[pcthrowaway]

People on hacker news ask all the time for a use case for crypto. This is it. Irreversible transactions. If the client was paying with crypto, there would be no danger of reverting their transactions.

Also, Upwork should drop their 'cut' of the contractor's work if they want them to work to pay back Upwork

[Wowfunhappy]

We've purposefully built the financial system to allow for reversible transactions, because it protects consumers and reduces crime. If the client had paid with stolen crypto (as they paid with a stolen CC), then, yes, the freelancer would have been paid, but the person whose money was stolen would have been screwed.

If we wanted to build a financial system without those safeguards, we could do that, without using as much electricity as all the world's datacenters combined.

[josephcsible]

> If the client had paid with stolen crypto (as they paid with a stolen CC), then, yes, the freelancer would have been paid, but the person whose money was stolen would have been screwed.

Since delivery of products/services isn't reversible, all that making transactions reversible accomplishes is changing which party gets screwed when there's fraud.

[Wowfunhappy]

Agreed! But my base assumption is that suppliers are generally better-equipped than consumers to absorb sudden, unexpected costs.

But I also feel this is all extraneous to the larger point, which is that we can set up a fiat-based finance system in whatever way we feel, just like we could develop a blockchain-based system that allows transactions to be reversed under certain conditions. I'd like to use the one which releases an order of magnitude less carbon.

[tyingq]

>it protects consumers and reduces crime

I don't think it reduces crime. The merchants bear the cost, and have no power or information to go after the criminals.

I think it actually encourages crime. The banks and credit card companies aren't going after people when the merchants bear the costs. The criminals get to keep the goods and services they bought with the stolen credit cards. This case seems to be a typical example.

[Wowfunhappy]

Okay, then lets do away with reversible transactions! I would have assumed it was the banks who bore the cost in the majority of cases (which makes sense, since they have the most data to detect fraud and are the ones who are supposed to be doing due diligence), but I don't know enough about this industry.

But, let's do it without a blockchain that wastes massive amounts of carbon.

Edit: Just to be clear, I'm not advocating making transactions permanent. It's an "if this, then that".

[tyingq]

The current system does protect consumers. Just saying it does not reduce crime. It just shifts who the victim is.

[Dangeranger]

Irreversible transactions mean irreversible fraud. How does crypto solve for that?

The solution here is to go to court, or more likely arbitration on this case.

Crime continues to be part of business, you must account for it in your use cases, or you will get caught off guard.

[hbbio]

You're both right.

Irreversible transactions by default seem a good thing.

Court/arbitration is the right way when things go wrong.

[wpietri]

Exactly. This is a great example of where cryptocurrency has a relative advantage. If I'm looking to defraud, I'll prefer to do it via cryptocurrency because once I have the money, it's hard to get it away from me. That helps explain why fraud is so common in that space.

It's easy to see that cryptocurrency is a big reason ransomware has spiked in recent years. I suspect the same is true for other sorts of financial crime. I'd love to know how much. But it's surprisingly hard to do a telephone survey where you ask people about their criminal choices, so I expect I'll never know.

[oblio]

There are legitimate reasons for reverting transactions, they're frequent.

Another lack of use case for crypto :-)

[CPLX]

As written, this story also includes a part where someone was using someone else's credit card without permission.

The magical crypto future we've all been waiting for is that the guy who paid $12,500 to a freelancing platform for something he had nothing to do with and no knowledge of should get stuck with the bill and everyone should move on?

[pcthrowaway]

Which is different/worse than the current situation where the author is being stolen from without even having the ability to vet their clients the way the intermediary does?

[CPLX]

Yes of course it’s worse.

The author is a businessperson who’s job it is to make decisions about how to get paid for their work.

The person in question assuming the story is true as stated is totally uninvolved and innocent and just lost $12,500.

I mean in general if people have payment methods others can use with absolutely no recourse that’s a bad thing. This isn’t a super complicated concept.

[pirate787]

It is hardly a use case for the original cardholder, who had $12,000 stolen from them.

[pcthrowaway]

We have no details about what actually happened, perhaps a business relationship gone sour, perhaps the client was using their parents' credit card, or perhaps it was in fact stolen (though it's questionable that the charges would happen for so long if this is the case).

Regardless, irreversible transactions would be more like cash payments. People seldom go around with their private keys for $13000 on paper in their wallet, (though a password protected hardware device would grant similar freedom with less risk), and if they did and it got stolen, it would be up to them to try to move the funds before the thieves do.

I'm not denying that a shit-ton of crypto theft happens, but in this case it seems like there's more to the story than we're getting. If the client had been paying with crypto, it mean they had undeniable access to the funds. Again, it doesn't mean the funds weren't stolen, but I have yet to hear of a case of a recipient of stolen crypto being asked to pay it back.

I'm wondering if there's even precedent for this. As a business owner, if someone walks in and pays cash for goods, then someone else walks in and says the person who just paid you used stolen funds, are you obligated to pay it back? If so, haven't you just been stolen from?

[kergonath]

Irreversible transactions won’t solve the “send us the money back or we’ll send the lawyers” problem.