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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

#81

Post by rosndo »

JKCalhoun wrote: post #79
TrapLord_Rhodo wrote: post #31

Earlier quoted context omitted.

that doesn't make any sense. The 'fraud' in your scenario and where the point of contention lies is between the the credit card company and the exchange where it was onramped. There's no way the exchange is then going to go through the effort to track the btc to steam and say 'Hey, that transaction that didn't come from our exchange wallet was fraud i want the BTC back.' Also - That's just like fraud with extra steps…

Perhaps stolen credit cards have checks in place to immediately flag them as fraudulent?

No.

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

#82

Post by lokar »

There seems to be a basic misunderstanding on the part of the pro-btc ppl here all saying "how is that fraud?" or "how is that steams problem?"

If you run a business that can be used in a money laundering scheme, even if you are not a victim, you have a legal responsibility to try to limit/prevent that actually.

The crypto crowd may not like that, but it's not up to them.

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

#83

Post by skybrian »

trillic wrote: post #34
skybrian wrote: post #27

Earlier quoted context omitted.

Could people create fake game items and use Bitcoin to pay themselves as a way of converting it to cash? Is that a thing? So the game item and the transaction are fake, as in they’re not actually there to play games.

Yes, this is colloquially known as "money laundering". It's one of Bitcoin's most promising use-cases!

I know, I’m asking how feasible it is with Steam.

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

#84

Post by rosndo »

erk__ wrote: post #43
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…

Yes they were using the BitPay provider when they were accepting Bitcoin, I assume they were made aware of that it was possible to track the transactions back to fraudulent credit card transactions, which I guess in some way could still make them liable for it.

This is absolutely not what happened. Why come up with such crazy theories when this just comes down to double spends of unconfirmed transactions?

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

#85

Post by TrapLord_Rhodo »

thallium205 wrote: post #64
TrapLord_Rhodo wrote: post #37

Earlier quoted context omitted.

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.

Low Trade Fees, cross-colatorilization, instantanious and algorithmic liquidation.

imagine i wanted to buy Tesla. I have no money but i do have GM Stock. This allows mee to trade GM directly for Tesla stock with no actual trade fee, because the trade never occurs until i pull all my money out out of the pool.

So i am exposed to the asset without having to do the centralized exchange way of selling the asset (Incurring trade fee) buying usd. selling USD for the next asset (Incurring a trade fee) then eventually selling it back to USD when i want to utilize that asset.(Incurring a trade fee).

So, like i explained before it is a much more efficient mechanism of trading any asset. Since trading is literally the bedrock of civilization and effective capital allocation through trading is what drives prosperity, creating a more efficient trading algorithmn in crypto is one of the finest achievement of our generation even though most haven't undeerstood it's significance yet.

The soverign individual was a good book for me to recognize the need for crypto in the world.

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

#86

Post by rosndo »

Duralias wrote: post #48
kova12 wrote: post #3

What exactly does it mean "fraudulent transaction" in the context of bitcoin? It's not like you can use someone else's account number to purchase stuff.

Money laundering I'd imagine. Criminal creates shit game, buys game using crypto and gets paid out in fiat because *very* few developers would accept being paid in crypto.

This does precisely nothing to “clean” the money as it doesn’t eliminate the direct link between you and the dirty bitcoins.

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

#87

Post by j-bos »

sebzim4500 wrote: post #68
jpollock wrote: post #61

Earlier quoted context omitted.

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.

Reminds me of the old gamestop greentext

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

#88

Post by rosndo »

lokar wrote: post #82

There seems to be a basic misunderstanding on the part of the pro-btc ppl here all saying "how is that fraud?" or "how is that steams problem?" If you run a business that can be used in a money laundering scheme, even if you are not a victim, you have a legal responsibility to try to limit/prevent that actually. The crypto crowd may not like that, but it's not up to them.

The basic misunderstanding is on your part.

“Money laundering” wasn’t mentioned by anyone but you. Stop inventing things.

This is about valve getting fucked because they were accepting bitcoin payments with zero confirmations.

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

#89

Post by anonymousab »

rosndo wrote: post #74
flotzam wrote: post #59

Earlier quoted context omitted.

The obfuscation in step 2 seems very superficial. Like, is the IRS not going to ask where you got your stacks of Steam codes from?

Your bank will probably be the first one to ask, lying is a felony. (As is money laundering, of course) Also Valve will be looking for this too, as required by their bank. This is an incredibly unrealistic money laundering scheme, entirely fabricated by mr_cyborg. The truth is that the “fraudulent transactions” here are double-spends, because Steam was accepting 0-conf payments in an unsafe way.

> This is an incredibly unrealistic money laundering scheme, entirely fabricated by mr_cyborg.

Using stolen money to buy gift cards, using those gift cards to buy real things and then selling those real objects or licenses or accounts after the fact is a well known process. Substituting "bitcoin" or any cryptocurrency for "gift card" is neither unreasonable nor unrealistic.

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

#90

Post by onelastjob »

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…

LN is too complicated imo. You can just use other chains if you want fast and cheap txs. Solana, Nano, Near, any of those.
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