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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

#271

Post by sparkie »

donkarma wrote: post #246
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…

It was my understanding that RBF does not work by double spending, but by making a transaction with a much higher fee that depends on the parent transaction which means you would need to mine both to get the higher fee.

This is known as CPFP (Child pays for parent)

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

#272

Post by withinboredom »

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.

As an American living outside of America, getting non-US investment accounts is impossible, and most US banks don’t want non-residents investing, and lying about your address can get you in hot water with the IRS (are you, or are you not living in the US?).

Crypto companies follows much the same pattern and in some cases you can buy crypto but can’t cash out. If you could buy a game with bitcoin and get cash-money in a refund, this is quite viable.

We haven’t even started talking about money laundering…

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

#273

Post by freeAgent »

doomroot wrote: post #269
freeAgent wrote: post #265

Earlier quoted context omitted.

Miners can set their acceptable minimum fee levels and orphan the blocks of miners who accept transactions with fees that they think are too low. This is essentially cartel behavior with an incredibly strong enforcement mechanism. There should never be a “high fee environment” due to an artificially low block size cap.

And why can't miners do this on BCH?

That’s the point. They can. Are you reading this as me thinking the collusion on minimum fee levels between miners being a bad outcome? I think it’s going to become necessary as the block reward goes to zero, and therefore it’s necessary and good for the system. It’s nice that Bitcoin (including BCH in “Bitcoin”) has a the block orphaning mechanism for enforcing cooperation in this manner. It’s much stronger than enforcement mechanisms available to cartels such as OPEC.

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

#274

Post by space_rock »

AlexandrB wrote: post #24
space_rock wrote: post #13

This article is incoherent. Say what you like about Bitcoin but fraudulent payments are not possible. And yes Gabe is right that people in crypto are criminals running scam projects

Fraudulent payments are very much possible in the "buying stuff with a stolen credit card" kind of way. This is a much more common type of fraud than the "double spend" attacks Bitcoin protects against. Bitcoin is only resilient to fraud only if you define fraud as "violating the rules of the blockchain". Any definition of fraud that involves meatspace is possible.

Yes fraud is possible with credit cards. You correctly left out Bitcoin. As fraudulent payments are not possible with Bitcoin

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

#275

Post by Gigachad »

AniseAbyss wrote: post #204
anonporridge wrote: post #183

Earlier quoted context omitted.

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…

Instantaneous payments exist, I use them several times a day, with traditional banking. I never quite understood what problem bitcoin was supposed to solve beyond anonymity.

I'm not convinced bitcoin solves _any_ problems at all. It isn't anonymous at all, exchanges are the gatekeepers of the whole system and they have to comply with local laws. Canada was found to be directing exchanges to not allow cashing out of certain coins and putting the coins through a mixer just automatically blacklists them from being cashed out.

Bitcoin does not provide sufficient privacy which allows exchanges to freeze tainted coins and authorities to track down real identities.

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

#276

Post by elcomet »

hayd wrote: post #225
elcomet wrote: post #223

Earlier quoted context omitted.

This doesn't work,people don't know the amount to pay before they finish their meal.

You pay up front in most cafeterias for example. More likely the reason this isn't done is to allow customers to buy more (drinks/dessert, do so in a single transaction, and tip post-service. Not because the amount is unknown.

Yeah but they verify that you pay before giving you the food. That's exactly the opposite of what op was talking about.

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

#277

Post by mFixman »

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…

How would you prevent the fraudulent transactions you just posted if you accept 0 conf proof?

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

#278

Post by SkittyDog »

gambiting wrote: post #261
srcreigh wrote: post #241

Earlier quoted context omitted.

What about people who do this 10x a day to play free games forever?

You let the user do it twice then ban them from using bitcoin payments?

They already answered this question in their previous post... The fraudster scales up their account creation. You ban then after 2, they switch to a new account... which you ban after 2, and they switch to another new account, which you ban after 2... and so on, ad infinitum.

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

#279

Post by elevenoh »

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…

>Steam back in the day used to accept 0 confirmation bitcoin spends

This is ridiculous. 1 block confirmation would've prevented near-all transactions from being retracted.

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

#280

Post by lokar »

phil21 wrote: post #198
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 crypto crowd may not like that, but it's not up to them. I think you'll find many of the "crypto crowd" strongly disagree with your assessment. In fact, reality on the ground highly suggests it is indeed at least partly up to them. This is probably where the fundamental "talking past each other" happens on forums like HN.

I honestly don't know how to read that. Do you mean they think US law on money laundering is up to them? Or that a company like valve could reasonably get away with ignoring it?
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