The optimal amount of fraud is non-zero (2022) • Hacker News Board

Re: The optimal amount of fraud is non-zero (2022)

#161

Post by mablopoule » Mon, Jan 08, 2024, 2:14 PM UTC

If you liked the content of the article, I urge you to read the excellent book "Lying for Money: How Legendary Frauds Reveal the Workings of Our World" [1] by Dan Davies, which I believe is the main source of inspiration for this article (I'm just guessing here, I have no proof of that).

I discovered this book through another great post by Patrick McKenzie, "The fraud supply chain" [2] where he heartily recommend it, and I haven't been disappointed. On top of being informative, the book is very entertaining to read.

[1] https://www.amazon.com/Lying-Money-Legendary-Frauds-Workings...

[2] https://www.bitsaboutmoney.com/archive/the-fraud-supply-chai...

Re: The optimal amount of fraud is non-zero (2022)

#162

Post by mcv » Mon, Jan 08, 2024, 2:16 PM UTC

herbst wrote: post #139

sakjur wrote: post #129

Earlier quoted context omitted.

Wouldn’t you lose control over your own money if you lost your private key?

I know nothing in IT is certain. But I am pretty sure anyone can come up with a simple (or complex) backup solution that suits them and is 99.99% safe.

It's always about that 0.01%.

And expecting people to come up with their own solutions for problems that banks struggle to solve, is going to be a recipe for disaster for 99.99% of the people.

Re: The optimal amount of fraud is non-zero (2022)

#163

Post by mcv » Mon, Jan 08, 2024, 2:24 PM UTC

makeitdouble wrote: post #104

quickthrower2 wrote: post #95

Earlier quoted context omitted.

Is this an American thing? I never get a card decline for any purchase on a credit card. Prepaid cards are another matter.

It's probably on transactions that are requested solely based on the card number, and no PIN. I got hit by these blocks with a EU card a long time ago, as the shop was trying to pass the charge with the magnetic strip. Had to phone to the VISA center to let the charge pass through on next retry. Nowadays I'd assume any "card in the machine" transaction done with a PIN would go through no questions asked, even if you'…

This is the thing that surprises me most about credit cards: you can pay with just the information that's easily visible on the card. And you share that information directly with the merchant. Surely that's a gaping security hole? I'm not surprised they need to be paranoid about fraud, if it's that easy.

When I buy something with my bank card, I always have to provide my PIN. If I buy something online, the site redirects me to my bank, where I authenticate myself with my bank's system, and then authorize the payment with my bank's system (involving 2FA), and then the bank tells the site that the payment has been authorized. The site can blindly trust my bank and can immediately ship stuff to me, because the payment will go through.

I've never had any blocks nor fraud issues with this system.

Re: The optimal amount of fraud is non-zero (2022)

#164

Post by akerl_ » Mon, Jan 08, 2024, 2:27 PM UTC

thworp wrote: post #151

akerl_ wrote: post #63

Earlier quoted context omitted.

It seems pretty clear. That article is just an example of the craziness I was describing. Notably: having a unified ID structure has a ton of upsides, and "preventing terrorism" seems fully orthogonal. Additionally, we already have IDs that register humans into databases and are tracked when people travel, it's just that the databases are disjoint and thus even more error prone because they're run individually by sta…

> it's just that the databases are disjoint and thus even more error prone because they're run individually by states. That is a huge advantadge if the federal governments ever gets taken over by totalitarians. Surely at least some states will refuse to authenticate their ID cards when requested by the feds, some may even issue fake IDs to resistance members. If the feds have a centralized database with updated infor…

Driving policy decisions based on this fanfic seems like a poor move. The federal government already has several centralized databases of residences (to pick a boring one: income tax forms).

Re: The optimal amount of fraud is non-zero (2022)

#165

Post by mcv » Mon, Jan 08, 2024, 2:33 PM UTC

avianlyric wrote: post #155

rkachowski wrote: post #137

Earlier quoted context omitted.

Allowing me to buy things via my bank account is pretty much the use case for a bank account. I have very little sympathy for the self inflicted "byzantine" consequences that result from a single valid purchase.

You don’t seem to understand, the Byzantine problems are caused by Apple. They don’t bother properly following the network rules and guidelines, as a consequence the data banks get about their transactions in order decide an approval or detect fraud is a complete and total mess. Makes detecting fraud vs legitimate transactions harder than it should be. Eh, I assume you also want your bank to block fraudulent transact…

That, to me at least, is the difference between credit cards and bank cards: the only way to spend a significant amount of money with my bank card is with my authorization. Admittedly cracking a 4-digit PIN number is not that hard, but fraud with this is hard to commit and easy to detect (because I'm missing my card). With credit cards, the information needed to authorize payment is written on the card, easily photographed, and you need to share it with the merchant you're buying from.

