Financial deplatforming is a monster, long-term trend to watch over the next decades. Deplatforming happens with sex workers. It also happens in the US marijuana industry. It happens with perfectly legal political content.
The number of ways in which someone, somewhere will be offended by products or services for sale is growing, driven by a rapidly improving worldwide communication network and delivery system, and by people terrified of the change that brings.
The response by PayPal and many others has been to cut service. With each case, the circle of people finding themselves cut off from the traditional economy grows.
Bitcoin is often criticized for its lack of use cases. I find a very high correlation between the strength of this belief and lack of awareness of financial deplatforming in its many guises.
I've had several friends in the adult industry have their checking accounts closed at a several major banks as well. Traditional banking should definitely not be discriminating against fully legal activities.
This is the thing I find very disturbing. That an industry as highly regulated and essential to every day life as banking can pick and choose based on management's moral choices.
It's not a moral choice. It's a case of the business is not worth the hassle. KYC rules mean the bank is on the hook if they are found to harbor ill gotten gains and the sex industry had a some troubles in the past, while not producing enough volume on an individual level to make it worthwhile for a bank to overlook things.
That just seems like profiling at that point, since they’re basically rejecting service to an individual just because of their profession. Sure they might say that there may be a higher probability of a someone in the adult industry being involved in illegal activities, but is it fair to outright deny service on such a wide scale?
Profiling isn't illegal unless it's profiling against a protected class, right? It's like how I can't get cheap life insurance because I took antidepressants like seven years ago during a rough patch in my life.
profiling is illegal when the service is necessary to live. in germany for example, it is illegal to deny someone access to things like a phone line, electricity or water. (that is, even if you don't pay your bills, they are not allowed to turn of your service. instead, if they want the money, they have to sue you)
i believe at this point, access to a bank account is also included in this. as things progress, more things will be added to the list. soon (if not already) internet access will be included.
The cop out for "protected classes" is one of the serious failures of the New Left in the US and past generation progressive attempts to wrangle with social issues. It's one of the reasons you have things like clamoring for representation in small dwindling influential places (the meme is "more trans women drone pilots") whilst ignoring systemic issues like how Flint, Michigan still doesn't have drinking water.
I've made this argument before and made Americans (obviously) mad, but this cop out of protected classes allows you to actually discriminate against said classes, you just have to prove there is no malice in your heart, more or less. That is, you did not because they are black or not men, but because of the sanctioned reasons, then it's okay.
Definitely a gigantic failure. Why not offer protection for everyone and treat them the same? Praise your literacy all you want, doesn't matter if the performance and strategies of political representatives are abysmal. And the concept of treating people equally seems to be beyond comprehension.
Except when you're in the majority, being white and male and a US citizen (in the US) isn't something you ever get discriminated against for. So this "protection" you talk about is pretty useless; if someone wants to discriminate against someone like me, they find some other convenient factor that isn't protected.
German electricity and phone companies can definitely cut you off for not paying. Don't know about water, but I imagine it's similar.
What they can't do is deny you a contract in the first place. (Kontrahierungszwang – obligation to contract, concerns the local water company, the biggest local electricity provider and Deutsche Telekom)
i seem to remember a lawsuit some years ago that made cutting off services less straightforward, but you make a good point, the key is that they can't deny you a contract
so I think what you mean is that profiling is immoral if the service is necessary to live, and in Germany (and other progressive parts of the EU) it is also illegal.
I'm pretty sure these banks doing the profiling were in the U.S
The bank secrecy act forces you to profile. That’s why Caitlin Long repeatedly pointed out [1] how it is most likely an unconstitutional law and needs to get challenged in court. But it creates a moat around banking and therefore has not been seriously challenged.
If you actually read my post, I do imply that when it is worth it, the banks will overlook things, but an individual sex worker's business is not worth the risk (probably, I'm not a banker). They'll help you launder $100 million, but not $10000.
They'll help you launder $100 million, but not $10000.
Actually, no; they won't.
That is unless you find a crooked banker (probably a number of them), which is willing to help.
While it's a nice illusion that a bank will do anything for money and this may have been the case 30 years ago this has massively changed.
The reputational risk and the risk of criminal prosecution, including loss of the banking license in critical markets, is much too big as that a reputable bank would willingly engage in such shenanigans nowadays.
That's not saying that it doesn't happen (see recent examples), but if it happens it's virtually always under circumvention of risk management and compliance departments at a bank.
That's just mincing words. Fine, so it won't be a bank that helps you launder $100 million, but an employee of the bank. Ultimately, it is a human that makes the decision, not some abstract entity. I thought it would be obvious (and won't require the addressing of every irrelevant technicality) that banks don't provide money laundering services in their catalog, but above a certain sum, you can just shop around until you find willing individuals. Happy now?
Umm yes they were, even if they'd done everything right. Look at the HSBC case and tell me the bank did anything nefarious or even negligent. Nope, governments hit them both ways.
HSBC admitted negligence. The cartels liked working with HSBC so much they even had secure money boxes made that were specifically designed to fit through the hole in HSBC branch teller windows.
There are tons of references online, but these are some:
Second link: they kowtowed to Congress because it would be worse if they hadn't. Look at what they actually did: they complied with the law and advised their clients on how to comply with the law. That's their job.
Third link appears to be all about allegations in a lawsuit rather than anything that was proven.
Wouldn't it be better to have them in the regular financial systems subject to the "know your customer" laws, so the money and customer can be more easily tracked?
If it's about all sorts of illegal activities, shouldn't law enforcement use these things as a resource, rather than driving it underground?
It's been happening on social media sites too, so it's not just isolated to banking. It seems to be a political trend to censor non-politically correct things.
I suppose that is it, that if the volume isn't there then even the smallest risk is too much for the bank to bother with. So they just terminate.
In a previous life I administered websites for a number of different businesses. One was a dating site that opened a small business account at a bank and then a couple weeks later the bank abruptly terminated their account, stating that they were not equipped to service "entertainment" business accounts. I guess their real reason was they considered there to be some risk that there would be soliciting going on and it wasn't worth the bother for the bank. The bank was very brash about it, stating that they can close an account at anytime for any reason.
Not just in the past. There's a current case going on about a major channel that Pornhub used to feature about performers being allegedly both lied to about where the footage would be available and raped.
Very possibly what spurred PayPal to make this change.
Pornhub is Canadian, not American (their HQ is Montreal). Of course PayPal is American and Pornhub has plenty of dealings with the US, so your point stands.
And, believe it or not, it is. Patriot Act helpfully provides mechanism for various LEOs to send requests to all FI in US to search for accounts they indicate. Add to that BSA and various KYC requirements that ends up sending data about suspicious customers to FinCEN and you have an easy way to identify undesirables.
Banks form an important part of it as KYC is designed to cut down on Money Laundering. Globally KYC/AML rules have gotten much stricter in recent years. If criminals can't access their money it ought to curb some of the incentives.
It can of course curb illegal activity, as all surveillance laws tend to do, but at enormous cost to privacy, the ability to escape unjust laws, and the ability of persecuted minorities to protect themselves from tyrannical majorities.
That idea behind the rules mostly just annoys legitimate users and only curbs an insignificant amount of criminal activity because alternatives exist (and have always existed). It's somewhat like piracy warnings on digital media; piracy will ignore it but people that consume the content legally still have to sit through the nonsense.
>It's somewhat like piracy warnings on digital media; [pirates] will ignore it but people that consume the content legally still have to sit through the nonsense.
Not quite correct: the pirates actually have or enjoy a superior product; they don't have to "ignore" anything. The legal product has annoying anti-piracy warnings that legal purchasers are forced to sit through, while the pirated versions don't have these warnings at all, so the people who use these versions enjoy a better viewing experience.
On top of that, the format is superior. Legal viewers are restricted to DVDs (very low quality), Blu-Rays (high-quality, but inconvenient and bulky physical format), or streaming (varying quality, subject to problems due to transmission path), while pirates get to have a simple digital file on their computer which is whatever quality they want (i.e. they can choose to download a lower or higher-resolution/bitrate version) which is now local so it can't be suddenly restricted by studio executives who want to make it exclusively available on their streaming service, and it won't be unavailable because your internet connection is slow or down.
I understand from a corporate perspective the need to step away from potential scandal and public outrage, but this decision only creates more obstacles and misfortune for the people actually being abused.
I am not convinced it is just that. PayPal also refuses to do business with online gambling which is an industry with low fraud levels (in the early poker days they were high, but that was a long time ago). Thankfully there are a bunch pf credit card processors who know how good customers online casinos are and most banks are fine too, so that industry is not deplatformed.
I would imagine gambling sites would get a lot of chargebacks. Consider a user that transfers money to the site and loses it all. That user might initiate a chargeback to get their money back.
Most of the online gambling operators in New Jersey take PayPal, though you usually have to use either a bank account linked with ACH or a balance you already have in PayPal.
I'm living in Germany, the bank account of my neighbor in Commerzbank was closed because he wrote "hooker money" in description when sending money to one of his friends. At least that's what we believe because they refused to explain why. He could easily open another account in Volksbank and according to him, when the new account manager asked and learned why his previous account was closed, they had a pretty good laugh.
I used to get "funny" too when sending money through PayPal to friends, never again.
I've been with my bank for 15+ years. One time I sent a payment of several hundred £s to a friend who's paid my share of a holiday when booking.
In the description I put "fun times". I had a call from my bank asking me to explain the payment the next day. I've never been called before nor since that.
It certainly feels like they're a bit touchy about certain references.
I recently started using Venmo to pay a few people and the things I have wrote are awful. Recent examples include: "Human organ trafficking" "Lunch and murder for hire", "sack of shrunken heads" and so on. Let them call me.
I'm American. I went on a trip to Cuba for a free software conference, and someone from the conference borrowed a few Cuban Pesos from me to get some food before going to the airport. Later he sent me USD on Venmo for "Cuban cash transfer" and they threatened to close his account, but he managed to convince them that he was sending me money for lunch at a Cuban restaurant in the US. Ever since then, I'm cautious about descriptions when I Venmo people money.
Never forget.. It's not personal. It's just a process who wants to shed potential liability by applying pressure on individuals involved. Wouldn't be necessary if we had banking secrecy.
I'm an American and so I totally get what you're saying and in principle you're absolutely right, but that's not the way I roll anymore.
I want to be as under the radar as I can be when it comes to stuff like this. My attitude is that the bank already knows too much about me, why give them more rope?
At that moment you should have made it clear that it isn't his business at all to disincenitivise future bad behavior. Even as a lazy person I probably would have switched banks.
It is; the UK has very strict KYC laws and any institution handling money is quickly on the hook for certain misdeeds by their customers. They need to show diligence in monitoring that activity.
> You must meet certain day-to-day responsibilities if your business is covered by the Money Laundering Regulations. These include carrying out ‘customer due diligence’ measures to check that your customers are who they say they are, and risk assessing your business.
(That entire page, like the rest of gov.uk, is comprehensive and very accessible to read for a layman. If you have any passing interest in the area I recommend giving it a skim.)
> It certainly feels like they're a bit touchy about certain references.
I'd say they quite overstepped the boundaries. What are fun times to you and the recipient is certainly not their business. Why would they even waste time reading the RE line if they aren't doing your accounting for you at the same time?
There is even a party rental company named Fun Times. Would they interrogate every cheque written to/from them?
The law in question was established in 2016 and it calls for a special type of bank account ("Basiskonto") to be made available to all[0]. So the story could predate the law or (which is quite likely) the account might be a regular account, not the fallback.
[0] Conditions apply: A bank isn't forced to do business with somebody who defrauded them in the last 3 years, for example. But the decision must be made timely (10 days), it must be explained and there's a well-defined path to legal review. Details at https://www.bafin.de/DE/Verbraucher/Bank/Produkte/Basiskonto...
Don't give them any info. Write something along the lines of "transfer of money", always. Use separate channel to communicate "why". Every bit of information you give them will be used against you.
Generally the advice in Germany is not to use "funny" descriptions, but not because the bank might have no sense of humor but because the tax agency might take it literally.
If your friend sends you money "for sexual favors", that might be considered taxable income and you'll find yourself having some explaining to do.
Not just tax authorities, but (more importantly) police ones.
The laws around things like sex work or drug consumptions, in most countries, are full of grey areas and willfully-contradictory positions (e.g. one can buy but the other can't sell, etc). So as soon as a transaction is categorised as part of a "problematic" economy, then police can get involved. If your bank lets through "hooker money" unchallenged, the police can eventually accuse the bank of facilitating activities which might be, at some level, criminal.
> willfully-contradictory positions (e.g. one can buy but the other can't sell, etc).
This seems weird, but is actually a perfectly reasonable legal regime that's all about power dynamics and enabling the authorities to approach people. Drug users and prostitutes are in much more vulnerable positions than drug dealers and johns respectively.
If you make selling drugs a crime, but not buying/owning those same drugs, now the police can approach addicts much more easily, and get them help (this is the much-lauded Portuguese model).
