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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

#181

Post by olalonde »

giaour wrote: post #154
devit wrote: post #105

How can a Bitcoin transaction be fraudulent? They are irreversible and if the Bitcoin is stolen that's not the merchant's problem. The whole point of Bitcoin is to eliminate the possibility of chargebacks and thus the need for merchant to care about whether the buyer is in good faith and whether the money is stolen.

> They are irreversible and if the Bitcoin is stolen that's not the merchant's problem. This seems consistent with the bitcoin ethos but incompatible how the economy and legal system work. If someone buys a physical item from your physical store with a hot check, a stolen credit card, or marked bills that were just stolen from a bank, you don't get to keep the money, even if police aren't able to recover the item you…

I do believe that you get to keep cash. I don't think I've ever heard of an instance of "dirty cash" getting seized back from a merchant. Do you have an example of that?

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

#182

Post by mindslight »

Beltalowda wrote: post #75
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…

Steam marked me as a "fraud" because I used my European Revolut card to try and make a purchase when I lived in Indonesia. I get that they don't want European people to pay Indonesian prices through a VPN or whatnot, but I was living in Indonesia and living off a local salary; I thought marking me as a "fraud" was rather harsh; with the increased ease of international banking there are loads of cases where this is pe…

I think you figured it out. In general "fraud" gets used as an abstraction-primacy obfuscation term just like the more extreme "identity theft". The claim is obviously not akin to credit card fraud, and Valve doesn't describe the mechanics of what they're calling "fraud". So it's likely the one of the least offensive possibilities - like routing around their regional price discrimination. Which would make perfect sense as there's no identifying metadata tying a payment source to a location in the way that say a credit card does. Of course from the customer's perspective this is simply making the market more efficient, and I'll make sure to play my tiniest violin.

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

#183

Post by anonporridge »

doomroot wrote: post #164
marcus_cemes wrote: post #155

Earlier quoted context omitted.

> There are many context where a 0conf tx makes sense, mostly IRL. I'm curious, like what? To me this is more like "someone wrote a cheque but there's no guarantee that they'll give it to you".

Anything where the buyer doesn't leave 15-30 mins after making the payment or the purchaser is id'd.

This is why it's always been absurd to believe that standard retail purchases would be regularly done with layer 1 base chain transactions. You can't even say that you're ok with waiting for 1 block confirmation, because the time between each block is only an average of 10 minutes, with high variance. It's fairly common to experience over an hour between blocks, or as little as a minute.

The security and confirmation of a transaction is not a function of number of blocks, but time since inclusion in a block and total amount of work (hashes) piled on top of your transaction. Generally, 6 blocks (1 hour on average) is considered sufficient certainty of immutability for normal functioning of the blockchain (i.e. not under active attack). One hour for final, and completely irreversible, settlement is absurdly fast in the context of the traditional financial system, which takes days at least for final settlement, and can be much longer for some international transfers.

Small, individual scale purchases only really make sense to do on higher layer transaction protocols, like lightning network (non-custodial and open) or some custodial networks (like a bitcoin backed Visa credit card).

The only model that makes sense for bitcoin is the layer one base chain is a settlement network, with payment networks build on top that aggregate many transactions into one on chain transaction. Think OSI model for networking.

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

#184

Post by anonporridge »

alickz wrote: post #161
marcus_cemes wrote: post #155

Earlier quoted context omitted.

> There are many context where a 0conf tx makes sense, mostly IRL. I'm curious, like what? To me this is more like "someone wrote a cheque but there's no guarantee that they'll give it to you".

I only have a layman understanding of bitcoin, and I've never used a cheque in my life, but would it not be more like "someone wrote you a cheque and there's no guarantee it won't bounce when you try to cash it in"? Which, again maybe showing my complete lack of knowledge of cheques, is how I thought they worked in the first place.

Watch "Catch me if you can" for some fun history on bank cheque fraud.

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

#185

Post by ipaddr »

doomroot wrote: post #107
ipaddr wrote: post #63

Earlier quoted context omitted.

