would be any virtual currency where you buy it to spend directly with the market operator, the kind you see on prepaid cards in retail stores. That's in the context of a vendor like OnlyFans that runs a marketplace of sorts; if you consider that to be a middleman and you only want some completely peer-to-peer solution then that's a different question with different risks from what we were originally discussing, and most cryptocurrency doesn't fit that definition anyway.

>Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.

I'm not really interested to search around for every exchange I can find and make a comparison, but I would be very skeptical of any crypto-based solution claiming they can lower fees here. The costs of doing bank transfers are the same regardless of whether you use crypto as the medium to move the money. There's probably something else they're doing.

This is getting towards my main problem with these crypto conversations, we're moving away from what the technology actually brings and instead we're getting into only comparing fees without considering any of the other details of what we're actually doing. I find this to be a pointless angle to take; there isn't going to be a period where we use cryptocurrency and we can totally avoid fees, because an explicit goal of every cryptocurrency I've seen is actually to make it so participants can't avoid paying fees. And when you get into smart contracts, every participant can now start acting as a middleman and charging more of their own fees in addition to the transaction and gas costs you pay to the network.

[rglullis]

> I can't understand why anyone would want this to be optional.

If someone can make a living by selling e-books/blog posts/Photoshop paint brushes for cents on a dollar to hundreds or thousands of different people - all this person needs is to have people who are willing to take the risk of losing cents of a dollar. When these people pay for the person and actually get what they were expecting, the producer gets the money and the consumers got what they wanted and will then vouch for the producer's honesty.

And if the person is not honest, all it will take is for a few people to lose a small amount of money which is simply not worth fighting for, but it is enough to get those victims to warn others about the scam.

> the kind you see on prepaid cards in retail stores.

This includes middlemen and friction. It's a non-starter as a real alternative to simple payments via crypto.

> I'm not really interested to search around for every exchange I can find and make a comparison.

You really should, because that would be a huge lesson for you and everyone else that criticizes crypto without taking a look at the actual reality of a lot of people.

I specifically used Argentina for a reason: Argentina has strict capital controls and a handful of different exchange rates. If you are an exporter, the central bank converts USD/ARS at one rate. If you are importing, at another. If you are an investment bank at another. "Retail" does not even get to be able to convert money, so they all need to resort to the black market. The difference between the "official" rate and the black market is ~15%. So, someone that wants to receive ARS from someone sending USD (or GBP/EUR...) they will be facing a 15% cut just to be able to cash out.

[shatteredgate]

>And if the person is not honest, all it will take is for a few people to lose a small amount of money which is simply not worth fighting for, but it is enough to get those victims to warn others about the scam.

I am sorry but I don't consider it a positive that someone can clandestinely scam people out of lots of small amounts of money and the only thing an ordinary customer can do is wait until someone else more knowledgeable notices it and then hope they warn everyone and have enough resources to put together a class action suit or just accept that their money is lost because maybe it was too little to care about. At best, this is no better than the current system when using sketchy non-crypto payment systems; at worst, it's asking customers to shelter all of the risk of the product being a scam.

>This includes middlemen and friction.

The point here is that to the market operator, it's actually less middlemen and friction than crypto, they operate the currency directly and so there is no fees for them. It seems like you're shifting from the perspective of the market operator to the customer, but that's not what I was discussing, and it's also not true of most cryptocurrency anyway.

>You really should, because that would be a huge lesson for you and everyone else that criticizes crypto without taking a look at the actual reality of a lot of people.

I don't think it would help because it doesn't explain why the fees would be lower. That's the only question I'm interested in, as far is this hypothetical conversation is concerned. I can pull up a lot of numbers but that's not really giving a full picture. Your description seems to suggest this is illegal in Argentina and you'd be asking your employee to commit a crime, so I suppose that answers my question.

[rglullis]

> clandestinely scam people (...) and then hope they warn everyone and have enough resources to put together a class action suit

Do you have any idea of how much money is lost on scams via Western Union? Or how much money companies spend on fraudulent ad views? Insurance fraud?

Before you cry "this is whataboutism", the point I am trying to make is that every security/insurance system is designed around a risk/benefit analysis. There are some situations where the cost of having these systems is simply not worth the value of the transaction, so why should we use it?

Conversely, should we kill every business opportunity just because the cost of avoiding scammers and ill actors is too high? Do you think that Craigslist should be drowned into a see of ineffective regulations because of all the scammers that are there, or should we try to educate people around the potential pitfalls and let it operate in a more organic form?

> The point here is that to the market operator, it's actually less middlemen and friction than crypto

Absolutely not. If I want to sell something online and I accept crypto as payment, I can do it without any middlemen. The only "friction" the user faces is to open the wallet (or scanning a qr code) and pressing "send".

Gift cards force the user to commit to an initial higher amount and to a specific vendor. It's a whole different league.

> I don't think it would help because it doesn't explain why the fees would be lower.

