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'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

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Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#61

Post by jpollock »

janandonly wrote: post #2

Unfortunately no details were given about what makes 50% of all bitcoin transactions “fraudulent” ? What does that even mean? * did someone try to send something other then bitcoin to a ₿ address? * did a client claim he payed and did the payment seem to fail on his end? * did a client not realise that you as payee also pay for the network fee? Nowadays these kind of problems would be easily prevented by using bitcoi…

There is substantial exchange rate risk.

If Valve didn't want to see any forex risk on the sale, they end up incurring it on refund. If people are using it as an easy way to store money in USD and then convert back to BTC when the rate goes up, that can get expensive in a hurry.

It could also be that they used Coinbase or some other provider to act as a processor, and Coinbase charged the merchant if there were chargebacks on Coinbase's accounts.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#62

Post by Tenoke »

mmaunder wrote: post #32
janandonly wrote: post #2

Unfortunately no details were given about what makes 50% of all bitcoin transactions “fraudulent” ? What does that even mean? * did someone try to send something other then bitcoin to a ₿ address? * did a client claim he payed and did the payment seem to fail on his end? * did a client not realise that you as payee also pay for the network fee? Nowadays these kind of problems would be easily prevented by using bitcoi…

“did someone try to send something other then bitcoin to a ₿ address?” Like what? Cottage cheese? Transaction failures and and fees are not fraud. The quote is specific. Regarding lightning: https://twitter.com/nikzh/status/1356335970300416001?s=20&t=...

>“did someone try to send something other then bitcoin to a ₿ address?” Like what? Cottage cheese?

Most commonly btc via lightning network to a place that doesn't support it or bch. It happens all the time.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#63

Post by ipaddr »

IgorPartola wrote: post #15

At this point is BTC a good idea? Does it actually provide any damn value at all at a macro level?

It provided a great way to buy weed before it was legalized and transaction fees skyrocketed.

Bitcoin at $5,000 a coin was extremely useful for transactions. Bitcoin at $50,000 make it less useful because of scaling issues.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#64

Post by thallium205 »

TrapLord_Rhodo wrote: post #37
paulgb wrote: post #8

Earlier quoted context omitted.

I remember a period somewhere in the 2010s where it wasn't uncommon to see a business experiment with accepting Bitcoin (as Steam did), before transaction fees made it impractical. Given the way people talk about LN, and the (quite understandable!) desire to avoid credit card transaction fees, why don't we see more businesses accepting it? (Asking this in good faith; I am admittedly ignorant about LN and have not tri…

yeah, a couple of companies in the space are experimenting with the concept of an omni-pool. Essentially, since arbitrage bots are a constant you don't need an outside oracle to ensure there's very little slippage between assets. Addititionnally, since you are swapping inside the pool it does not incur a trade fee as you aren't trading some outside entity with a confirmation time. Obviously it gets deep in math, but…

Oh cool so a centralized payment system except stupid complicated. Sounds like another winning crypto invention to me.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#65

Post by allisdust »

Duralias wrote: post #45
allisdust wrote: post #33

Earlier quoted context omitted.

Stolen credit cards are a problem for the merchant because the charges could be reversed by the bank and merchant will incur the loss. I don't see how that is even remotely possible with Crypto. How did Steam lose money ? My guess is they might be accepting it through some payment provider (so not a true crypto) who has in their T&C to be able to reverse transactions (which must be happening in Cash on the Steam faci…

It might not necessarily be that they lost money, it is possible it happened through the way you are suggesting, but opening up for crypto does mean Steam becomes a money laundering platform. Criminal creates a shit game and then uses the crypto to buy that game (with alt accounts) and since *very* few developers would be happy with getting paid in crypto, Valve has to convert it into fiat(?) currency.

That could be a problem but then that would be money laundering not fraud (and Steam won't be on hook for it - just like Amazon isn't for its gift cards).

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#66

Post by 3np »

Tenoke wrote: post #62
mmaunder wrote: post #32

Earlier quoted context omitted.