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.

Have you tried lightning network its extremely fast and cheap and pretty reliable these days. Many great mobile wallets support it now, Blue wallet, Muun, Phoenix. Hell even Cash App supports outgoing lightning payments now. Scan a QR code few seconds later done, final, irreversible.

I haven't I'm use to having an account on an exchange and moving money directly to the account.

Is there a way I could use the lightening network directly if my exchange doesn't use it behind the scene?

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

#186

Post by exitb »

doomroot wrote: post #143

Context on what I believe they mean by "fraudulent". Steam back in the day used to accept 0 confirmation bitcoin spends. This means that the transaction has been gossiped on the bitcoin p2p network but had not yet been mined into a block and thus had minimal finality guarantees. Steam could see that they were going to receive a bitcoin payment (when the transaction was mined into a block) and would credit the users a…

Shouldn’t it make most sense in contexts exactly like Steam, where the merchant can take the goods back in case of a fraudulent transaction?

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

#187

Post by [deleted] »

marcus_cemes wrote: post #155
doomroot wrote: post #143

Context on what I believe they mean by "fraudulent". Steam back in the day used to accept 0 confirmation bitcoin spends. This means that the transaction has been gossiped on the bitcoin p2p network but had not yet been mined into a block and thus had minimal finality guarantees. Steam could see that they were going to receive a bitcoin payment (when the transaction was mined into a block) and would credit the users a…

> There are many context where a 0conf tx makes sense, mostly IRL. I'm curious, like what? To me this is more like "someone wrote a cheque but there's no guarantee that they'll give it to you".

[deleted]

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

#188

Post by gruez »

jayd16 wrote: post #180
gruez wrote: post #166

Earlier quoted context omitted.

> First off, why not? Why would you doubt that when they're a massive storefront and deal with fraud of all kinds? 1. The anti-fraud tech used for credit card fraud (ie. stolen credit cards used for unauthorized transactions) don't really translate well to the fraud described here (ie. stolen cryptocurrency). 2. it makes sense for ecommerence merchants to do anti-fraud stuff, because they're on the hook for fraud. th…

>blacklists They wouldn't be blacklists. You only learn after the fact so its more about the analytics. >I'd tell them to fuck off. Well that's nice but if you get paid with stolen money, you don't just get to keep the money and tell them to fuck off. Steam would be liable to return the funds.

>They wouldn't be blacklists. You only learn after the fact so its more about the analytics.

I mean, that goes back to my original question, why would they do this? Does bestbuy run analytics on the cash they receive to see how much % of their cash purchases were "fraudulent"?

>Well that's nice but if you get paid with stolen money, you don't just get to keep the money and tell them to fuck off. Steam would be liable to return the funds.

IANAL, but I thought this only applied to stolen goods, not cash? I heard of authorities seizing cash when they raid a drug house, but not randomly seizing people's cash because they happened to carry a bill that was involved in a bank robbery.

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

#190

Post by squeaky-clean »

rosndo wrote: post #111
NicoJuicy wrote: post #100

Earlier quoted context omitted.

Yes. What do you think a chargeback is?

Literally nobody offers a service to check if specific coins were bought with a stolen credit card. I know what a chargeback is, and those are utterly irrelevant here.

That's not what they said at all though. Have you never been traveling and had your CC declined and your bank immediately calls you to verify the purchase? Credit cards do have checks in place to immediately flag them as fraudulent. This is not related to bitcoins and they never said it was.

On top of that, if you use a stolen credit card to buy a steam game and the original owner files a chargeback, your entire steam account gets banned. So yes it's extremely relevant here.

If instead you buy BTC on an exchange and then spend those BTC on steam, it's less likely to be flagged as fraud (at the time) because the BTC is purchased from an American website. Then you spend the BTC on steam. Then once the credit card is reported as stolen and a chargeback filed, it's the crypto exchange who gets hit. The chargeback is never associated with Steam and you can buy Steam games from a lower-priced market without the CC company ever being aware.

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