[Bitcoin-development] Coinbase reallocation to discourage Finney attacks

Andy Parkins andyparkins at gmail.com
Wed Apr 23 09:57:53 UTC 2014

On Wednesday 23 Apr 2014 08:55:30 Mike Hearn wrote:

> Even with their woeful security many merchants see <1-2% credit card
> chargeback rates, and chargebacks can be disputed. In fact merchants win
> about 40% of chargeback disputes. So if N was only, say, 5%, and there
> was a large enough population of users who were systematically trying to
> defraud merchants, we'd already be having worse security than magstripe
> credit cards. EMV transactions have loss rates in the noise, so for
> merchants who take those Bitcoin would be dramatically less secure.

Just pedantry: 100% of credit card transactions _can_ be fradulantly charged 
back but arent.  In fact, only 2% are ever attempted.

If N was 5%, then only 5% of bitcoin transactions _could_ be fraudulantly 
"charged back"; so then why wouldn't only 2% of those bitcoin transactions 
be fraudulant too, just as in the CC case?

The comparison would then be 2% chargebacks for credit cards, equivalent to 
0.1% (5%*2%) for bitcoin.

Not that I think that makes anything else you say invalid.

Dr Andy Parkins
andyparkins at gmail.com

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