The same logic applies in reverse to prostitution: if selling sexual favours is legal, but buying is illegal, prostitutes are enabled to report abusive johns to the police, and authorities can approach them much more easily to try and get them off that life too.
This is the rationalisation of a legal kludge that is only necessary to assuage consciences that the state has not become "immoral".
The facts on the ground are that, dissuasion or not, these economies will never go away ("oldest profession", after all). Full legalisation would allow for complete oversight of such murky sectors, which would ensure everyone's safety better than the current arrangements, at all levels. For example, in many countries there is no way for prostitutes to legally ensure their own security, because any sort of professional relationship with a sex-worker is illegal (even if the business itself is not); at that point, whether they have recourse post-abuse or not, is basically irrelevant.
The legal situation around cannabis and prostitution is just a shitshow in most places, driven as it is by outdated sensibilities which have ossified through short-term political calculation. There is no point trying to find in it a logic that is simply not there.
I agree that prostitution should be legalised and regulated to make it safer for everybody involved (because I too don't think it'll ever go away). Cannabis? Probably — I don't know that it's that much worse than tobacco.
Full-on legalisation is not universally desirable, though — there's always heroine, cocaine, crack, meth... — and the asymmetric legality thing is still a very useful tool in those circumstances.
I would argue, from a pure cost-benefit perspective that full legalization of drugs is desirable unless someone has another credible plan for eliminating the black market without unacceptable consequences (e.g. a police state).
What's needed is evidence based approach, where wt draw a line at alcohol and all drugs less lethal/ addictive/ harmful (take your pick) are legalised.
There are some truly horrible substances, but with current approach heroin and weed are sold by the same guy.
Banks in EU are forced to monitor their customers' transactions. I think it's one of the ways to comply with anti-laundering and anti-gray market laws.
Last year there was a news article about someone getting a phone call from the bank because the description in a money transfer contained the substring "ISIL".
Don’t know if it’s only in Germany but banks here don’t need to give you any reason to close your account. There are some stories of how every time they tweak N26 Risk ML there’s a wave of termination letters to customers that didn’t do anything wrong. A bunch of friends got affected by this a while a go, they didn’t do anything wrong and the bank refused to give any reason at all for the termination.
This is actually a consequence of what neural network based ML actually does.
Machine learning is actually a misnomer. A more accurate term is function interpolation.
Let's say I have a training set of 5000 samples.
When I kick off the training process, I'm basically telling the NN run until it simulates a function that yields the desired response in those 5000 cases.
The rub of course, is that programs aren't only defined by what they do (yielding the appropriate response for the the training cases) but also by what they don't do (excessive false positive/negative generation outside the training dataset). Performing correctly on the training, but messing up on more general tasks (the human equivalent being becoming an excellent test taker, but a lousy practitioner) is called overfishing. A more broad subclass of overfishing that van occur would be undesired/discriminatory/illegal optimizations, such as using combinations of protected classes as a significant data point in coming to a determination.
There is no guarantee for any particular training session that you'll arrive at the same weights, or that that set of weights will cover the same set of things that the previous network did. I.e. Your network can make mistakes (just like a person).
The irony in all of this, is you're basically training a machine to simulate a human doing a task in reliability/consistency (admittedly without the constraints of interacting with the world through a human body) with all the volatility between training that just being a human from day to day introduces.
I'm honestly beginning to wonder if the push for machine learning adoption isn't anything more than the market trying to replace people with models that they don't have to pay benefits for, and onto which they can pass blame trivially because, "Of course we didn't make it to discriminate! There's no way we could have known it would do that ahead of time!"
Which further highlights how many "problems" that tech people in the US have tried to solve (transit->uber, various health care start-ups, etc) are essentially due to the failure of the US state to function properly or even focus on the right thing.
Yup, it seems US citizens pay crazy amount of hidden tax because of inefficiencies caused by fanatical anti government propaganda.
This isn't only about freedom it's about keeping power in certain hands.
+1 for this. When working in Germany I talked to citizens who told me their state is also heading that direction.
More things are denationalized so private companies now have the responsibility but also the revenue (like "Autobahn" or some time ago the post).
When I understand it correctly those where initially financed by public money so it seems like this investment is now being absorbed by the companies overtaking the business.
Accordingly there are strong voices who demand less control of the economy by the government.
I think they had a good system running (look at the numbers) and now they destroy that by adopting the ideas of the US-system.
That ends up including things like utilities, but also most of the US automotive industry, banks, etc. (It also requires the listener to have an understanding of expected value, and other basic statistics.)
“socialized losses, private profits” seems to include any government spending that benefits society, such as public ownership and funding of roads, but private shipping companies (and all the industries that rely on them) profiting from their existence.
Read up on corporatism. It describes the overlap of moderate Democratic and moderate Republican ideology pretty well.
It is a shortening of “corporate fascism”, and is the idea that the government exists to protect the economy, which is best done by strengthening existing power structures that power the current economic system.
Therefore the government should defer to corporations whenever possible.
It's also showing up in presidential campaign. Biden is known corporate Democrat. He is still leading in the polls, but losing it. The recent Ukraine revelations also didn't help and looks like Warren is taking over. Out of nowhere 3 new "moderate" candidates appeared, and also Harris got a large donation.
Jim Crow, Watergate, Catholic priest abuse scandals, regulatory failure in 2008, too big to fail, gerrymandering, police involved shootings, Hurricane Katrina flooding, Keystone Pipeline leaks, ...
And, yes, it happens in local markets too: taxi medallion systems, overzealous zoning, local corruption, running Amazon out of Queens, and so on.
We could call skepticism fanatical, but that dismisses some pretty substantive history and current events regarding government corruption and incompetence.
Just like how most public healthcare proposals in the US while technically raising taxes would end up leaving the individual with a much lower financial burden because of the ridiculous amounts of money Americans pay for healthcare and medication.
This belief that the US is capable of implementing a socialized system in an affordable manner seems kind of fanaticism given the incredible amount of evidence to the contrary.
Keep in mind the United States only fails so spectacularly at socialized system implementation because the power of the socialized service to negotiate is defanged to prop up the excesses of the private sector.
Let the government flex its muscles without artificial constraint, and watch how fast the market has to rein itself in to remain competitive.
The reason Medicare is loathed, is because Medicare has a mandate to not excessively spend, and it's pricing is actually determined by people with the public interest in mind first and foremost, as well as having its pricing accessible as a matter of public record instead of being hidden away in a locked filing cabinet somewhere.
The combination of those two factors are a powerful tool for shaping an industry away from "make as much money as possible while providing a service" to "provide as much service as possible while the money holds out".
Sorry, I should have further qualified. It is loathed by the Medical Industrial Complex because they actually have the oomph to buy things at basically cost + a modest markup.
Unlike with insurers where price gouging becomes viable.
Whereas the belief that the US is capable of implementing a non-socialized system in an affordable manner is so hilariously contrary to the evidence, that it makes faith in Santa Claus seem well-grounded.
Another way to put that is that tech people, being tech people, try to solve fundamentally political or social problems by throwing technology at them. And so far it pretty much never works out, unsurprisingly, since it turns out not all problems can be solved with a website.
The failure of these people to fix their state, you mean. Instead choosing for the easier and more profitable option of going into tech and the road paved with good intentions.
You can build gigantic multinational corporations, disrupt all kinds of industries, change significant parts of people's lives with tech all written with code and rules and regulations but somehow making a well-functioning country is too hard, even when there's well-working smaller prototypes available to learn from.
A jedermann Konto or Basiskonto refers only to a personal account. If a client uses this account for commercial activities (eg receiving payments in the said industry), the bank has every right to close the account.
Depends on what your "salary" is. In the EU, the banks are obligated to find out where you get your money. And they have an obligation to close your account if they don't get satisfactory answers. "Know your customer".
My bank has recently started to ask customers to clarify transfers, and even shoot and send some video of themselves, smiling, and explaining things. I haven't got that myself yet but several colleagues have. I'm thinking I should change banks, but am unsure if any other bank is any better, because this is the result of government regulation.
The EU laws to fight money laundering are in conflict with national laws for privacy. And because laws for money laundering impact tax revenue, they will triumph over privacy.
My business got a KYC letter last year. So far I've ignored it. They haven't shut the account yet.
These things are usually treated as box ticking exercises, not as fervent investigative due diligence.
I would guess money laundering happens elsewhere.
For as little as $1m you can set up or buy a bank of your own. For $10m or more you can buy a regulated operating bank with employees and deposits.
The process is more complicated than plain old incorporation, but I would guess it won't be unduly troubling to people with a lot of spare cash at hand.
I suppose you can ignore the letters, if having your bank account suspended for some weeks doesn't cause major business risks to you. The downside with box ticking exercises is that eventually, someone may calculate the ticks, and his/her guidelines will say that this account belongs to a risky category.
The regulation is rather new, and at least Scandinavian banks seem to be hyper sensitive to be on the safe side from the money laundering risk point of view. In part this is due to the allegations and campaigns against Nordea and the actual laundering scandal at Swedbank. The privacy of customers (against having to provide personal information to the bank) is secondary.
Your bank doesn't need to be so invasive, so if they are you need to switch. There is no EU directive that tells them to clarify things using some sort of weird video proof.
But that may still be the easiest of ways required by the financial authority - which comes up with its own rules, the EU rules only being the minimum of what regulators in each country must implement. Often regulators want to be stricter, in order appear as "good tax collectors" and to avoid being targeted by social media campaigns etc.
They may see who is the sender of transfer, but that in itself is not a sufficient explanation for where the funds actually come and whether they are legitimate.
Series of transfers are a basic step in money laundering processes, so from that point of view the need for clarification of each step is understandable.
yes. they will close your account if you receive money from dubious activities (sex and drugs usually).
they will also close your account if you can't prove where the money is from.
i had this issue myself in europe. a friend paid me back a hefty sum. my friend had issues proving where he got the money from.
my account was swiftly closed.
This is true and from what I understand it is available to any EU citizen. The technical term is "Jedermann-Konto" which means "account for everyone". The German Wikipedia article has a lot to say about this topic[1] but unfortunately I didn't find any information in English on it.
This debate is currently brewing in Australia, except its against providing services to mining companies.
When is right / wrong to boycott? And who should be allowed to? (Persons or companies)
Context: in Australia the prime minister (Scott Morrison) is looking into laws to ban boycotts by companies (who are being compelled by people / public opinion)
Thats a really good counter point and I can't think of any way the situations are different other than my morals saying working for pornhub is ok but trashing the planet is not. Of course thats totally subjective and someone could be of the opinion that working for pornhub is not ok.
I think there is a distinction as far as the nature of the boycott, though it's not a clear line.
Declining to buy from or work for a company is pretty much always justifiable. Refusing to provide customer-specific services/work (a rental crane, management consulting, etc.) is a more impactful move, but it's still basically a refusal to engage with the target, either by providing a limited resource or by being enabling their specific actions Refusing them non-scarce, non-specific transactions (e.g. buying lumber) is more extreme, and can become worrying in markets with little competition.
Refusing content-agnostic services is the most extreme and hardest to justify action. These are things that don't connect to the nature of their boycott target, and which many people rely on continuous access to, so even when alternatives exist being forced to switch is actively damaging. We've seen it with DDoS protection, payment processing, and DNS support, but it becomes more vividly alarming if we imagine denying electricity or highway access to an unpopular business. This is why even as Cloudflare decided to shut down Stormfront, they publicly worried that it was a dangerous path to go down.
Finally, I think the situation with payment processors is actually much worse than with DDoS protection, partway to providers of vital services like water and electricity. PayPal is not necessary for survival, but access to money essentially is. And the usual rationale of "you can't force us to deal with anyone else, go open a competitor" is compromised by the extremely tight regulation of payment processors. If PayPal, Visa, and Mastercard decide to shut someone down, there aren't many alternatives. And when we get into tightly-regulated businesses taking government-friendly actions that wouldn't be legal to demand directly (like blocking payments to Wikileaks), the situation gets even murkier...
>but it becomes more vividly alarming if we imagine denying electricity or highway access to an unpopular business. This is why even as Cloudflare decided to shut down Stormfront, they publicly worried that it was a dangerous path to go down.
I can understand their worry, but I think they did the right thing. If I owned a hosting service, I wouldn't provide services to people like that either. I don't want to be known as "the hosting company for neo-Nazis".
If a service is so important that no one should be denied it, no matter how repulsive they are, then I think it's government's job to ensure those people receive that service. No one can really deny highway access to unpopular businesses; highways are owned and operated by the government. Electricity is a little different, because it's usually privately-owned but heavily regulated because it's a local monopoly in many places, so I imagine most regulations would forbid them from supplying power to unpopular customers. Internet hosting service, however, is not government-owned, nor a utility or monopoly in any way. There's countless providers all over the planet. Or you can just set up your own; you don't really have to host your website on a hosting service. People used to run their own webservers all the time. Physical internet access (your neighborhood ISP), however, is much more akin to the electric utility.