Of course I want fraudulent transactions to be reversed, but more than that, I want to use a system that makes fraud hard, rather than an everyday occurrence.

Re: The optimal amount of fraud is non-zero (2022)

#166

Post by makapuf » Mon, Jan 08, 2024, 2:58 PM UTC

mcv wrote: post #162

herbst wrote: post #139

Earlier quoted context omitted.

I know nothing in IT is certain. But I am pretty sure anyone can come up with a simple (or complex) backup solution that suits them and is 99.99% safe.

It's always about that 0.01%. And expecting people to come up with their own solutions for problems that banks struggle to solve, is going to be a recipe for disaster for 99.99% of the people.

Couldnt that 0.01% be solved by coming physically with a photo ID card or a passport and legal papers to some trusted employee ?

Re: The optimal amount of fraud is non-zero (2022)

#167

Post by concordDance » Mon, Jan 08, 2024, 3:14 PM UTC

tremon wrote: post #154

concordDance wrote: post #76

Earlier quoted context omitted.

There's a price for life in a given society though. Due to resources being finite and wellbeing mattering. In the UK I believe NICE uses £30k/QALY as the price.

£30k/QALY nit: pretty sure that should be £30k * QALY.

Imagine 10 km/h, the more hours you have drive the more kilometers you've driven. Similarly, with £/QALY the more QALYs you've paid for the more £ it will have cost.

Re: The optimal amount of fraud is non-zero (2022)

#168

Post by bonton89 » Mon, Jan 08, 2024, 3:17 PM UTC

xyzzy123 wrote: post #65

akerl_ wrote: post #63

Earlier quoted context omitted.

It seems pretty clear. That article is just an example of the craziness I was describing. Notably: having a unified ID structure has a ton of upsides, and "preventing terrorism" seems fully orthogonal. Additionally, we already have IDs that register humans into databases and are tracked when people travel, it's just that the databases are disjoint and thus even more error prone because they're run individually by sta…

How you feel about reliable national ids really comes down to "do you trust the state or not". Error-prone-ness is a feature for people who want the state to be less powerful. Personally I think that for purely practical reasons national ids are good infrastructure. I don't think in 2023 a "weak" national identity system offers much protection against an adversarial government.

Forget trusting the state, do you trust the endless parade of crappy companies that will demand your national ID verification to but everything from house insurance to fortnight skins to prevent fraud, and then promptly lose it in a data breech without ever receiving meaningful punishment? Because that is the state of things.

Re: The optimal amount of fraud is non-zero (2022)

#169

Post by nsvd » Mon, Jan 08, 2024, 3:35 PM UTC

rjmunro wrote: post #140

lkirkwood wrote: post #130

Earlier quoted context omitted.

The point is you have total control over your key. You don't control the banks and there's no guarantee you can always get your money from them.

What if you get Dementia (or even die) and forget the password? It's possible to have set up a second password with a trusted third party, but then you have to trust that entity the same way you trust the bank - not just against them stealing your money, but against other parties hacking their systems and recovering your keys.

At this point in my life, it's much more likely that a bank will lock down my funds than that I will get dementia and lose access to my keys.

Re: The optimal amount of fraud is non-zero (2022)

#170

Post by Alpha3031 » Mon, Jan 08, 2024, 3:40 PM UTC

tremon wrote: post #153

amadeuspagel wrote: post #132

> This is counterintuitive and sounds like it is trying a bit too hard to be clever. Indeed. You could make the same counterintuitive and clever point about any bad thing, pointing out that there are things one might do to reduce that thing, which have other costs, and aren't worth it, but for many bad things that would not sound counterintuitive and clever, but deranged. Consider the following statement: > The optim…

> The optimal amount of radioactive material in food is non-zero. But this is true! Everything except lead is radioactive in some capacity. Pretty sure us humans cannot live on lead alone.

Lead-208 is the heaviest "stable" nuclide, assuming proton decay is not possible, but it is not the only stable nuclide. Excluding isotopes like argon-36 (which has an energetically permitted double electron capture to sulfur-36) and not considering possible spontaneous fissions for those A>92, there are still 146 nuclides (all of which ZIncidentally, astute readers that have picked up on the fact that Pb has Z=82 which is larger than 66 should pat themselves on the back and note that the 4 isotopes all have a yet-to-be-observed decay to mercury, with half life of >1.4×10^20 years for 204 and experimental lower bounds of >10^21 for the other 3. Theoretically, 208 takes >10^124, which means 207 is "more" stable.