'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments(pcgamer.com)
pcgamer.com
'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments
https://www.pcgamer.com/uk/50-of-transactions-were-fraudulent-when-steam-accepted-bitcoin-for-payments-says-gabe-newell/
324 comments
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 bitcoin lightning payments, because they work in a fraction of a second and specify the exact amount that has to be payed. Also they are almost free of transaction costs.
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 bitcoin lightning payments, because they work in a fraction of a second and specify the exact amount that has to be payed. Also they are almost free of transaction costs.
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.
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.
This article I think contains the original interview with Gabe. It at least mentions the nature of the fraud [1]. He actually says "the vast majority" which sounds like more than 50% to me.
> Another thing was that the vast majority of those transactions, for whatever reason, were fraudulent, where people were repudiating transactions or using illegal sources of funds and things like that. And that's just out of control, right? You want that number, realistically, in a couple of percent, not half of all transactions turning out to be fraudulent transactions. Similarly, with the actors that are currently in this NFT space, they're just not people you really are wanting to be doing business with. That doesn't say anything about the underlying technology, it's just a reflection of the people right now who are viewing it as an opportunity to rip customers off, or engage in money laundering, or other things like that.
1. https://www.rockpapershotgun.com/gabe-newell-interview-steam...
> Another thing was that the vast majority of those transactions, for whatever reason, were fraudulent, where people were repudiating transactions or using illegal sources of funds and things like that. And that's just out of control, right? You want that number, realistically, in a couple of percent, not half of all transactions turning out to be fraudulent transactions. Similarly, with the actors that are currently in this NFT space, they're just not people you really are wanting to be doing business with. That doesn't say anything about the underlying technology, it's just a reflection of the people right now who are viewing it as an opportunity to rip customers off, or engage in money laundering, or other things like that.
1. https://www.rockpapershotgun.com/gabe-newell-interview-steam...
> There's a difference between what it should be and what it really is currently in the real world.
I feel like that when I speak with bitcoin enthusiasts. Lots of ideology that I don’t necessarily disagree with… but the ecosystem is something else…
I feel like that when I speak with bitcoin enthusiasts. Lots of ideology that I don’t necessarily disagree with… but the ecosystem is something else…
Completely incoherent article. What does “fraudulent” even mean? Fraudulent credit card transactions for gift cards are common, because the gift card provides a way to cash out a stolen credit card number. But if a criminal has access to someone else’s Bitcoin, it’s already “cashed out”.
The big thing here is that blockchain is a solution in search of a problem and none of the applications that have been mooted have made sense. I have no doubt that it's going to collapse, but I wouldn't dare to put a date on it. I was pointing out the absurdity of it 10 years ago and it's still sucking people in. Then again, people still get suckered into Ponzi schemes 100 years later so ?
How can a Bitcoin transaction be fraudulent?
They are irreversible and if the Bitcoin is stolen that's not the merchant's problem.
The whole point of Bitcoin is to eliminate the possibility of chargebacks and thus the need for merchant to care about whether the buyer is in good faith and whether the money is stolen.
They are irreversible and if the Bitcoin is stolen that's not the merchant's problem.
The whole point of Bitcoin is to eliminate the possibility of chargebacks and thus the need for merchant to care about whether the buyer is in good faith and whether the money is stolen.
The number of people in this site that can't accept that half of the transactions was fraudulent is astounding.
If you're in the space, going "well actually" in every article critical of blockchain based finance doesn't help your mission at all. Ultimately you're just making up excuses for the toxic parts of the system.
If you're in the space, going "well actually" in every article critical of blockchain based finance doesn't help your mission at all. Ultimately you're just making up excuses for the toxic parts of the system.
At this point is BTC a good idea? Does it actually provide any damn value at all at a macro level?
This sounds eerily similar to various debates regarding adult content, that some companies (clearly not all becuause OnlyFans) have decided that customer segment is not worth pursuing. Not because there is no money in it, but just because it is not worth the trouble...