Yeah, I didn't mean to suggest that I think Cloudflare was wrong. And given that they did the thing while worrying about the consequences, they clearly figured it was the right thing to do also.
As far as the basic elements of life - utilities and travel access - it's good that they're effectively guaranteed neutrality by governments. Given that living without running water and power is illegal in much of the US, it's obviously not reasonable for the providers to cut people off at will.
Hosting is certainly not any kind of right. Cloudflare's position is a bit different, because without DDoS protection an unpopular site will be permanently inaccessible - it's not just "go do it yourself" but "people who dislike you will effectively shut this down". Even there, though, you could plausibly find another provider or make an attempt to do it yourself. Internet access via ISPs is far more fundamental, which is why I don't mind Cloudflare's action but have serious objections to UK-style mandates that ISPs block certain content.
I suppose my larger question is where the bounds lie on speech as a practical right. It's easy to say "we're not stopping your speech, just your ability to put up your own website". And in reality, hateful content similar to what Cloudflare targeted shows up on all sorts of other blogs, forums, etc. But "you can't have a site" is tantamount to "you can only say this if you find another private party willing to leave it on their site". When we look at physical equivalents, saying "you can publish these thoughts if a mainstream paper will take them, but you're not allowed to print zines" would obviously be illegal, so I'd object to government-ordered shutdowns. But "somebody took all your free zines out of the box and burned them" is probably fair game between private entities, and is a closer analogue to "no DDoS protection".
Even more broadly than that, I think we have a pressing unsolved issue of private actions which are implicitly government-ordered. (This doesn't apply to the Cloudflare thing.) This was a big issue in the 1930/40s, with press and radio content being "managed" via the threat of IRS and antitrust investigations, but it was never actually resolved - practical changes just obviated the issue. Between TV consolidation, "safe harbor" laws, online payment processors, and large tech companies with strong government ties, that concern seems to be rising again.
>But "you can't have a site" is tantamount to "you can only say this if you find another private party willing to leave it on their site".
This isn't really true though. Sure, not being able to find any hosting on the internet would mean no internet presence, but no one is stopping you from making a big sign and standing on a street corner, or using your PC and laser printer to print out a bunch of pamphlets full of your views. This is exactly what people did before the invention of electronic communications, and it worked.
There's nothing in the 1A about free speech being easy or convenient or global in reach, just that the government can't pass a law abridging it.
Mining != trashing the planet. Also, given that there is literally no alternative to mining, how do your morals allow you to support mining companies by using their products?
The coal mines in Australia are totally unnecessary. Australia is one of the best countries in the world for the ability to be powered on renewable energy. Which is now cheaper than coal. Literally the only purpose for coal in Australia is political reasons now.
Yes I know coal is used for the production of other materials but there is more than enough coal currently being mined for steel. We just need to stop senselessly burning it when there is limitless energy raining down on empty desert.
From what I know (and I don't claim to be an expert), solar panels require mining and also cause a lot of waste (what happens to a panel after its 20 year life cycle?). I've not heard whether solar farms would work in Australia - wouldn't the amount of distance be a problem? - nor whether they'd actually be any more efficient than nuclear. Certainly, I recently watched Michael Schellenberger's talk (it's in article form here[1]) and I was surprised at how destructive renewables seem when more detail is given about their implementation.
Most of the materials from a panel should be recycleable. The bulk of the panel is an aluminium and glass wrapper over the solar cells. Glass and aluminium are very recycleable.
Sounds like that thing about the perfect being the enemy of the good to me.
This chain of comments is interesting to me because it seems to follow a theme I always see around discussion of mining in Australia. To put it extremely bluntly, it usually goes: "Australia is in an advantageous position for a pivot to solar energy" --> "Well yes but we can't just stop mining, and solar panels aren't perfect by the way!"
Related is the (to me) laughable notion that someone who uses products derived from Australian mining or benefited indirectly from that industry (almost unavoidable given Australian rare earth mining, for example, and the size of the mining industry in Australia) is somehow a moral hypocrite. I'm sorry, but by that logic, one is a moral hypocrite if one has criticized politicians but has not personally tried to make a difference in the system by becoming one; or one is a moral hypocrite for criticizing Google while continuing to use Gmail. It has no end. "Oh, you want a greener world, but I see you got on a plane once. Checkmate!!"
No one reasonable thinks renewables like solar are a perfect solution. They just don't produce on such a drastic scale things like unlined coal ash dumps that leak into the groundwater.
Well, if we’re going down the route of fallacies then the post I replied to was cherry picking to produce a false dilemma, but to claim that would be just as unfair as your straw man. They made the choice between “limitless energy raining down on empty desert“ and coal, without mentioning a) how to move the energy, b) how to get the materials for the panels, c) how to clean up / recycle the panels, or d) why nuclear in the desert isn’t a choice.
I’d say nuclear seems the good choice here versus a perfect that’s so perfect it’s utopian. It’s not wrong to question utopian visions. By all means, get rid of coal - is anyone arguing on this page arguing against it?
The parent comment mentioned the boycotts in Australia. Maybe I should have added the context for those not in on Australian news but these boycotts are all about coal mining in Australia.
It's fine for 99% of companies to do boycotting. But something like payment processing is a critical utility, and needs to be available in reasonably convenient form to everyone.
This is just plain wrong. Look at all the religion-run hospitals in America, and how they use religious values to affect their patient care and which services they do and don't allow. This has been affirmed by the court system even.
I personally don't like it one bit; people should be getting medical services based on the latest medical science, not based on some millennia-old book of fables, but unfortunately that's the law and the situation currently. And you can't just say "go to a different hospital", because in a lot of rural or small-city areas, these religious hospitals are the only providers around, so they have a local monopoly.
As another counterpoint, just look at Chik-Fil-A. That's absolutely a religious company, and they're quite proud of it. I don't like it either, so I don't eat there (then again, I avoid fast food anyway), but countless Americans are either OK with it, or really like it.
A bank doesn't need to know any more about you than wherever is necessary to complete a transaction and report tax details to you and the government, and honestly that can be done with only a tax identification number (which should be separate from a Social Security Number). The same goes for payment processors, though payment processors may additionally need a company/individual nickname (for convenience in printing on receipts) and a bank account to deliver funds.
I see absolutely no reason for an organization like PayPal or Chase to know who its clientele are, just whether they're legal from a tax perspective, unless the customer provides that voluntarily. And I could even see legislation preventing the collection of such data since it could be used to restrict access to essential services like banking.
I think this gets us most of the benefits of cryptocurrency from a privacy point of view, but still maintains the ability of a government to track down fraud by cross referencing tax data with transactions. The only time someone need be connected to their bank account or payment processor account is if they're suspected of a crime, which would require a warrant.
It shouldn't be possible, IMO, for payment processors to just refuse service based on dislike for the line of work the business owner is in. There are no restrictions on how currency may be used, so digital payments should be treated the same way.
Those two are why banks need to know about you. Cash is harder to track, while well-organized digital cash is not.
Any time someone is dealing with money, both of those need to be covered. It is why Stripe is so valuable, they handle PCI, KYC and AML with a fantastic API.
how do you know that the cashback the shop clerk is handing your right now for your diet coke purchase wasnt used three days ago for buying Heroin in the street ?
Because it comes from a known source. The problem isn't where the physical money has been in the past it's entire lifetime but what it enabled last. This is also why laundering money is a thing, because if you can prove you got the money in a clean way you are no longer on the hook.
Checking accounts or merchant accounts? Most banks shy away from processing credit cards for adult sites because the chargeback rate is sky high and it therefore presents elevated risk. It has nothing to do with discrimination.
Or just fix that system; here (EU) it is not all that easy to chargeback (and impossible in many cases) because payments are secured; if you yell fraud, they will start an investigation (mostly automated); if the IP you paid from was around your house, you filled in correct info, you did 3dsecure (which is used on all my cards now; I had a few that did not have it and they got frauded, but a simple check showed it could not have been me and they reversed them all; they now have 3dsecure too for that reason) which means you knew specific secret information, maybe have a token device and/or the phone of the card owner, they will decline the chargeback request. If you are in your country most of the time and suddenly there is a 1000E charge from a merchant in Dubai, they will block it and call you.
The ease with which you can do chargebacks in the US is harmful in a lot of cases imho. I have been a merchant (of digital goods; gaming, not gambling or adult) and got annoyed enough of US chargebacks (including from Paypal) that we started doing annoying KYC and added very long waiting periods before product delivery for US customers. We had certain payment methods (bank, and there were some payment methods that do not allow chargeback) that had immediate delivery. That fixed it, mostly. It hurts sales, but I rather make less revenue and more profit than pay for product only to lose it to scammers.
Thankfully I've had better chargeback experiences with EU banks. I've only requested chargebacks on products I've not received, and provided my attempts to communicate with the seller. Always got my money back, but was blocked from buying from that merchant again (not that I'd try it after the bad experience).
I have had good chargeback experiences as well in the cases you name. I am talking about cases where it is clear where you are frauding the merchant which are still easy in the US. 3dsecure in most cases means you have to have coerced me AND have stolen my phone/token device. How would this warrant chargeback unless actually you did not receive your product and there is a clear trace of that. In this case indeed, you can chargeback. But not just randomly when you feel like it.
3dsecure is security theater, I hate it so much.
It doesn't matter if you have 3dsecure, because a scammer can use your card on some site that doesn't use 3dsecure. All 3dsecure does is making it harder for me to pay to legitmate websites in the EU. But wait, more often than not I can't pay at all because (in my case) 3dsecure uses SMS, and SMS delivery is unreliable, I can't get SMS from my bank when I travel to the US, or even some when I travel to some other EU countries. For me, it doesn't work approximatively 50% of the time.
And of course, SMS 2FA is not secure at all. Now if there's fraud and the scammer used 3dsecure with spoofed SMS, good luck convinging the bank it wasn't you.
See my edit about hw tokens. To me hw tokens are bad, not only because of the UI/UX disaster explained in the link above, but because I have to have the damn thing with me. Also, batteries ran out while I was in the US for 4 months, and the bank would not send me a new one, I'd have to come get it in person. Thanks bank!
And chargeback was always impossible in my case. In the US I click a button in the webui, or call a phone number. In the EU, I had to come in person to the bank three times, and fill all kinds of forms, and in the end, I still didn't get my money back.
The EU system is fine with fraud as long as the fraud involved tricking you into approving a charge? That doesn't seem right. So I could sell Rolexes for $50 and nobody could get their $50 back when I send them a toy watch from the Wal-Mart checkout line?
Why is it so easy to charge back then? If it's secured then they know it was you... Unless you have a police report saying you were coerced, forced, something was stolen?
How does that work? If you can be sure it was owner initiated, then you allow, outside of some corner cases (which work here too), people to fraud merchants. That makes people happy?
Edit; I know there are more reasons for chargeback and those you can get across the line here too, however, 'frivolous' chargebacks are not good for anyone but they are easy in the US.
You are assuming that people only do chargeback in the case of some kind of fraud where other people stole your card details and spent your money. That is not the case. There are many other reasons to do a chargeback, far more reasons in fact.
AFAIK there it was put in the law(at least US/Canada) that credit card company have to return money and deal with fraudsters their way, CC companies have some really rabid investigators. If they behave improperly you can voice a complaint for financial regulatory authorities - banks really hate dealing with the government.
Yeah, the law is on your (customer's) side in the EU also. Unfortunately people don't know that, so banks can afford to bully their customers into renouncing their claims. Technically if you are the type of person who knows how to deal with these types of problematic businesses that push you around, you will eventually prevail, but it will cost you a lot of time and effort. In my case, the financial loss was not high enough in order to waste even more than three trips to the bank.
My partner's parents were hit hard though, about €5k. They argued back and forth with the bank for about 6 months to no avail. "Sorry, we can't do anything" type of answers. The bank also tried to trick them into signing "fraud forms" that in the fine print absolved the bank of any responsibility. It was only after I actually filed a claim with relevant financial authorities, and then hit the bank with that that they suddenly got their money back.
The interesting thing is that this mentality is so prevalent that even the non-fraud department bank employees genuinely didn't know that the bank is supposed to actually help them. Many of them told us their own stories about how they were defrauded (I have no reason to suspect they were lying because they were family friends, and I heard the stories before our incident).
Amateur porn? User-uploaded X-rated videos? When things go wrong they go wrong fast. Professional studios know how to abide by all the various regulations, many of which change from one state (or even city) to another. Amateurs with webcams in their bedrooms do not. Just look at the "Girls do porn" fiasco to see why someone might not want to do business with an amateur-focused studio.
"Warren’s joint effort with Florida Senator Marco Rubio in 2017 to introduce legislation that would enable banks to discriminate against sex worker, known as the “End Banking for Human Traffickers Act.” (Despite bipartisan support Warren and Rubio’s initiative was never voted on by the Senate, but the same bill has been reintroduced this year as H.R.295 - End Banking for Human Traffickers Act of 2019 and just passed the House Foreign Affairs Committee in March.) "
> Who could possibly threaten a bank over handling financial transactions for sex workers?