“did someone try to send something other then bitcoin to a ₿ address?” Like what? Cottage cheese? Transaction failures and and fees are not fraud. The quote is specific. Regarding lightning: https://twitter.com/nikzh/status/1356335970300416001?s=20&t=...

>“did someone try to send something other then bitcoin to a ₿ address?” Like what? Cottage cheese? Most commonly btc via lightning network to a place that doesn't support it or bch. It happens all the time.

> Most commonly btc via lightning network to a place that doesn't support it

That makes no sense - how would that happen in practice?

BCH, though, yeah. Though less so over time since newer address types aren't compatible.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#67

Post by rosndo »

mr_cyborg wrote: post #40
flotzam wrote: post #25

Earlier quoted context omitted.

But how does any of that apply to the supposed "Steam purchases with stolen credit cards by way of Bitcoin" scheme?

1. Stolen money is used to buy bitcoin 2. Bitcoin is obfuscated by purchasing things online with it 3. Those online assets can be sold for cash

No post body was provided.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#68

Post by sebzim4500 »

jpollock wrote: post #61
janandonly wrote: post #2

Unfortunately no details were given about what makes 50% of all bitcoin transactions “fraudulent” ? What does that even mean? * did someone try to send something other then bitcoin to a ₿ address? * did a client claim he payed and did the payment seem to fail on his end? * did a client not realise that you as payee also pay for the network fee? Nowadays these kind of problems would be easily prevented by using bitcoi…

There is substantial exchange rate risk. If Valve didn't want to see any forex risk on the sale, they end up incurring it on refund. If people are using it as an easy way to store money in USD and then convert back to BTC when the rate goes up, that can get expensive in a hurry. It could also be that they used Coinbase or some other provider to act as a processor, and Coinbase charged the merchant if there were charg…

>If people are using it as an easy way to store money in USD and then convert back to BTC when the rate goes up, that can get expensive in a hurry.

Why would anyone do this? In what universe is buying games and then requesting refunds easier than clicking buy/sell on coinbase/kraken/etc.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#69

Post by thallium205 »

newaccount74 wrote: post #56
IgorPartola wrote: post #15

At this point is BTC a good idea? Does it actually provide any damn value at all at a macro level?

The only real use case that people keep mentioning is transferring large-ish amounts of money (>1000 USD) internationally.

Which is not hard if you have a bank account that is in any tier above poor person consumer level.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#70

Post by dale_glass »

paulgb wrote: post #8
janandonly wrote: post #2

Unfortunately no details were given about what makes 50% of all bitcoin transactions “fraudulent” ? What does that even mean? * did someone try to send something other then bitcoin to a ₿ address? * did a client claim he payed and did the payment seem to fail on his end? * did a client not realise that you as payee also pay for the network fee? Nowadays these kind of problems would be easily prevented by using bitcoi…

I remember a period somewhere in the 2010s where it wasn't uncommon to see a business experiment with accepting Bitcoin (as Steam did), before transaction fees made it impractical. Given the way people talk about LN, and the (quite understandable!) desire to avoid credit card transaction fees, why don't we see more businesses accepting it? (Asking this in good faith; I am admittedly ignorant about LN and have not tri…

I'm not the best person to answer, but lacking better ones, here's what I know:

* LN is technically complex, and hard for a normal person to run.

* LN requires making an on-chain transaction to open a channel. It's still vulnerable to high BTC fees and limited by the chain's low capacity.

* LN still runs on top of BTC, and has all the economic characteristics BTC has. So if it's stupid to buy pizza for $10K BTC because it appreciates, or stupid to sell a game for 0.0012 BTC because the price might fall tomorrow, then LN changes nothing about that and in some cases makes it worse. LN allows a non-cooperative party to delay things, which could be used maliciously during price swings.

* It's all still happening inside the crypto ecosystem, which is unpleasant to deal with. Think of say how people tried to buy their Tesla in BTC, then asked for their money back when the price rose. Why would a merchant want to deal with that kind of thing?

LN to me is a bit like putting lipstick on a pig -- it still leaves many significant problems in place, and adds some new ones on top in exchange for the benefits it provides.

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