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Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

wsj.com

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Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#141

Post by miscreanity »

jaredklewis wrote: post #126
miscreanity wrote: post #26

Earlier quoted context omitted.

This happens in any field during growth. Blockchain is a tool which you can blame all you want, but will not change the outcome. Blockchain or Distributed Ledger Technology or whatever the name is of late has shown the possibility of standardizing identity, time-stamping and other forms of data with almost no trust involved. These systems are herding cats successfully, the only question is which will be settled upon…

> The greater danger than fraud is when governments and other institutions get involved to use these systems as control and tracking tools. Snowden's revelations showed laughable secrets compared to what will be done with blockchain as infrastructure. This makes no sense. Why would a surveillance state possibly need or want a blockchain?

As @lostmsu points out, government surveillance is a greater issue.

The paper currency you may have in your pocket has serial numbers on it but it is impractical to associate those numbers with an individual, much less the sequence of travel it takes among varied transactions. Blockchain-style crypto systems make it exceedingly simple for a government to track every transaction anyone engages in, from paying for gas to buying stock to selling a house.

We are certainly not there yet for most of the currently-imagined purposes. However, there are services like Chainalsys[1] that are already being used to track users. It is not a stretch to imagine the impact of full government monitoring.

Take that a few steps further with regulatory control of development, mining operations, validating nodes, etc; then the control aspect kicks in and makes asset freezes of today seem quaint.

Combined with international information-sharing efforts, you will either have to agree with the ruling elite or be excluded from the broader economy. Dissidents will be tracked far more easily as well, leaving nowhere to run but increasingly remote locations.

This is why I say that blockchain/crypto will become far worse than the hope for what they could do for people around the world. At the same time, numerous advances in many sectors will make things seem magical - from construction and manufacturing and medicine and robotics. With jobs shifting away from labor-intensive toward creative endeavors in all fields, control will no longer be over people directly but the systems that support us - and who will have control of those systems?

[1] https://www.chainalysis.com/

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#142

Post by dboreham »

ryanlol wrote: post #31
dboreham wrote: post #27

Earlier quoted context omitted.

Care to say what kind of product you are selling, and to which kinds of customer?

Most of our revenue comes from proxies, customers range from SV startups to individual “SEO” people. We do accept other payment methods from established clients.

As in : HTTP Proxy services?

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#143

Post by hueving »

ryanlol wrote: post #136
hueving wrote: post #114

Earlier quoted context omitted.

What is bitcoin giving your customer that a credit card would not?

Trust.

Trust for what? I'm happy to use my credit card pretty much anywhere because US credit card companies will easily reverse any fraudulent transactions.

Shopping on the web with credit cards is a solved problem. There is some hidden subtext at play with bitcoin that I'm missing. Is it that you don't trust your customers?

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#144

Post by ryanlol »

dboreham wrote: post #142
ryanlol wrote: post #31

Earlier quoted context omitted.

Most of our revenue comes from proxies, customers range from SV startups to individual “SEO” people. We do accept other payment methods from established clients.

As in : HTTP Proxy services?

That’s right.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#145

Post by ryanlol »

hueving wrote: post #143
ryanlol wrote: post #136

Earlier quoted context omitted.

Trust.

Trust for what? I'm happy to use my credit card pretty much anywhere because US credit card companies will easily reverse any fraudulent transactions. Shopping on the web with credit cards is a solved problem. There is some hidden subtext at play with bitcoin that I'm missing. Is it that you don't trust your customers?

Yes, unfortunately we can’t trust our customers.

Before, people were using stolen cards to buy accounts on our service and then selling those on hacking forums.

After forcing new users to pay in cryptocurrency (or have a call with us), there’s been essentially no fraud.

For our niche this seems to work well.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#146

Post by Shorel »

hudon wrote: post #43
ryanlol wrote: post #23

Earlier quoted context omitted.

We receive up to six figures in cryptocurrency payments every week for multiple perfectly legal products. If that’s not a “legal use case”, I don’t know what is. Are we going to argue next that credit cards have no use case because other forms of payment exist? Another example: I just bought a watch off of a guy on a forum using bitcoin, bank transfers or WU would have been a far bigger pain in the ass.

While it has speculative value [0], you can use it to buy stuff, but while doing so you will spend on exchange fees to convert in and out of crypto, you will use as much electricity for your transaction as 33 US households use in a day, you will subject yourself to liquidity risk and volatility risk [1] and you will have to wait for anywhere from ten minutes to a couple hours [2]. Calling this complicated, risky and…

Or you use Ethereum, get confirmation in seconds, using far less electricity.

The only complaint valid in that case is the changing price, but it has been stable for months, and it has grown a lot more during the last year than the same investment in a savings account.

So what you say is essentially correct about Bitcoin, but if you add cost of opportunity to the equation, you have lost a lot more than people using criptocurrencies.

And the criptocurrency of the future can be different to Bitcoin. All bets are off.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#147

Post by Shorel »

chatmasta wrote: post #7
ballenf wrote: post #2

Article is non-paywalled for once. Exhaustive analysis of ICO white papers shows about 1/4 contain major red flags. The bar the WSJ set is pretty low (as in easy to pass without raising flags). Any white paper that didn't plagiarize long passages, re-use others' headshots or fail to name principals, or fail mention risk basically passes. It's also worth noting that the multi-billion dollar figure cited for total fund…

And that’s not even considering the many white papers that are original work, but completely wrong. Many of them propose fundamentally incorrect and exploitable systems. But of course none of the papers are peer reviewed, so if the idea sounds cool to some armchair tech nerds on reddit, off to the races you go! Want to see something truly scary? Pick a coin, any coin, that has had a major vulnerability discovered by…

By the nature of the technology, there's no double spending on a blockchain.

Because every node has the same database. All and every one of the miners maintain a copy of what's essentially the same DB, the same distributed ledger.

But there are plenty of stolen keys and seeds for wallets and if someone gets your wallet, all your money will be moved to someone else's. This, sadly, happens frequently.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#150

Post by chatmasta »

Shorel wrote: post #147
chatmasta wrote: post #7

Earlier quoted context omitted.

And that’s not even considering the many white papers that are original work, but completely wrong. Many of them propose fundamentally incorrect and exploitable systems. But of course none of the papers are peer reviewed, so if the idea sounds cool to some armchair tech nerds on reddit, off to the races you go! Want to see something truly scary? Pick a coin, any coin, that has had a major vulnerability discovered by…

By the nature of the technology, there's no double spending on a blockchain. Because every node has the same database. All and every one of the miners maintain a copy of what's essentially the same DB, the same distributed ledger. But there are plenty of stolen keys and seeds for wallets and if someone gets your wallet, all your money will be moved to someone else's. This, sadly, happens frequently.

4 days later, #1 front page of HN: https://www.ccn.com/bitcoin-gold-hit-by-double-spend-attack-...
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