The government. The sex work industry was targeted by the Obama administration under Operation Chokepoint. Banks that dealt with customers the administration didn't like were subject to greater scrutiny and regulatory action.
Know Your Customer laws can directly transfer legal liability to banks, but it's not just that.
The Bank Secrecy Act requires banks to provide "suspicious activity reports" on a wide variety of transactions, which can trigger seizure of funds without convictions. And structuring rules can make do the same to suspiciously-organized <$10k deposits even without evidence of other crime, which has happened to a number of small business owners who by sheer coincidence did that amount of revenue.
Filing those reports can get all of the assets in question seized, and failing to file them or filing them too slowly can incur extremely large fines. So the bank runs the risk of 1. having the funds in question seized, so they don't even get to collect interest, and 2. being fined a large multiple of the amount of money in question any time they overlook an instance. That's not directly involving the bank in anything illegal, but it amounts to "if you handle suspicious transactions, you won't make money on them and can potentially be fined lots of money". It effectively threatens banks for working with anything that looks similar to illegal transactions, even if they know its a different industry. And since the private cash transactions for this sort of work can look like either escorting or drug-dealing...
I doubt anyone is threatening banks on this based on moral grounds.
I suspect it's just fraud, people using stolen credit cards and bank details to pay for porn (because porn can be delivered digitally)
So these accounts disproportionately show up in the fraud department and the fraud department spends more time dealing with those accounts than the profit generated.
Eventually, the bank or payment processor decides it would be less effort just to get rid of the customers causing issues. The moral questions probably means nobody internally feels like defending them.
Usually it’s not stolen credit cards, usually it’s their card but they say it was stolen and try to do a charge back.
Hubby pays for porn.
Wife looks at bill.
Hubby denies it, must have been identity theft!
They demand a charge back since clearly card stolen by unknown porn hound, not innocent hubby.
CONSEQUENCES
Card processors and especially customers of card processors get their accounts flagged for too many returns / charge backs, which cost much more to handle than the original transaction fees compensate for. Rates go from a couple percent to 20%, making business models not work.
Banks that the processor deposited into when card swiped, have to risk manage how much money to hold back from the customer in case 2 months later all the deposits get sucked back out by charge backs. What happens if the bank customer had withdrawn their money?
BAD OUTCOME
Very hard problem, easier to just not deal with sectors that have extreme and unpredictable charge backs.
If you are going to care about what your bank is associated with, you might as well pull in banks that fund fossil fuel and weapons. Of if you like a different flavour, one that funds nuclear energy and planned parenthood. It's not like a bank is a nice place where only nice things happen for everyone's preferences and perspectives.
Unless you can find a bank that only does 1 thing and it happens to be a thing you like, there will always be something to be up in arms about. Maybe not immediately, but always something, some time. Today it's PornHub, tomorrow it's meat, and next year it's oil.
Considering the things that banks have financed in the past, the hypocrisy of this stance by banks is incredible. Everything up to and including genocide has been ok by them.
Bitcoin isn't criticized for this being an invalid use case, because it's totally valid.
It's criticized because it's useless for this use case, people involved in this scene in practice don't care about it to any serious degree beyond it being a talking point, and because anything for legally working around financial deplatforming still needs strong interfacing with the rest of the system as well as compliance with legal regimes, which BTC has nothing to say on that.
In fact, you can make your own payments platform denominated in USD and that's as useful as BTC for legal activities. So why go through the extra steps?
Why would you assume adult workers don’t care about Bitcoin? I follow “crypto twitter” a bit and there are certainly a decent number of adult workers that are interested in it. Most understand the benefits for an industry that is in a legal gray area.
Building your own PayPal is way harder than building a payout mechanism for Bitcoin.
I think part of it is a bootstrapping problem. Bitcoin solved an interesting technical problem, so people started using it. Once people started getting interested, companies popped up to sell it, but notably there was a base of users prior to that.
By contrast, the barrier to entry for a new system denominated in USD is much higher. People can't really start using it until there's a company around to support it, and starting a company to run a payments platform isn't for the faint of heart.
Still, I've been keeping an eye on GNU Taler[0], which seems to be tackling the technical side of that problem. I'm unclear on some of the technical details, but it's the closest thing I've found so far to digital cash.
Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes, often times over an hour for shops that are paranoid and require 3+ confirmations. During the peak bubble time, I remember buying something with bitcoin taking 2 hours!!
This technical problem has not been solved and the "lightning network" just turns exchanges like Coinbase into a bank or Paypal that can be shut down or run away with your money, which basically ruins the entire point of using Bitcoin.
Until Bitcoin can scale without "lightning network", I don't see people using it outside illegal activities. And from what I can see, the core concept of Bitcoin (and other cryptocoins) is fundamentally at odds with fast transactions. If you make confirmations 2x faster, then it just becomes 2x easier to fake a transaction. So paranoid merchants will just require double the confirmations.
10 minutes is nothing. A wire transfer can take hours. A bank transfer can take days. A wire transfer might cost you 20 bucks as well. Bitcoin is amazing at transferring large sums of money quickly, internationally, for a low overhead cost. It's extremely useful for a lot of people.
Why the heck do people use those kinds banks over there? Seems to me it takes away all the usefulness of one. It's a money bucket where you put money in and take money out. As soon as one of those three aspects is not there, then what is the point?
https://www.nerdwallet.com/blog/banking/wire-transfers-what-...
There really isn't any low cost option for wire transfers in the US. ACH is the free transfer option, and it takes 1-3 days. Wire transfers are the "pay a lot for immediate confirmation" option just for the very few transfers it's worth it on. The average person is unlikely to ever make or receive a wire transfer. There are consumer-level alternatives for personal transfers like Venmo: https://venmo.com/about/product/
But why wouldn't you want to send or receive money using your bank? Isn't that what it is for? As a non-US person this seems really strange to me (but so is the concept of cheques and tip-based income).
I'm used to using the bank, the apps they have and de debit cards they provide (and now also Apple Pay) to send and receive money instantly every day, and there are on average ~10 instant transfers daily to both other private accounts or businesses to pay for things.
Perhaps this is an exotic or luxury position, or there is some unseen cost to this, but I'm not aware of that at this point.
Bitcoin transactions are instant. You get the 0-conf transaction instantly and are able to buy stuff. The 30 minutes for 3 confirmations are basically the 'chargeback' time, which is about 2 weeks with credit cards. In day-to-day business, people usually trust 0-conf transactions, or are able to handle the chargeback.
How does a 0-conf transaction work? I mean, without confirmations the transaction is not on the blockchain. It basically doesn't exist. Is it just a promise that I will pay a bitcoin in the future?
The seller now has the buyer-signed transaction as it will (hopefully) be recorded on the blockchain. Common wallets will also already deduct the paid amount.
No. Once a valid, signed transaction is _out there_, any miner can (and is generally incentivized to) add it to a block.
The closest thing to cancelling is making a new transaction which makes the first one invalid (e.g. by emptying the source address) and hoping the new one gets added to the block first.
Because transactions can have fees attached to them, you could presumably make it more appealing to mine the second transaction than the first, but I don't know if this is something people do, and as far as I understand it most miners prefer the first transactions they see.
there is a mechanism called replace by fee, so it becomes a question of incentives
The payment processors can scan the mempool for transactions that would invalidate the initial transaction, so then it would be a question of lead time. Great for digital services etc, not so great for in life purchases.
So if you absolutely 100% need confirmation, then yeah 10 minutes is what you need to wait, but that again is a question of probability comparative to credit card chargebacks/fees etc.
Even the next block inclusion isn't a guarantee... it just means that you have at current prices approximately 200k insurance. With enough resources and luck, someone could +EV roll back your transaction, but the cost scales exponentially.
The current viable solution for small inperson transactions is pretty much replicating the banking system. Current versions of abstracting the banking system into something decentralized are clunky/buggy to say the least.
I'm not sure why you group BTC with "all other cryptocoins" when it's clear that your arguments are specific to BTC and its clones. There are many other cryptocurrencies with vastly different approaches to scaling that your post does not cover.
Ethereum is already a lot faster than that, and will probably get to Eth2.0 with sharding and PoS in the not too distant future. Then your ETH transactions will be blazing fast, secure, and cheap as chips.
Of course, they've been saying all of that is not so far away for a couple years now, but we will see. I'm tentatively optimistic.
Ethereum is still on proof of work, so it has the same problem as bitcoin. If they made confirmations take 1 minute instead of 10 minutes, that just means their confirmations are 1/10th as reliable as Bitcoin's confirmations. Nothing was solved there.
And PoS has been "not so far away for a couple years now" because they keep finding problems with it.
>that just means their confirmations are 1/10th as reliable as Bitcoin's confirmations.
This argument is tired. There is no rule that dictates that the same amount of work or stake is equal to the same amount of security across different coins. I trust ETH transactions just as much as I trust BTC, and there are others that I trust equally also.
And now that BTC costs more in fees, their solution is to move to less secure off-chain layers. I'll take on chain ETH, monero, BCH, and a few others any day over a low security off-chain solution like what BTC offers. I may hold BTC, but I'm not buying it, and I'm not using it.
I would like to point out that the lighting network isn't "less secure", it's cryptographicly sound. It is less secure in the sense that you need to keep your lighting node online all the time, but this can be solved with other relegated solutions.
This is plain wrong. Lightening is not on chain except at entry and exit points. By nature this means that anything that happens between is less secure because it has not be settled publicly. Until something has been printed into the blockchain with enough proof of work behind it to be considered immutable, it is simply not in the same domain of security. Comparing these two states is a joke because one of these states is ignoring the very reason why bitcoin was invented (rapid public immutable settlement). Until that settlement has occurred, you must do the very thing that bitcoin was created to remove... trust third parties.
Ethereum's PoS is currently implemented in seven independent and fully interoperating clients. Multi-client testnet should roll out soon, and production is expected first quarter 2020.
What's your point, exactly? My initial comment was that ETH is faster (15tx/s vs 3-5tx/s) than BTC and that layer1 scaling solutions for ETH are probably coming soon.
Everyone that has replied to you is just providing more info than I did.
And your response is "ethereum's transactions per second are comically low right now"?
What is my point exactly? I feel like this should be obvious to anyone that doesn't have a bias towards crypto because they are gambling a lot of money on it.
Making confirmations faster usually just tends to make them weaker. The security of each confirmation is based on the work down (or cpu hours). By making confirmations take half the amount of time, this only makes confirmations half as secure, because the amount of CPU hours spent is the same. You can also make confirmations faster by shrinking the amount of work done per block. This means that while confirmations are faster, it will also take longer for your transaction to get into a block in the first place.
Take a look at this and notice how coinbase requires over 10x more confirmations for ethereum than bitcoin.
Here's why GHOST supports shorter block times for the same security.
In Bitcoin, the chosen block is the one with the most hashpower in the linear chain behind it. Abandoned forks contribute nothing to that.
With GHOST, the chosen block is the one with the most hashpower descended from it, in all forks. This way all the forks contribute to a block's security.
With a linear chain, propagation time is an issue. If blocks are too short it's more likely that miners will find more than one candidate block, causing the work on abandoned blocks to be wasted. With GHOST, no work is wasted.
The original GHOST paper, which proposed the algorithm as a modification to Bitcoin, has some math to calculate, for a given propagation time, the block time that would produce equivalent security to a linear chain. It was significantly shorter.
Sounds like we vehemently agree. Orphaned blocks are indeed rare in Bitcoin, because they have ten-minute block times. GHOST only helps when block times are so short that you get lots of orphaned blocks.
And that's how Ethereum gets away with 15-second blocks.
The number of confirmations needed to feel like a tx is secure and the throughput of the network are not related. Regardless of that, you're still wrong about security and confirmations, using your own source.
ETH ave. block time: 10s. Time to get to Coinbase confirmations (35): ~350s
BTC ave. block time: 10m. Time to get to Coinbase confirmations (3): ~1800s
So I can make 5-6 transactions that coinbase thinks is "secure enough" on Ethereum in the time it would take me to make one transaction with Bitcoin.
Add to that the fact that the throughput of the network is higher, and ETH is actually about 17x faster than BTC, and that's totally ignoring the on-chain scaling that ETH is much closer to than BTC.
Also I don't currently hold any crypto, so you can stop pretending that everyone who is more informed than you is actually just biased. I cashed (of my mostly BTC holdings) in 2017.
I show you this to prove to you that 1 eth confirmation isn't equal to 1 bitcoin confirmation. If it was anywhere equal in security, there would not be a >10X difference. And also multiplying confirmations by average block time and seeing that it is lower than bitcoin doesn't mean coinbase thinks it is more secure. It can also mean that the value of the average eth transaction on Coinbase is lower.
