> So chargebacks due to fraud simply wouldn't be there.
That is far from the only reason there is credit card fraud. Actually most credit card fraud is linked to identity fraud (a hacker stealing someone's financial credentials or posing as them on an online/offline store).
Most of the credit card information stolen from Target and Home Depot is not used but sold as quickly as possible on underground forums to "the greater fool" who is willing to take a risk to use it (if it still works).
Because of the chargeback system, those millions of credit cards stolen are not a huge issue for consumers because they can immediately lock down their card. Cards are replaceable keys. If you believe that you've been compromised, chargeback for whatever amount was stolen from you and change cards. It's a pretty incredible system for consumers when you think about it.
Contrast that to bitcoin. Your third-party bitcoin storage service gets hacked, your bitcoin are gone forever. You choose to store your bitcoin locally and you're exposed to physical theft (like keeping cash under your mattress).
Bitcoin does not solve the fraud/theft problem. I facepalm every time I hear that argument. Chargebacks are omnipresent today because they protect consumers because theft has always been and will always be part of any financial/payments system — simply because thieves don't target "how" you pay (push vs pull doesn't matter) but target where you store your wealth.
> thieves don't target "how" you pay (push vs pull doesn't matter) but target where you store your wealth.
I wasn't arguing against this. Your credit card is where your wealth is stored, if it can be used to purchase things. And your wealth is stored with Target if they have your CC info. So places like that seem a likely target for attacks.
> Contrast that to bitcoin. Your third-party bitcoin storage service gets hacked, your bitcoin are gone forever.
M-of-N key schemes will prevent this in the future. Also not the only option.
> You choose to store your bitcoin locally and you're exposed to physical theft (like keeping cash under your mattress).
I don't see how. If your stuff is encrypted or your devices locked, then they would not be susceptible to theft from your mattress. They'd have to be stolen from your hand while unencrypted or device unlocked.
Not sure that I buy that most CCs are somehow gotten through a means other than 3rd parties who have them.
Another point is that if you get your info stolen, why should the merchant take the loss? They've already given out the product. It's your money to be responsible for, if the merchant doesn't hold the means to charge it, which they wouldn't with bitcoin. This realization will lead to more secure systems, since consumers would not be able to charge back willy-nilly.
> Your credit card is where your wealth is stored.
Your credit card is just a means of payment (a key). Your wealth is stored at your bank.
All these merchants may have your bank keys, but they can't use it to charge you illegally because they will incur costs (a chargeback fee and then some). It a great system in which both the consumer and the merchant are incentivized to behave correctly...
That is far from the only reason there is credit card fraud. Actually most credit card fraud is linked to identity fraud (a hacker stealing someone's financial credentials or posing as them on an online/offline store).
Most of the credit card information stolen from Target and Home Depot is not used but sold as quickly as possible on underground forums to "the greater fool" who is willing to take a risk to use it (if it still works).
Because of the chargeback system, those millions of credit cards stolen are not a huge issue for consumers because they can immediately lock down their card. Cards are replaceable keys. If you believe that you've been compromised, chargeback for whatever amount was stolen from you and change cards. It's a pretty incredible system for consumers when you think about it.
Contrast that to bitcoin. Your third-party bitcoin storage service gets hacked, your bitcoin are gone forever. You choose to store your bitcoin locally and you're exposed to physical theft (like keeping cash under your mattress).
Bitcoin does not solve the fraud/theft problem. I facepalm every time I hear that argument. Chargebacks are omnipresent today because they protect consumers because theft has always been and will always be part of any financial/payments system — simply because thieves don't target "how" you pay (push vs pull doesn't matter) but target where you store your wealth.