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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

#241

Post by srcreigh »

gambiting wrote: post #228
agentofoblivion wrote: post #219

Earlier quoted context omitted.

“Fraud” and “simply” don’t belong in the same sentence. This is coming from someone who’s spent years working with many fraud departments in major companies. Wack-a-mole doesn’t work, they just scale their account creation.

Well then please explain what is difficult here. You initiate a purchase with bitcoin, valve instantly grants you access, then few hours later valve checks if the transaction has been confirmed in the blockchain or not. If it hasn't, then the entitlement is removed. What's not simple about it?

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

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

#242

Post by anonporridge »

bavell wrote: post #240
anonporridge wrote: post #203

Earlier quoted context omitted.

The only thing that really matters is how much work has been built up on top of the transaction. Shorter block times doesn't change that function at all. In a version of bitcoin with 1 minute block times, the security guarantee of 60 blocks is identical to the current security guarantee of 6 blocks, because it would be exactly the same amount of energy going into mining to create immutability. The amount of work (has…

Great answer. This is related in my mind to the framing of crypto "pointlessly wasting" electricity - it's actually a fundamental part of securing the network by making it prohibitively expensive to reverse or modify mined blocks. I'm open to alternatives to PoW but so far it's been the most successful tool to solve this problem.

Proof of work is an alternative to military spending.

Proof of stake doesn't solve this problem, as the top stakers end up needing to control (or get coopted by) the monopolies on violence. The traditional banking system is effectively an obscured proof of stake system.

Proof of work also has the nice feature that every watt of energy used to acquire and secure bitcoin is a watt that can't be used for violence.

You might like the work of Jason Lowry, a US Space Force Major who's currently studying bitcoin conceptualized as a new kind of military technology, https://twitter.com/JasonPLowery

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

#243

Post by bavell »

doomroot wrote: post #238
kadoban wrote: post #227

Earlier quoted context omitted.

Depending on what it is, 3-6 is a _lot_. For something like a Steam game, it seems like waiting for 1 should be more than enough. I say "more than enough" because can't they just revoke the key of whatever was purchased if it gets double-spent? Seems easy enough.

> it seems like waiting for 1 should be more than enough. Not in bitcoin land, orphaned blocks happen a few times a day: https://bitcoin.stackexchange.com/questions/2170/how-often-f... If you're willing to tolerate this risk then by all means go for it. (I'm with you I think steam should be able to tolerate this risk.)

FYI the answer in that link is from 2013, not sure how much it's changed since then but I doubt it's the same today.

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

#244

Post by 3np »

anonporridge wrote: post #242
bavell wrote: post #240

Earlier quoted context omitted.

Great answer. This is related in my mind to the framing of crypto "pointlessly wasting" electricity - it's actually a fundamental part of securing the network by making it prohibitively expensive to reverse or modify mined blocks. I'm open to alternatives to PoW but so far it's been the most successful tool to solve this problem.

Proof of work is an alternative to military spending. Proof of stake doesn't solve this problem, as the top stakers end up needing to control (or get coopted by) the monopolies on violence. The traditional banking system is effectively an obscured proof of stake system. Proof of work also has the nice feature that every watt of energy used to acquire and secure bitcoin is a watt that can't be used for violence. You m…

> Proof of stake doesn't solve this problem, as the top stakers end up needing to control (or get coopted by) the monopolies on violence

How so? Assuming (pseudo-)anonymity for stakers is possible.

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

#245

Post by naniwaduni »

srcreigh wrote: post #241
gambiting wrote: post #228

Earlier quoted context omitted.

Well then please explain what is difficult here. You initiate a purchase with bitcoin, valve instantly grants you access, then few hours later valve checks if the transaction has been confirmed in the blockchain or not. If it hasn't, then the entitlement is removed. What's not simple about it?

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

How much worse is this than people who do this 0.5x a day with 48-hour returns?

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

#246

Post by donkarma »

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.

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

#247

Post by gruez »

deutschewelle wrote: post #193
gruez wrote: post #148

Earlier quoted context omitted.

>It is obvious to many of us what "fraudulent" mean here, it could be an array of: >- previously flagged wallets moving through mixers So if someone robbed a bank, used that money to buy drugs, that money ended up in my hands somehow (eg. I bought from the same drug dealer), and I used that to buy a big mac, my big mac purchase is "fraudulent" as well? >- purchases and refunds to facilitate money laundering How does…

The crux of your argument appears to be that Gabe is lying and not to be trusted :D

>that Gabe is lying

Quit putting words in my mouth. I made no such claim.

>and not to be trusted :D

Yes, if by "not to be trusted" you mean "not to be taken at face value".

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

#248

Post by anonporridge »

3np wrote: post #244
anonporridge wrote: post #242

Earlier quoted context omitted.

Proof of work is an alternative to military spending. Proof of stake doesn't solve this problem, as the top stakers end up needing to control (or get coopted by) the monopolies on violence. The traditional banking system is effectively an obscured proof of stake system. Proof of work also has the nice feature that every watt of energy used to acquire and secure bitcoin is a watt that can't be used for violence. You m…

> Proof of stake doesn't solve this problem, as the top stakers end up needing to control (or get coopted by) the monopolies on violence How so? Assuming (pseudo-)anonymity for stakers is possible.

Long lasting anonymity of stakers is impossible. Eventually, everyone will be tracked down. There's too much power at stake to remain hidden from establishment power forever.

And anonymity of stakers who have unassailable control of the network consensus is exactly the problem. If you don't know who the king is or where he lives, then the peasants have zero ability to countervail his control authority when he starts abusing his power. No sovereign nation or person will sign up for a system like that without being violently coerced, like the US does to keep the rest of the world on the petrodollar standard.

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

#249

Post by gjs278 »

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.

No post body was provided.

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

#250

Post by PretzelPirate »

egberts1 wrote: post #178
alickz wrote: post #161

Earlier quoted context omitted.

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.

Personal check is a quasi-promissory note binded whose legal-teeth for recovery through law enforcement. “0-conf bitcoin” has no legal teeth for recovery … yet so there is no enforcement (except for the merchant to chase after the scofflaw). “Money is forthcoming”. Bank cheque is a bank-guarantee binded by banker self-verification (almost always good) with no takeback (voiding) mechanism. “block-chain confirmed” is a…

> has no legal teeth for recovery … yet so there is no enforcement

In this case, Steam was selling a digital good that they could be fully revoke if the funds never arrived, so the check ability works very well.

It would have been even better on a smart contract platform where the game license would exist on the chain itself and couldn’t be purchased via a double spend, Chain re-orgs would also sort themselves out in a fully on-chain system.

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