A 51% attacker will be able to churn out 100x the number of confirmations if confirmations were made 100x smaller. It doesn't matter how fast you make them or how many tricks like GHOST you add.
These are some helpful websites/articles on understanding confirmation security.
That does not sound correct on the lightning network. I cannot find any reason it would allow someone to run off with your funds. Can you explain the attack?
In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined amount of money into this system to be able to spend it.
Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment.
The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.
> If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment.
The "network" part of lightning network allows you to make a payment to anyone else on the network (trustlessly) through multiple hops. For example, if you opened a channel with a friend, and your friend had a channel open with Starbucks, you would be able to pay Starbucks through your friend without having to trust your friend.
And this works today. I have one channel open on the lightning network, and regularly make payments to random nodes on the network. I pay << $0.01 in fees for these transactions, and they settle in ~a second.
So what happens if you aren't linked even indirectly?
What if the trust chain is 20 users long?
Who's going to spend the resources to find this chain? And has it been tested to scale, or is it just like Bitcoin in the early days where people said it would scale and never tested it?
People are going to gravitate to putting all their money into a large exchange like Coinbase to avoid these problems.
There is no trust chain. You have no idea how lightning works.
Every hop only knows the previous and next one, nothing else, not even the length of the chain.
Your computer/phone finds the route and if you’re ok with privacy trade off you can outsource this task to your hub for a fee in single satoshis.
People are going to gravitate towards convenient solutions making all sorts of security, privacy and financial risks, that’s why it’s important to have multiple alternatives with different trade offs.
There is a trust chain. If there was 0 trust involved then you could pick random nodes instead of needing to find a specific path. Sure there's cryptographic trickery involved so it is harder to steal the money, but it can still happen.
Large centralized lightning nodes will form and they will act like banks and be able to stop payments to arbitrary entities like Paypal, and even make the payment get stuck for days or weeks depending on how long the timeout is.
From the paper itself.
"the network will look a lot like the correspondent banking network"
No, you’re flat out wrong. There is no trust and it’s impossible to steal money.
You need to find a path because path needs to have channel capacity required for your transaction, that’s why you can’t pick random nodes, not because you want to trust them.
Stealing somebody’s funds from channel is just as hard as stealing bitcoin - you need to crack encryption or you need a private key.
You have no idea how lightning works, please do some reading before making incorrect claims.
Nope, you are just echoing the basic understanding of the tech that is on every bitcoin propaganda outlet.
Each node can still steal money from the node next to them by turning hostile such as not passing the secret and closing out their channel and getting time locks to expire, which is many magnitudes easier than cracking encryption or stealing a private key. The network has already been DDoSed. Now imagine the incentive to do it when it handles millions of dollars.
You can unlock your HTLC without telling the other party the secret. You just close the channel by yourself and tell everyone else the secret and then ddosing so the other party can't redeem his HTLC before his HTLC expires.
> You can unlock your HTLC without telling the other party the secret. You just close the channel by yourself and tell everyone else the secret
Do you not see the contradiction in your statement? You can’t spend your htlc without revealing the secret to the other party. If your stealing procedure involves ddosing random unknown party from being able to access any internet whatsoever to lock them out of minuscule amounts lightning payments are used for - good luck with that.
Nope there is no contradiction. Again you haven't really thought about how this works. You are guaranteed to know who sent you your HTLC because the payment is settled through the channel. You cannot cloak this in any way.
You only need to ddos the lightning network so it won't record their HTLC when it expires. There is no need to ddos them, though I would argue it would be equally easy to do. And so while the other party will eventually see the secret on the block chain, they can't get their HTLC unlocked on the network before it expires.
And the lightning network has already been easily ddosed! We will see it happen more often if the lightning network ever gets bigger. This isn't some hypothetical situation.
> ddos the lightning network so it won't record their HTLC when it expires
this is not even a thing. lightning network is collection of independent nodes, there is no registry of payments and channels, every node keeps their own record.
> And so while the other party will eventually see the secret on the block chain, they can't get their HTLC unlocked on the network before it expires.
why? if a party is stuck in a payment and especially if they notice they are getting attacked - they will take steps to mitigate. the moment commitment with secret is broadcast and in the worst case - the moment it gets confirmed on chain the other party will know the secret and can unlock their htlc. the risk is essentially the same as with deep reorgs - very low because those are very rare events. and the hassle is most definitely not worth the value of a stolen micropayment, which is the primary purpose of LN.
Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no?
If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections.
They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.
That is how exchanges have always worked, but the lightning network encourages people to use centralized exchanges that already have lightning network channels between all other exchanges and sellers so they don't have to waste time committing unknown amounts of bitcoins between 100+ vendors.
It doesn't work that way. If Coinbase operates a Lightning node, you simply open a channel to their node, from your Lightning wallet. You don't give Coinbase your money.
Thanks for writing this. It's the first time I've understood a "lightning won't solve scaling problems" argument. If you need a payment processor to process your payments, then you might as well use a payment processor in an existing fiat currency... It's a fair point.
Edit: Here is an example of a lightning network enabled wallet that works as a lightning node itself. No payment processor needed: https://lightning-wallet.com
I'm not sure how this helps. Clearly I can always run my own lightning node, but the person I'm paying has to accept the off network payment from me. That's fine for some kinds of transactions (like my employer paying my salary). But how am I supposed to convince a retailer to accept my off network payment? Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it? I mean, we can't even set up VOIP connections without a middleman these days because of firewall issues.
I think there is a fair amount of logistics to work out here. I may be wrong, and that would be great, but at the moment I'm not quite seeing how this is going to work in practice.
> But how am I supposed to convince a retailer to accept my off network payment?
Because you're both connected to a common lightning node, at least indirectly. There are several public lightning nodes that accept connections and they are joined together. Connect to one and you have access to their network.
> Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it?
Same as above. The lightning network is, of course, only going to work with other nodes who are also connected, but there is an incentive to join, since when you do, you can transact with all of its peers.
It's been quite a long time since I read up on how lightning works, so maybe I'm misunderstanding something. At least in the version of the protocol I looked at the node that connects to the Bitcoin network has to promise to pay. It's literally a payment processor because they need the capital to guarantee the payment. Is this not the case any more? If it is, then I'm still in the same boat where the Bitcoin network facing node can decide not to service me.
> If it is, then I'm still in the same boat where the Bitcoin network facing node can decide not to service me.
Jesus, this is precisely what the lightning network is for! Please, do a little research before dismissing it wholesale. The node you are connected to cannot refuse to pay, because you have a signed, but unpublished transaction of what he owes you (if he owes you). If he suddenly stops contact and says fuck you, you can just publish that transaction.
Seriously, this has always been the idea from the get go, so don't go blaming that you haven't read the latest update on how lightning works. If you don't understand something, don't go around spouting that it must not work.
No offense, but could you please calm down? I have actually done some research -- to the point of knowing how to implement lightning. However, it is a long time ago and things may have changed. I'm asking you for more information because you seem to know more than me. I'm not trying to shout you down. I'm trying to understand what I'm missing. It's totally fair if you don't feel you have the time or patience to explain it to me, but for both your sake and mine, it's probably best if you just say that and I won't bother you any more.
It won't work, it's already done. There used to be support from major companies like Dell, and "core" blew all that support on a convoluted, over-engineered nightmare while choking the main network. The momentum is gone and it's never coming back.
I'll be deeply surprised if lightning is ever used at the retail level by more than a couple shady internet casinos and John Galt themed vape stores.
"Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes"
Anybody here know the currency Nano? The ORV (Open Representative Voting) consensus mechanism makes it possible to find decentralized consensus in ms without the power-intensive PoW.
For a first impression, you can perform a real on-chain transaction here: https://nanospeed.live/
Seems like it could be interesting in theory, but I'm not sure very many people are seriously working on it, and it doesn't look like there's been an update for a year and a half.
> In fact, you can make your own payments platform denominated in USD and that's as useful as BTC for legal activities. So why go through the extra steps?
Good call. These pornstars should just create their own payment platform instead of going through all the hassle of using BTC.
Wouldn't that still require some kind of cooperation from banks or credit card companies? If someone knows a way that doesn't require cooperation from these, that would be great.
(I suppose one way would be to set up some sort of "western union" where you could deposit cash and someone at the "bank" would change the number in your account balance accordingly... But maybe there are regulations about this?)
I was joking. Suggesting that pornstars create their own payment platforms instead of using BTC is the single worst suggestion I've ever read on here. I'm dumbfounded that someone could seriously think that. The money transmitter license alone would cost over a million dollars.
> It's criticized because it's useless for this use case, people involved in this scene in practice don't care about it to any serious degree beyond it being a talking point
This is demonstrably false in the amateur porn industry.
Ok, but the buyers and sellers of BTC are discriminating very little, against perfectly legal activities, in the way that PayPal is doing it a lot.
If I buy or sell BTC from coinbase, for example, they aren't going to care if the money came from the porn industry or not.
That's the difference. Apparently, for some reason, PayPal is shutting down people who are doing perfectly legal stuff, but coinbase isn't, to the same degree.
I'm in the US and bought perfectly legal supplements from a US company using BTC from my Coinbase wallet. I and several other customers of this US company had our accounts terminated by Coinbase. This US company we bought supplements from also accepted and still accepts major credit cards. Coinbase certainly cares.
I don't want to be "that guy", but Bitcoin being pseudonymous is a definite downside when it comes to losing your account. That's why I greatly prefer Monero, especially with xmr.to letting you transparently send Monero to Bitcoin addresses.
Places like Coinbase are increasingly implementing KYC and will "care" just like other financial institutions. It's not hard to see when money is coming in from a known account or a tumbler.
> anything for legally working around financial deplatforming still needs strong interfacing with the rest of the system as well as compliance with legal regimes
I have never understood the obsession with complying with stupid laws. The solution needed here isn't "legally" working around financial deplatforming; illegally doing so will work just fine - and also probably have the benefit, as widespread disobedience often has, of putting extreme pressure on these laws themselves.
I don't think there will ever be one coin that will solve everyone's problem. As attested to by the number of new crypto currencies attempting to correct every perceived issue with more popular crypto currencies.
Ask Julian Assange [1] how this works with political speech and journalism. Though I've probably provoked "the hate" by naming the major example rather than thought about the underlying principles and what's at stake.
It will be funny that, as with other technologies from the past, pornography will be the use case that will finally bring cryptocurrencies to widespread adoption in society
You forget laserdiscs, smaller videocameras, DVDs, and online payment systems ...
It's also probably the only thing really using VR/AR right now to any significant degree.
It used to be that there was a porn convention at the same time as CES in Las Vegas. For a lot of years, the porn conference was the better of the two from a technology standpoint.
Don't forget the role in testing censorship laws. It is fantastic in a way. Always a wet finger in the air to see in which direction it is blowing, constantly asking "how can I make money from this?".
This is relevant to the argument that Paypal is not merely responding to financial risks, but using its platform to impose its worldview. Guns are highly regulated in the US. Someone violating those regulations in the context on an online business is usually guilty of a felony, and has a high probability of being prosecuted. To my knowledge, guns don't have a high rate of chargebacks, as they involve a papertrail with an in-person pickup requiring government-issued ID and a background check.
At a gun show, two individuals could use PayPal to conduct a sale (if it was allowed on their platform), without any background check or government-issued ID.
They could, or they could list guns for sale on a classifieds site like Armslist and meet in private. People could use Paypal for such a transaction regardless of the terms of use, though trying to use the dispute resolution might result in both parties losing their accounts.
In any case, it's not a meaningful financial risk for Paypal. It might be a risk of bad press, but "criminal pays for gun with Paypal and uses it to commit a murder" probably isn't actually going to result in many people not using Paypal.
Bitcoin isn't a currency that can fix this. Bitcoin is either censorable (lightning network) or unaffordable when used heavily with slow confirmations and ridiculous fees.
The lightning network is a joke--a frankenstein "Engineering UI" layed over a system to route around bad development decisions re:block size.
What sort of censorship are you referring to? If taproot-schnorr is deployed and adopted, cooperative channel operations will look exactly like normal single-sig transactions. As for routing censorship, if one node fails to route for me, I can open a channel with a different node and route around them.
You can be deplatformed from major node hubs, especially considering the design makes the hubs money transmitters from a US legal standpoint. You can get your channel closed out and be forced to pay the transaction fee, which may be higher than the value in your channel.
None of these are things people want to spend money worrying about.
Lightning is also a pile of vaporware. It is even more Rube Goldberg than bitcoin. It’s only purpose in the bitcoin ecosystem is so shysters selling the dream can claim “no really, bitcoin can scale!!!! Lightning is just around the corner!!!”.
(Of course they don’t mention the irony to bitcoin scaling is not to use it)
1 sat/byte transactions will still clear the mempool, eventually. I don't think you need payments for porn to settle immediately. There are workarounds a business could use like speculatively accepting payment before a confirmation using heuristics e.g. the customer's past history. It's not an ideal situation, but the market decided this is the coin to use.
