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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

#31

Post by TrapLord_Rhodo »

erk__ wrote: post #5
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…

Likely using stolen credit card credentials to buy bitcoin and then use them to buy things on Steam. They already have a massive problem with that without introducing bitcoin into the equation

that doesn't make any sense. The 'fraud' in your scenario and where the point of contention lies is between the the credit card company and the exchange where it was onramped. There's no way the exchange is then going to go through the effort to track the btc to steam and say 'Hey, that transaction that didn't come from our exchange wallet was fraud i want the BTC back.'

Also - That's just like fraud with extra steps? Why even usee btc?

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

#32

Post by mmaunder »

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…

“did someone try to send something other then bitcoin to a ₿ address?”

Like what? Cottage cheese?

Transaction failures and and fees are not fraud. The quote is specific.

Regarding lightning: https://twitter.com/nikzh/status/1356335970300416001?s=20&t=...

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

#33

Post by allisdust »

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.

Stolen credit cards are a problem for the merchant because the charges could be reversed by the bank and merchant will incur the loss.

I don't see how that is even remotely possible with Crypto. How did Steam lose money ? My guess is they might be accepting it through some payment provider (so not a true crypto) who has in their T&C to be able to reverse transactions (which must be happening in Cash on the Steam facing side).

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

#34

Post by trillic »

skybrian wrote: post #27
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…

Could people create fake game items and use Bitcoin to pay themselves as a way of converting it to cash? Is that a thing? So the game item and the transaction are fake, as in they’re not actually there to play games.

Yes, this is colloquially known as "money laundering". It's one of Bitcoin's most promising use-cases!

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

#35

Post by kova12 »

swid wrote: post #20
kova12 wrote: post #3

What exactly does it mean "fraudulent transaction" in the context of bitcoin? It's not like you can use someone else's account number to purchase stuff.

The people who buy the game then resell the key on other websites for less than you find it on steam. They can buy many licenses when the game is on sale, so even if there is no chargeback, the devs can lose money through these methods. Otherwise it is still a money laundering tactic. Here’s a blog post where they talk about this eco system. https://factorio.com/blog/post/fff-303

I'm failing to understand why is this considered fraudulent. Buy low sell high, this is how all trade works. People buying multiple keys for resale is just an unintended consequence of underpricing the product.

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

#36

Post by scotty79 »

erk__ wrote: post #5
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…

Likely using stolen credit card credentials to buy bitcoin and then use them to buy things on Steam. They already have a massive problem with that without introducing bitcoin into the equation

How would steam know what was used to pay for bitcoin they received?

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

#37

Post by TrapLord_Rhodo »

paulgb wrote: post #8
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…

I remember a period somewhere in the 2010s where it wasn't uncommon to see a business experiment with accepting Bitcoin (as Steam did), before transaction fees made it impractical. Given the way people talk about LN, and the (quite understandable!) desire to avoid credit card transaction fees, why don't we see more businesses accepting it? (Asking this in good faith; I am admittedly ignorant about LN and have not tri…

yeah, a couple of companies in the space are experimenting with the concept of an omni-pool.

Essentially, since arbitrage bots are a constant you don't need an outside oracle to ensure there's very little slippage between assets. Addititionnally, since you are swapping inside the pool it does not incur a trade fee as you aren't trading some outside entity with a confirmation time.

Obviously it gets deep in math, but what you get it the ability to pay for anything with anything with no trading fees and a % APR for keeping your assets in the omni pool.

Solona and dot already beat visa in transaction speed, latency and confirmation time. DOT at technology maturity is looking to be able to process around 10X the transaction volumes of visa.

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

#38

Post by rhino369 »

erk__ wrote: post #5
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…

Likely using stolen credit card credentials to buy bitcoin and then use them to buy things on Steam. They already have a massive problem with that without introducing bitcoin into the equation

How would Steam even learn about that? The person getting scammed in that situation is the person selling bitcoins for credit card payments, since those payments will be canceled by the card holders bank.

Does anyone actually sell bitcoin via credit card transactions?

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

#39

Post by TrapLord_Rhodo »

i can pay for anything in the economy right now with BTC. It's called a crypto debit card... look it up.

I don't understand this sentiment. A) 50% of btc transaction were fraudulent makes zero sense. The technology behind BTC ensures it can't be fraudulent. So unless someone wants to explain to me how the hackers broke BTC's consensus to buy... videogames? it makes noe sense.

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

#40

Post by mr_cyborg »

flotzam wrote: post #25
mr_cyborg wrote: post #22

Earlier quoted context omitted.

There are some resources out there if you search for the stages of money laundering. Companies that have to fight money laundering have to know what it looks like and what they can do to catch it. The stages are Placement, Layering, and Integration. Here’s one source that may help explain: https://www.stpaulschambers.com/stages-of-money-laundering-e...

But how does any of that apply to the supposed "Steam purchases with stolen credit cards by way of Bitcoin" scheme?

1. Stolen money is used to buy bitcoin

2. Bitcoin is obfuscated by purchasing things online with it

3. Those online assets can be sold for cash

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