Because you'd be bypassing the central bank, and you would be negotiating with other people who are also trading with the rates from the "blue" dollar (the non-official market). Nothing illegal. Kraken (a crypto exchange) operates on Argentina for years already and any "retail" account can trade there. It's just that the volume there is not big enough yet to make the government greedy about it.

[lmm]

> Do you have any idea of how much money is lost on scams via Western Union?

Which is why we try to move away from that kind of thing, and part of why we're seeing stricter KYC, 2FA requirements and so on. Consumer protection is a hugely valuable part of civilised society, but funding it is a prisoner's dilemma - if you make it optional then people make the individually rational choice to skip it, which is fine until you reach a tipping point where so few people are opting in that the market allows scammers to thrive.

> Do you think that Craigslist should be drowned into a see of ineffective regulations because of all the scammers that are there

Really objective phrasing there lol. No, I think Craigslist and the like should be subject to effective, proportionate regulation (and, sure, in some cases that might mean shutting down a marketplace where there's simply no way to run it and have it not be full of scammers, and I'll defend that as the right decision for the overall public interest), and I believe government for all its faults is better at doing that than blockchain operators.

[rglullis]

> I think Craigslist and the like should be subject to effective, proportionate regulation.

In theory, "effective, proportionate regulation" would be great. In practice, we get systems that promote the Surveillance State, regulatory capture and Crony Capitalism, and the implementation of "one-size-fits-all" solutions that eliminate all options to have local autonomous communities.

> Consumer protection is a hugely valuable part of civilised society.

Like I said in the top comment: it's not an either/or proposition. I don't think that blockchain/crypto/decentralized solutions need to replace the existing solutions to be worthwhile. They are worthwhile because they increase our optionality and work as an hedge.

A "civilized society" that requires all people to be subject to the same rules all the time and can not withstand ambiguity and context analysis is a fascist one. The more you see people pushing for this idea that blockchain should be eliminated, the more you will see other people realizing how much it is needed.

[shatteredgate]

>Do you have any idea of how much money is lost on scams via Western Union? Or how much money companies spend on fraudulent ad views? Insurance fraud?

I'm fully aware, that's why I'm upset that the entire design of crypto seems to be either punting on this problem (to the "social layer" as you said) or is just intentionally making it worse (ransomware). This is not a revolution I can get behind.

>There are some situations where the cost of having these systems is simply not worth the value of the transaction, so why should we use it?

I mean, this doesn't really give any confidence in the value of your transaction if it's so worthless to even matter. Doesn't this just seem a bit fishy to you? After talking to a lot people, I don't think any self-respecting creator online wants to exist in that space for any longer than they have to because it's rife with scams. It's certainly not making me want to drop any money on micropayments any time soon.

>If I want to sell something online and I accept crypto as payment, I can do it without any middlemen.

Well this isn't true, the network itself and the miners (or whatever) is still the middleman. With a currency the vendor operates, there is no middleman at all, you control the whole money supply. Yes the customer still has to pay a form of "exchange rates" when taking cash in and out but that's the same thing as crypto.

>Gift cards force the user to commit to an initial higher amount and to a specific vendor. It's a whole different league.

Again you're changing the discussion to the customer, not the market operator. I don't think this is a reasonable comparison to make because now you're not talking about having a service like Onlyfans any more, you're talking about having entertainers sell directly to customers, which is also a whole different league, probably one that has higher fees because now the creator will likely want to charge more as they now have to offset many other extra costs.

>Because you'd be bypassing the central bank, and you would be negotiating with other people who are also trading with the rates from the "blue" dollar (the non-official market). Nothing illegal. Kraken (a crypto exchange) operates on Argentina for years already and any "retail" account can trade there. It's just that the volume there is not big enough yet to make the government greedy about it.

I still fail to see what the actual practical benefit of crypto here is if the only situations it's really useful is a place where the government has made low cost international bank transfers illegal and you just have to hope they don't come after crypto even though you know they will eventually. It's essentially being propped up by a central financial authority; isn't that the opposite of what crypto is supposed to be?

[rglullis]

> This is not a revolution I can get behind.

Read again my very first comment. It does not need to be a "revolution" to be useful. As long as it is can be really useful to some people some of the time, it is already valuable.

> After talking to a lot people, I don't think any self-respecting creator online wants to exist in that space for any longer than they have to because it's rife with scams.

Sorry, that is BS. Plenty of "self-respecting" businesses and people are willing to work just for the expectation of money through advertisements, why wouldn't they work for micropayments?

And again, the idea is to have another option, not to have an all-encompassing solution. It does not have to be a binary choice.

> Again you're changing the discussion to the customer, not the market operator.

Markets do not exist in a vaccum. The whole point of credit cards is that it makes the transaction easier/faster/cheaper for the consumer, so of course you need to look at the solution as a whole.

> the network itself and the miners (or whatever) is still the middleman

No, the network does not charge a proportion of the transaction costs. They provide a service. Do you count your electric company and your ISP as "middlemen" between you and your Amazon purchases?

> I still fail to see what the actual practical benefit of crypto...

Welcome to 1995: https://youtube.com/watch?v=gipL_CEw-fk