You could argue the market decided it was the store of value to use, like gold, not the coin to use. Or it is still being pumped by bitfinex/tether, tough to tell.
Marijuana is separate from the deplatforming in the traditional sense because federal banking laws and the DEA's stubborn Schedule 1 tautology when it clearly has medical uses are to blame as opposed to uncooerced choices.
Yeah I think there’s an issue with legal sex or political content being deplatformed, but if you want to stop deplatforming weed you should focus on actually legalizing it first lol
This is Big Brother type censorship. Anyone they disagree with will get shut out of Paypal, Banks, Credit Cards, etc.
There was Hatreon but Visa canceled their services for them.
I agree the porn industry is legal and nobody forces people to watch Pornhub, now I doubt the future of Pornhub. I don't use it but I support those who do under the freedom of speech.
Most of the marijuana industry is illegal in the US. States making it legal doesn’t change the Controlled Substances Act. As banking is federally regulated, banks don’t have the freedom to knowingly allow illegal businesses.
Porn however, is legal, and deplatforming a legal product/business is wrong in my opinion.
To be clear, I am not suggesting marijuana should be illegal at the federal level at all, only that it’s not inconsistent that a bank not serve those customers — after all they would then become criminals themselves by facilitating the moment of funds for a product that is illegal.
Porn is legal if everybody involved is above age and gives consent and is capable of giving consent at the time and that consent is properly recorded and the resulting content is not judged criminally "obscene" by some judge in a hick town. Which is way too many ifs for most banks, particularly given the meager returns on offer.
> Porn is legal if everybody involved is above age and gives consent and is capable of giving consent at the time and that consent is properly recorded and the resulting content is not judged criminally "obscene" by some judge in a hick town. Which is way too many ifs for most banks, particularly given the meager returns on offer.
By why is the bank on the hook here? Is the ISP on the hook for serving the content? If the bank followed the regulations around KYC why would they be liable?
IRS treats Bitcoin as property. Accordingly, the recipients need to report every bitcoin transaction on Schedule D and calculate its cost basis ( appreciation or depreciation of Bitcoin). I am not talking about the reporting of the cumulative income, but the additional requirement of reporting of each Bitcoin payment or disposal. Say you received 0.0001 BTC held it for 5 days and then converted to USD. These are two taxable events, not one, with the requirement of calculating BTC appreciation between these two events. Now multiply this burden by every transaction.
In my opinion, IRS successfully killed BTC use in the US by treating it as property rather than currency (for currency FX, transactions under $200 are exempt from cost basis reporting on schedule D)
Is the IRS going to seriously audit you for the $10 in taxes you should have paid because you held some BTC for a week? I can see that being an issue at institutional scale, but for small users it seems unlikely it would ever be enforced.
I think you've just stumbled on the reason that folks are so determined to move us to a "cashless society"
In a cashless society, once the folks in charge deplatform you, you cease to be able to engage in any transactions of any kind, and you basically cease to exist.
I agree that that is a consequence. But I don't think it's the primary motivation.
When I talk to people around me about cash vs cards everyone agrees that paying with card is so much more convenient, especially when you just have to gently tap the reader with your card.
I know many people who have the phone case with space for a few cards. They don't even carry a wallet anymore. They have nowhere to put bulky coins or even bills.
Everything else: Decreased risk of being pick-pocketed, decreased risk of money vans being robbed, increased surveillance, increased control. All those are just secondary concerns.
Oh, individuals who enjoy using credit cards absolutely have convenience as the primary goal.
Regimes working on creating cash-free societies, where there are no legal anonymous payment schemes, on the other hand, simply want to use the threat of turning off your access to the economy as a means of control.
There will always be money around, even if it's not cash dollars
You're talking about people on the edge of society, rightfully so or more they already have many ways of making deals
Meanwhile cashless in a country like Italy could expose the 30% of tax evasion that erodes our freedom as honest and "paying for everybody who's not doing it" citizens
There are other payment platforms that still work here. The problem with most of these alternative platforms is their fraud rates are absolutely through the roof. For example, Green Dot and NetSpend are companies that provide pre-paid, secured credit cards online, and as someone who worked at a consumer fintech company, one of these cards coming through automatically raised the fraud score because we had so many issues with payments from these cards.
Banking is a citizen right. Well, at least it should be.
In Germany every bank is obliged to offer everyone (including homeless, overindebted, asylum seekers, etc.) a so-called base account, which offers a way to receive payments and pay the bills and get a basic debit card. However, the law has a mistake: The price of the base account is not regulated. And many banks charge more than for a "normal" account.
Germany is still a cash country in many aspects. It's worse in Sweden in Finland, where you often cannot buy a train ticket without a debit (or credit) card, cash is no longer accepted.
> In Germany every bank is obliged to offer everyone a so-called base account
That's very commendable; I wish more countries had such a regulation. Does it extend to non-citizens living in Germany? What about to visitors to Germany? Could someone open an account (by right) while there on a holiday?
Non-citizens absolutely. Completely illegal immigrants no, but rejected asylum seekers who cannot be reasonably expected to leave the country yes. (The term is "geduldet", but I don't know the exact legal definition.) Visitors no, I'd guess.
Right, now I see why you ask, I wrote citizen right. Maybe I should have written human right.
In German there is the term of the "foreign co-citizen", not sure what an English equivalent would be. So when I wrote citizen I had in mind those with German citizenship and foreign co-citizens. It just includes everyone living in the country. (Illegal immigrants are smaller topic in Germany than the US, so there is little need to think about that distinction.)
So what. Everyone being capable of doing so should pay tax to maintain society functional. That banks should pay tax in form of a couple of free debit card transactions for poor people is not an unfair share. Banks earn enough money because society no longer works without debit cards.
No, I was saying that it is strange that the debit card is only free if you use it a few times. If you give me a debit card and I don't use it, what did it cost you? A few pennies for the plastic?
Ah, I read the original message as the card and its usage are free as long as you don't have too many transactions. No idea, my knowledge about Poland is very close to zero :(
Printable cash for internet transaction would be nice...
Honestly, the behavior of paypal is abysmal and I wish there to be a real alternative. I despise credit cards and would like to have more options.
I doubt I will ever pay anything for porn, but there are a lot of content creators that can only receive money via paypal/credit card.
I do actually think a government should have some control over its currency, but if the institutions implement their own arbitrary rules, solutions like Bitcoin are the best alternative.
> I doubt I will ever pay anything for porn, but there are a lot of content creators that can only receive money via paypal/credit card.
A lot of porn models are becoming the content creators now. The line between your favorite adult actor and your favorite youtuber is growing thinner every day.
Which makes us wonder if one near day we'll see amateur adult content with sponsored products "... brought to you by Questionable VPN!"
They certainly are content creators. Not really a fan of porn streams though. Prostitution is legal in my country but I wouldn't want to visit one. It is a large industry but it isn't ubiquitous because of legality.
So porn models would probably be a thing even if all payment providers stopped their service for porn. It would just be completely counter productive since this form of sex work is probably as safe as it can be. And any life style decision shouldn't be dependent on payment processors.
Bitcoin would be great for this in theory, but the problem is that customers will not pay you in Bitcoin. People want their porn and they want it now, that's why they're paying. If you don't make it practically seamless for a layman to pay you for your porn, they're either pirating it or looking elsewhere. Sure, a few people might pay, but you're looking at probably a 50-75% revenue loss, best case.
PayPal is an accessible platform that works is a wide variety of scenarios — it’s almost unique in that respect.
Most forms of sex work are illegal in the US and other jurisdictions, and sites like PornHub are compliance nightmares where all manner of sleazy or illegal actions are likely happening. PayPal doesn’t want to be the financier for the next scandalous “amateur” producer.
To be honest I appreciate PayPal doing this.
The more we see prominent cases of deplatforming, the more people are going to take it as a serious problem.
One can always hide behind some pr bullshit when it comes to political free speech and so on. But porn it is finally something enough people care about to take it seriously.
It depends if the de-platforming is happening for reasons of social outrage / offense (bad) or commercial reasons (maybe not 'good' but at least 'better').
If it's about this particular industry sub-group having a much-higher-than-normal rate of fraud or returns or buyers remorse or whatever causes more hassle to PayPal's processes than they're worth, then that makes commercial sense.
A lot of the laws were simply passed under the guise of helping people but were in fact passed to further peoples moral agendas. Easy tell that's the case when data comes along that contradicts the laws efficacy..
I don't even think people are differentiating that much about deplatforming. I am fine if the sentiment growth that thinks'those bad corporation have too much power and can't just start banning users without a clear cause'. The free speech issue is to narrow.
How do people get bitcoin? Pay with a credit card? If so, btc exchanges can ban you still based on the name on the card.
I tried other means such as money transfer and cash gift cards, but the exchange rate can mean to pay for $100 I have to spend $3-400!!
A proposal: sell btc giftcards. Each card will have a qr code which is a url that allows download of a wallet (with priv key) where the URL is active after payment. You can transfer the funds to your permanent wallet or spend it directly. Maybe you can even use it to pay for IRL goods somehow. Either way, the participation barrier is lowered. I heard of btc ATMs as well but I can imagine carrying one more giftcard is easier for stores than adding an ATM.
You can use an ATM (or localbitcoins) to cash out Bitcoin without any connection to your bank account. Bitcoin doesn't have to be ubiquitous to use it even today, you just have to find businesses that accept Bitcoin. A buddy of mine accepts rent from a tenant in Bitcoin. There are exchanges to buy gift cards or Amazon credits with Bitcoin which you can use in real life to buy food. You can realistically go about your life completely in 2019 with just magic internet money. What a time to be alive.
Maybe you’ve never heard of Fold app or Bitrefill. Some of us are actually trying to build a circular bitcoin economy. These companies not only offer onramps and offramps to the ecosystem, but they actively fund and incentivize building. Yes, they make a profit too.
I'm sure other forms of exchange, for example, USD to GC, can still be used to launder money. This is not exclusive to cryptocurrency as you would imply.
Sure, but Coinbase's KYC prevents it from being a reliable long-term alternative. There's still a central authority with your identity, governing whether you can move your money.
Coinbase isn't currently being deplatformed, though.
That is a hypothetical situation which seems to me like it would be pretty unlikely.
Banks aren't talking about deplatforming coinbase, for whatever reason, therefore it is useful.
The whole "what if the government/banks banned Bitcoin!?" Is a pretty silly hypothetical, to me, because if you look at what these groups are actually doing, you will see that they aren't doing this and aren't really trying to do so!
I get your point that it isn't currently deemed at risk of being deplatformed - but while there are some differences, Bitfinex are having difficulties with finding people willing to bank with them. So there is precedence there.
Sure! I agree. It might be possible that things will change in the future. And if things change, then I agree that this might cause problems.
The only reason why I am sceptical, though, is because I have heard these same arguments, about how the government will ban Bitcoin, for 6-7 years. And yet it hasn't happened yet.
So it is totally possible that this time is different. But I just feel like, I need to be very sceptical about these arguments, until they actually happen. Because I heard them before, and those people were proven wrong.
But you are right, in that it is very possible that maybe this time is different.
That stuff is all old, banks aren't giving people trouble these days.
Canada is likely to have a BTC ETF in January, so you could say Canada is pretty open to BTC at this point (it is treated like any other exchangeable currency).
Being deplatformed by a bank is less of an issue because there are thousands of banks in the US. If you just need a checking account for your adult business, you're likely to find a bank that doesn't mind. Then you're on the ACH network and should be good to go as far as bitcoin goes. The only ones who could truly deplatform you off the banking system are the government, by making it illegal / highly burdensome to service you.
But the credit card industry is an oligopoly. If Visa or Mastercard don't like you, you're completely screwed as far as online payments go.
This practice is getting seriously annoying in scope of current events like google going into banking bussiness. One part are privacy applications but even worse is that suddenly pulling the application from play store using aurora (3rd part app for those that dont want google mobile services spyware on the phone) could cost you bank account which google will surely tie to google account. This is not good, we are beeing pulled to distopia at progressing rate.
There is this guy I watch on YouTube, he had a Patreon account and a BTC address. I don't want to sign up for Patreon, so I sent him BTC.
The great thing about BTC is you can send it so easily without going through all the hoops other 'systems' need. Sure, it isn't so easy to get started with BTC, but once you are in, it is a breeze.
Are there any payment options that have so far been immune to this issue?
Maybe it's worth setting up alternative payment methods, even if the percent they charge per transaction is much higher, just to ensure stability of access to funds.
Nano is instantly fully-confirmed, secure and immutable. All a model needs to do is display a Nano address (or QR code) in their webcam backdrop, or on their website.
They get instant notification of payments, so have the option of instantly reacting to them. So they can be interactive with their viewers in real-time.
Nano is feeless, unlike Bitcoin, and will always be feeless.
(Bitcoin's fees jumped to $6.25 on June 28 2019 so saying Bitcoin is currently 'cheap' doesn't really cover that.)