I am specifically thinking of the drama between payment processors and porn sites. I don't really think that Visa's position is "porn = bad" or that they would deliberately sever a profitable relationship with customers unless they were experiencing or anticipating something bad for business.
Valve seems to be thinking in the same vein here, where it is just not even worth trying to play the crypto game (pun intended...).
I am specifically thinking of the drama between payment processors and porn sites. I don't really think that Visa's position is "porn = bad" or that they would deliberately sever a profitable relationship with customers unless they were experiencing or anticipating something bad for business.
Valve seems to be thinking in the same vein here, where it is just not even worth trying to play the crypto game (pun intended...).
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
What a pointless fluff piece.
How did they know the payments were fraudulent?
Yes there are a ton of pitfalls and shams and bad things happening in the crypocurrency world, but this "article" is the media equivalent to the garbage projects in the crypto world. It is designed not to provide something useful, but rather to make money with questionable promises.
How did they know the payments were fraudulent?
Yes there are a ton of pitfalls and shams and bad things happening in the crypocurrency world, but this "article" is the media equivalent to the garbage projects in the crypto world. It is designed not to provide something useful, but rather to make money with questionable promises.
In my estimation, most of the activity done with people's inventory on Steam, especially skins in major games, involve one illicit scheme or another. I guess you can't or shouldn't stop people from using their skins on gambling sites. However, it doesn't seem like many of the metafeatures that the company started to build around Steam actually serve regular gamers just looking to enjoy themselves.
I ran a web hosting business. We had a word for people who wanted to pay for servers with an untraceable currency: criminals.
"People didn't figure out why we need distributed ledger"
Means rather Gabe didn't figure it out, the team didn't understand how it works, and for burned. The reasons for distributed ledger are actually quite obvious.
Means rather Gabe didn't figure it out, the team didn't understand how it works, and for burned. The reasons for distributed ledger are actually quite obvious.
what a dumb title. bitcoin transactions can't be fraudulent. obviously some kind of clickbait
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.
I am more surprised that Gabe Newell is still the CEO of valve/steam and it's privately owned
And of the 50% that were legit, what percentage was with stolen or fraudulently obtained bitcoins?
bitcoin should be seen in the mainstream as a universal payment network. I believe its best use case for the average(non-cypherpunk libertarian) person/company is to accept it by using a service that automatic exchanges it for dollars on their end.
For example, someone in africa could pay .001 BTC($40 currently) for a game and all steam would see on their end is a debit transaction for $40(cash not bitcoin) in their account. It allows for bitcoin to be held by those who don't mind the volatile nature of its market value, AND allows for those wanting to accept without holding it in the short term. Win Win for both parties :)
For example, someone in africa could pay .001 BTC($40 currently) for a game and all steam would see on their end is a debit transaction for $40(cash not bitcoin) in their account. It allows for bitcoin to be held by those who don't mind the volatile nature of its market value, AND allows for those wanting to accept without holding it in the short term. Win Win for both parties :)
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.
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.
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 account instantly for a better purchase UX.
Turns out anyone with some deeper understanding of bitcoin could construct another transaction spending the same bitcoin back to themselves before their original transaction was ever put in a block. The bitcoin community moved away from accepting '0 conf' transactions pretty much everywhere because of this reason.
In fact the high fee era (2016-2018) saw many wallets incorporating this "double spend" feature into their wallets. This is known as RBF, "replace by fee" and is really useful when you need to bump your transaction up the queue. You replace your old transaction, that is waiting to be mined, with a new one that offers a higher fee to incentivize miners to add it to a new block.
I think its rather unfortunate that 0 conf transactions were written off so quickly. There are many context where a 0conf tx makes sense, mostly IRL. But, if you are running a business online and you don't trust you customers you should wait 3-6 blocks after the transaction has been mined before delivering your goods.