Yeah, things like subscribe star exist in part for this reason, and there are plenty of groups that discuss alternative technology, such as this news org https://reclaimthenet.org/ or this group https://gab.com/groups/377 (though the last two mostly focus on political content)
The US marijuana industry is, under federal law, entirely criminal, so that's kind of understandable, even if the underlying law is arguably undesirable.
It would be terrific if as much energy would be spent on shutting down human sex trafficking finances for children and black and international markets.
Certainly there is some % of pornhub sex workers that are there against their will, but the dark web child porn networks are what our primary focus should be going against.
I'm with you except for conflating right wing propagandists with sex workers and the cannabis industry.
Right wing propagandists are rarely deplatformed compared to the other two groups and when they are it's generally for spreading conspiracy theories (remember that people have already died because of Pizzagate and QAnon "truthers") or inciting (racial/religious/homophobic) hatred.
The difference is that right wing propagandists are also a lot more vocal than the other group (or left wingers for that matter), skewing the perception. There's a widely known joke about how many comedians have shows on mainstream platforms with titles like "Cancelled" or "Triggered", complaining about "things you can't say anymore". Also see the "Intellectual Dark Web" whose whole shtick is being "deplatformed" by academia and the mainstream while having a massive mainstream media presence.
At a certain point they will start to ask you "where did you get this coins?" because sooner or later you'll have to convert them to real currencies
Cash is still a better option, there are plenty others: rechargeable CC, gift cards, vouchers, etc etc that work better than bitcoin, require no setup, no knowledge and can be used without hassles.
Bitcoin’s use case for this is limited. If I were to purchase a product or service that might be subject to deplatforming, it’d better be anonymous, or I risk facing the social sanctions instead. “Amezarak’s bitcoin address sent 10BTC to a sex worker, fire him” is not a much better situation.
Before you criticize me for calling a dangerously flawed currency a shitcoin, you should criticize those who use "bitcoin" and "cryptocurrency" interchangeably. Bitcoin was fine back in the day but is terribly flawed in 2019. Are the fanboys never going to move beyond this?
I heard sex workers actually do use Monero when they use crypto (not BTC). It's funny how the supposedly bad UX doesn't matter when there's a compelling reason to use it.
Whatever you might think of the various professions... As long as it is legal, it seems the major payment service providers should not pass on their moral code onto everybody else.
What's next? You get no water/power/whatever if you run a business that the service providers simply do not agree with?
Water/power are utilities and are regulated differently than other industries.
But your general question is an open debate. If you run a hosting company do you have to host things you disagree with? If you run a transaction company doy you have to exchange with parties you disagree with? What if a certain type of transaction is too high risk, do they have to do it anyways?
Personally I'd like to see things lean more towards being agnostic to avoid amplification of the popular opinion but it isn't a cut and dry topic without corner cases or hard to define regulations.
So the general rule is that if the companies holds some kind of user lock in they now must accept all legal users. Since a hosting company has no such lock in and moving to another one lets you reach exactly the same audience then they are safe.
What if the service is more expensive? What if it has poor service quality? What if it makes it hard to find because your're unpopular? Can you easily define answers to these everyone can follow for more than just a single business example of hosting? If you can does everyone agree it's fair enough? This is the debate, not whether you think hosting can have an enforceable set of rules.
> Apple refusing to list an app on the app store, since no else can do so
There are other app stores. Apple just doesn't support using them in their OS.
A much better example would be the ability to extend MobileSafari - Apple can and does do this (e.g. readability mode), but nobody else is allowed to (e.g. Instapaper). You can't choose a different default browser on iOS. There's a fine line between "not supported" and "anticompetitive".
That's a good one. Expanding on the banking one. It would be one thing if Wells Fargo wouldn't do business with you. Is another that they flag your ChexSystems Report so you can't open an account anywhere else.
The answer to those questions depends on what your market dominance is. If you're one of many players in the market, and you're all actively competing against each other, then discriminate all you want - somebody else will cover that niche. But if you're the only option for many people, or there are so few options that the market is not really competitive, then yeah, I think it's perfectly legitimate to force companies to not discriminate.
It's relatively hard to make reliable regulation on "active competition" especially since you're talking about it only being valid with large numbers of players. How is a hosting company with 20 locations supposed to know that today a startup hosting company has closed in Wichita and it can't discriminate anymore since the other competitor in that area upped their per month cost? What defines if competitor #4 farther out qualifies as competition easily enough?
Say you did get the regulation down perfectly though and it was dead simple to follow, why should a black rights activist have to do more work to find out which hosting company wouldn't discriminate while others can just click any and go? The popular debate extends to more than whether or not you think a certain position is enforceable as there is also disagreement about what reasonably solving the problem looks like. Some others would argue focusing on what the vast majority opinions are and ignoring the rest provides more value. Others argue it just provides the illusion that everything was solved instead of letting it be brought to mind.
It's hard in a sense that it requires some regulatory body that proactively monitors the market and issues directives (and then enforces them if they aren't followed). But that kind of thing is exactly what we have governments for.
(I should note that my politics is that of inherent distrust towards all large entities, whether they're governments or private entities. I would prefer the society and its economy to function on the principles that preclude either from existing at all. But regardless of that long-term goal, there's a question of what to do here and now, with the society and economy that we have. It's going to have monopolized markets - and proportionally sized governments are needed to be a check and balance on that.)
As to your second question - well, why shouldn't they? And how much is that overhead in practice, if we're talking about not picking one company out of many? The more socially unacceptable such discrimination is, the more attention to its violators - i.e. well-publicized blacklists, among other things. I seriously doubt that, in your particular example, a company that does that wouldn't be infamous for that exact reason.
And sure, there are people who would disagree with that. This is fundamentally an ethical question, and there's no single objectively correct answer to it; I merely gave mine. Some would say that anti-discrimination has to be enforced even in a truly competitive market, when there's no demonstrable economic harm, purely as a matter of principle. This kind of disagreement is meant to be resolved through a (hopefully) democratic political process.
Surely it should work by availability areas? Web hosting is generally a global market. ISPs can have coverage vary inside a city block. As such, it's very nearly impossible for a customer to run out of web hosting options, but they may only have literally one option for internet providers.
And who decides what defines every availability area and competition map for every product and service every day to see if there is enough coverage/competition? Or are you arguing for a whitelist-to-discriminate model for things with extremely large coverage areas (perhaps worldwide)? If the latter do you think there are enough of these that can be done easily enough to save complexity/cost overall or is it only applicable to a narrow field e.g. web services and other things still need an answer anyways?
Yes, unless many of those other restaurants also discriminate in the same way (which can be treated as an exclusionary cartel).
Keep in mind that our modern anti-discrimination laws were passed at a time where that was demonstrably the case. And I'm not at all sure that it wouldn't also be the case if the anti-discrimination laws were repealed today. My point, rather, is that the purpose of those laws, and really any laws, should be prevention of harm, not a moral statement. If and when we get to the point where discrimination on some basis becomes so marginal that there's no measurable harm from it, it should no longer be illegal. But not until then.
I think even if only a few restaurants in town discriminated against a racial minority, harm would be done. Being excluded from everyday activities because of something like race is inherently harmful, no matter how many other options you have.
Our present laws, for example, allow for organizations with private membership (e.g. churches, but also private clubs and similar) to discriminate more or less arbitrarily on their membership criteria, and then offer services exclusively to the members. It's only public services and offerings that are required to be non-discriminatory. Should we get rid of this arrangement?
Should this be expanded into the private sphere? Everyday activities include talking and otherwise interacting with private people, not just buying goods. If somebody decides to refuse to, say, greet people on the basis of their race or religion, should we consider such behavior inherently harmful, and prohibit it by law?
I always look at it as: can I function in society without X. With that in mind, the general consumer can function just fine in society without hosting. Three* things off the top of my head that SHOULD be regulated as a utility but currently aren't:
ISP/Broadband access
Payment processing
Cellphone/telecom
It's exceedingly difficult to function in 2019 on a strictly cash basis. Just like it's almost impossible to function in society without broadband. On the other hand, I can get by just fine if "hosting" doesn't agree with some questionable content I want to post online. It's more likely to get me a job than prevent me from getting one....
This is pretty much how the US has been going about it. It's been a bit laggard as you have noted though. Some say this is good enough and we should work on updating things, others say the societal cost to just do this everywhere can be lower than the societal cost of being slow to update.
The answer to all of your questions is..."Are you a platform?" [0]
If so, you must accept, by law, all customers/participants/users without prejudice or discrimination, and you may only deny or limit service to same after a written order from a court of law instructing you to do so. Furthermore, this rule supersedes any Terms of Service that a company may wish to enforce.
That's not what we have in the US today—but we should. My money is on the EU crafting legislation to that effect first. I'd normally expect California to implement this kind of legislation first, but given the amount of money donated by the big tech companies, I doubt it'll happen.
[0] A "platform" is any business with a userbase that exceeds 1% of the population (for non-commercial customers, e.g. YouTube/Twitter/Facebook), or in the case of a business-oriented marketplace (such as Amazon's Seller Central), 10% of the specific market the business is targeting with their platform.
Eh, I would be wary of that definition, even though I am totally in support of platforms not being allowed to get rid of content that isn't illegal. There should be way more nuance than what your definition provides.
For example, if I host a very popular forum for discussing cars that somehow manages to exceed 1% of the population of the country it is offered in, I feel like I would be totally justified to remove posts that have nothing to do with cars and talk about completely off-topic stuff like videogames or politics.
The 1% rule is for the US. If you want a higher % for your own country, knock yourself out. It's the principle of the thing that matters anyway, not the exact % that defines a platform.
That said, I see no issue with asking a privately run forum to keep it's membership under 3.4M if they don't want to be regulated like a platform.
If you run a shop, you can't decline service to democrats, even if disagree with them. You can't discriminate, that's the law. I don't see how is it radically different from running a hosting company.
Political affiliation is not a protected class in the US. You're likely to face enough societal backlash this isn't a common issue though. The problem with the societal sort of regulation is it's about whatever is popular not about discrimination.
In the United States I think you can actually. Nothing stops you. You can't discriminate based on a few criteria like race, age, gender (and depending on the state) sexual orientation.
I think PayPal might've publicly said that this is solely because porn poses a greater risks and SFW businesses just due to the amount of actually fraudulent payments and account hacking performed to pay for porn. Also, there's the less obvious issue with charge backs and people lying about getting hacked and having to deal with all that.
My experience in both digital payments and the adult space is that this line of reasoning (high risk + fraud) is outdated. The myth that adult payments are higher risk is perpetuated by those certain PSPs (CCBill, et al) that process adult payments for 15-20%, require 4% reserves, and have very high setup fees.
I would love to see an adult version of Stripe to help innovate payments in the adult industry. Paging @pc???
I’d be curious to see that backed up. Having worked in the industry at one time, all I can say is there is a good reason merchant accounts are super expensive for porn sites. All the players in the game are pretty sketch.
The problem for those providers is often not their own morals per se. But the fear of being related to certain verticals. This oftentimes has a real impact on lost deals from other companies that do have a moral judgment and wont do business with you if you are related say to marijuana selling companies.
In that case, wouldn't this be a great opportunity to start a payment processor that (mainly) deals with these "fringe" verticals? What's stopping someone from creating MoralPay (or whatever) that accepts all money from adult entertainment, dispensaries, etc. From what I understand there is a huge market for processing legal monies from these types of businesses, especially dispensaries.
Is it too difficult in 2019 to start a payment processor? Is there some legal requirement that is preventing it? Some people said that creating a new car company in today's market would be impossible (too many regulations, expense, etc.) but Tesla seems to be doing pretty well. Is there a "Tesla" for the payment processing industry?
I totally agree with you but I wonder if it’s a moral thing (like those assholes have any) or if it’s a fraud thing. I’ve worked in the online dating space and we always had trouble with payment providers due to a really high rate of fraudulent transactions.
Talk to tobacco about being deplatformed. Tobacco companies have banking, but fewer places sell cigarettes or allow smoking. It’s not discrimination —- neither cam girls or tobacco farmers are a protected class. Payment processing isn’t a right.
So you want to compel me, against my will, to do business with you, with the full force of government. I would take a more libertarian view and say I don’t want to work with tobacco/guns/cannabis/pornography and I think it’s a bad idea for the government to make me.
I quite agree. I however maintain that everybody should have access to payment processing services regardless. I think this circle can in fact be squared.
A chilling effect on free speech. Real alternatives to paypal and credit cards need to enter the market.
It sadly looks like my favorite hope is still not ready, but I am hopeful that this is due to slow and careful development that will lead to a stable long term outcome. https://taler.net/en/faq.html
There are alternatives. Even obvious ones like wire transfers (ACH, SEPA) which have less fraud due to enforced two-factor and better online banking cyber security. PayPal, on the other hand, is free game after you infect a Windows PC with any malware.
The problem is that your CC number is both username and password. Cardsters are looking ways to convert soft credit card money to something without chargebacks. These services are fraud and money laundering magnets. Think it as a same as publishing fake eBooks on Amazon and then sell them to launder your income clean.
3D Secure solves part of this problem. But there are two issues with it (1) some companies like PayPal have forced banks to make an exception for them (2) your credit card number can still be used in other contexts but much less conveniently than it used to be able to.
Also, there are a lot of really really bad implementations of 3D Secure (the most common problem being having it hosted on a domain that's not bankname.com but some outsourced company)
This is a real opportunity for the new cohort of challenger banks like the Cash App, Chime, N26 and Monzo. You could probably win a lot of businesses and their customers by agreeing to process payments for businesses that PayPal won't. Combine that with the fact that the Venmo-like P2P payments these startups provide are fast and free and you've got another reason for merchants to switch.
Stripe won't touch adult content, I've tried (chargeback ratio is very high, I don't blame them). Very hard to find processors who will work with adult content of any sort.
The real problem is that person to person money transfers shouldn't be prohibited unless by law. Perhaps Pornhub, in the US at least, could use something like Zelle to mediate transfers between patrons and performers (using their bank account to make Zelle requests, and then distributing that out to performers with Zelle). At least until the Fed gets their ACH modernization act together and we get near real time payments.
I think this is a US thing. I've tried to do chargebacks before in Europe because a website wouldn't stop billing me, and was told the only thing I could do is cut up the card and get issued a new one.
Which country/processor? This is normally regulated and there are explicit processes around chargebacks. It's surprising/suspicious that you'd ever be refused one.
Chargebacks happen after the fact; they won't prevent the same merchant from charging you again in the future. (You can, of course, issue a chargeback on those payments as well)
Getting a new card doesn't necessarily stop recurring bills as trusted merchants can use features like Visa Account Updater or Mastercard Automatic Billing Updater. Though in practice, these trusted merchants usually have easy cancellation flows.
US PayPal is not a bank. They don't actually perform money transfers between individuals. You pay PayPal and they disburse it to your designee. There are two transactions involved.
> A chilling effect on free speech. Real alternatives to paypal and credit cards need to enter the market.
This would have been a huge problem in 2012, Now there are realistic solutions to avoid this. Just pay by cryptocurrencies on to a Coinbase Card and you can withdraw the cash and pay anonymously.
No they aren't, because porn is available for free in abundance everywhere. I can't download a coffee from a torrent site or stream it from a tube site.
The fact that people pay for porn at all is a small marvel.
I might be willing to accept that people would more motivated to jump through some hoops to get porn than they would for coffee if porn weren't available without that hoop jumping.
All this sort of thing will do is make it harder for independent content producers to profit
I'm willing to accept that but I think it would still lower the amount of income significantly. Sure people would still pay for custom porn or specific clips that are hard to find (though even then I'd suspect quite a bit less than they do now), but they probably wouldn't join any subscription based sites for example.
As I understand it, this is less about subscription based sites and specifically about cam models on pornhub. While I agree that this extra step would be a barrier to a casual consumer, I agree with the parent that people who pay for porn will pay for specific porn. if a person is already paying a specific model (or models) on pornhub, they've found what they want and a fair amount will continue to pay for it even if it takes additional steps.
I've just discovered Coinbase Commerce [1], it's an awesome way to quickly start accepting cryptocurrencies, they offer hosted payment pages, payment buttons, webhooks, everything you want. It took me a couple of minutes to sign up and configure a hosted payment page to start accepting donations for my projects.
It's rare that I'm excited about a service, but this one appears to come with no strings attached, the wallet is even generated on the client-side.
It really isn't, you should check my profile. I have discovered the service shortly before posting, the parent mentioned Coinbase, and I thought it would be helpful to share this with others. People are sometimes genuinely excited about free services that don't exist solely to exploit them in some way.
As you've noted, I've shared my first impressions about the service, and I don't think there's anything wrong with that. Please make sure to follow discussion guidelines, and try to refrain from personal attacks.
It will have a chilling effect on Pornhub for sure, but porn and commerce speech are already both separately and specifically quite limited in their free speech protections in the U.S. https://en.m.wikipedia.org/wiki/United_States_free_speech_ex... Put them together and it might be difficult to demonstrate that there was much expectation of free speech in this case in the first place.
Cryptocoins aren't practical enough (yet?) to rely on completely for stuff like this. If the flow has any more friction than "payer enters their credit card info once, then agrees to send a value; payee receives it in their bank account at a set time and can immediately use it to buy groceries", it's going to seriously affect some people's incomes.
I'm not downvoting you for that, FYI, but I am downvoting you for the smug edit.
> Cryptocoins aren't practical enough (yet?) to rely on completely for stuff like this.
Really? I can understand "Bitcoin" as one of many cryptocurrencies that are unstable and very slow for these payments, but some cryptocurrencies are faster and cheaper than others and are suitable for this use-case.
There are many ways to pay nowadays:
1. Scan a QR Code to send cryptocurrencies to the payee.
2. Type the address of the recipient into the form / app and send the amount.
3. Coinbase Card number / crypto address.
No. (3) compliments the current fiat system and also works like a debit card, with several features: It allows the user to switch between multiple currencies in their Coinbase Card; not just Bitcoin. They can also withdraw from an ATM and receive its fiat currency and the card is compatible with direct debits.
Depending on the cryptocurrency you use to send them over to another user, cryptocurrencies like Stellar and Ripple are much suitable for this and can be withdrawn into cash and can be sent faster than Bitcoin. No need for PayPal.
I do not know that much about blockchain, so can you tell me if I am wrong, so if I use bitcoin to pay my rent and use bitcoin to buy something from PornHub now anybody can link this 2 payments and as the number of payments to different things increases I can be publicly identified.
I read that some people would say don't use bgitoin use X or use process Y but then it is more convoluted then you would suggest initially.
The typical way to go about this would be creating separate Bitcoin wallets for different types of purchases. Many wallet clients support this out of the box.
Personally, I generate a new wallet for every transaction.
But how do I transfer bitcoins from your main wallet to the new one without having this transaction public so linking your wallets.
As I said I did not researched this topic or own bitcoings, my scenario is that say we all use bitcoins everywhere, then I or you manage to upset some internet community, then they will start "hunting" , they could grab a list of all the transaction, see what you bought/sell from who you received money, who did you sent money , they could "cancel" people even faster then today.
> But how do I transfer bitcoins from your main wallet to the new one without having this transaction public so linking your wallets.
Don’t transfer between personal wallets: when you purchase BTC, send it directly to the wallet you’ll use those funds with.
Transaction mixers (there are other names, but i think mixer is/was common) are a viable way to deter this kind of attack, as they muddy the transaction history between you and who you wish to pay (or yourself). You’ll have to pay for anything that’ll stand up to dedicated government/professional scrutiny, but i’ve seen more sites with some measure of mixing built in lately.
Thanks for the response, IMO this issue should be addressed and be built in into the protocol before regular users could just start using it, so IMO using bitcoing for the PornHub is not a general solution and people that promote it without mentioning the anonymity problem are making a disservice.
> so IMO using bitcoing for the PornHub is not a general solution and people that promote it without mentioning the anonymity problem are making a disservice.
Well this is exactly why I said "cryptocurrencies" and not just only Bitcoin. Some of them respect your privacy and some do not. Some transfer faster than others.
I think the vendors are often reluctant to move to systems like this as well, because a lot of their business model is of the form "subscribe to this thing" and put a recurring charge on the credit card in the hopes that the customer will be reluctant or embarrassed to cancel.
But it's not that simple. How do you handle fraudulent paments when you can never refund a bitcoin transaction?
What about scale? If 20 million people used bitcoin, it would take over a month for a single transaction to process. You couldn't even use bitcoin to pay for rent on time.
And no, the solutions to these problems are tacked on and over-engineered, which to GP's point, is too complex for average payment users.
There's almost no reason payment couldn't be handled with a reputable, totally decentralized stablecoin like Dai. The solutions exist, but they need to be socialized and streamlined.
The only crypto that will ever matter is one fully endorsed by banks.
At the end of the day you can't spend cryptocurrencies. When Walmart accepts a cryptocurrency then maybe people will consider actually using it. Paying people in some weird unheard of stable coin doesn't help anyone if it can't be easily converted into real currency that people use and accept.
I'm surprised that people suddenly think that banks aren't greedy enough to profit from the porn industry!
Maybe the reason PayPal and so many other companies won't service adult industries is that there are laws that put them within arms reach of criminal liability?
On a related note, this reminds me of Operation Choke Point (2013-2017), where the DOJ harassed banks that did business with customers in legal, but "undesirable", industries [1].
There are plenty of porn friendly payment providers. They just cost a lot of money relative to "normal" merchants because of a few simple reasons:
1) Chargebacks -- people chargeback the shit out of these kinds of transactions. Significant other sees the bill, gets pissed / confused about the charge / whatever
and gets it charged back.
2) Fraud -- people use stolen CC's to pay for this kind of thing.
3) Porn operators are, as a whole, rather shady themselves and present their own set of risks to a payment provider. A lot of those chargebacks in #1 are actually valid chargebacks.
You could say "use bitcoin", which would solve the chargeback problem but do nothing for fraud and shady porn sites. If anything it would exacerbate the shady behavior because consumers would have no recourse against fraud.
In short, collecting payment for porn sites a tough, costly business.
Used to work in a business that sold porn DVDs and had to deal with chargebacks. We had an inbound sales call center, and a customer service one where you could cancel.
Among the chargebacks, fraud is the most common reason code, but the amount of true fraud such as stolen credit cards is astoundingly low to the point of being almost non-existent. I would say 90% of cases were the angry spouse and the man denying it. The most common actual fraud you would see is a relative who lives in the house using it, say a grandson using grandma's credit card or adult children running up a $4k tab after their parent died.
Also I had to find friendly merchant banks, the problem with this is it is very much a two-way trust street. Just as there are tons of shady porn providers, there are tons of shady merchant banks. Some will hold your money for no reason and can jeopardize your whole business, so we always had everything spread across multiple banks but that could still be problematic.
We eat the loss and the chargeback fee, it's just a cost of business.
It's not worth it to ban the customer. 90% of them don't buy again. Of the 10% that do, it's worth it to keep their business and risk the chargebacks. Most of them get better at hiding the porn. Also if we did this we would end up banning great customers who closed their card due to actual fraud and the bank just ending charging back everything after a certain date.
There just weren't really that many trying to scam us out of DVDs. Other business factors affect your chargeback rate way more than these customers.
What's the percentage of porn-related shadiness is because our society and business culture forces that? It seems similar to drug prohibitions etc. I haven't had to deal with a shady drug dealer in years now that weed is legal. Maybe if vice-clauses and the like weren't so ubiquitous we'd see more upright actors in the field.
Historically, you see more prostitution in uptight eras (Victorian, etc) where "good girls don't."
More recently, research suggests that rates of sexual assault go down when porn is readily available. It's a controversial thing that a lot of people don't want to hear at least in part because it directly contradicts a lot of feminist narrative that rape is about power, not desire.
With 7 billion people on the planet, I'm not losing sleep over this possibility. Especially since I am increasingly seeing stories about outright elderly women giving birth, a la a joke I read forever ago that "In the future, the pressure to produce grandkids will go way down because our grandparents will still be having babies."
It is legal (in the US) for people (of legal age) to purchase pornography* .
The fact that there is a cultural disapproval of pornography is not that much like there being laws restricting it.
Also, some things should be socially discouraged while being legal.
If you mean this as purely a descriptive question, then I suppose that yes, if fewer contracts excluded pornographic content from some service, then (nearly tautologically) there would be more services which permit it,
and this might make some able to be more trustworthy about things.
However, normatively, I think the fact that pornography is viewed negatively, at least in public, is a good thing.
> I think the fact that pornography is viewed negatively, at least in public, is a good thing.
I'd love to see your thoughts on this expanded. I don't have a particularly rigorously formed opinion on this, but my gut disagrees. I'd settle for some links to articles/etc. that reflect your viewpoint.
Not OP, but my gut agrees with his. Very tricky issue and I don't think anyone can say who is "right", so I fall back to one universal principle to inform my opinion here, as well as a general societal observation.
The principle: moderation is almost always best. This applies to food and exercise, to work/life balance, to sex and drugs, and everything in between. Pornography consumption generally does not represent "moderation" of sex, but the extreme end of it - you crave sexual stimulation so badly that you resort to watching other people having their sexual urges fulfilled (which can then make the porn consumer less motivated to pursue healthy avenues to achieve their own sexual fulfillment, leading to a downward spiral). People will always be drawn to porn because sex is the one "addiction" that almost everyone is born with, but having a thin healthy layer of public shame helps to encourage people not to go too far down the rabbit hole.
Societal observation: society seems to be becoming shallower, more transactional, particularly in the realm of dating. In my opinion, unrealistic expectations of each other in a sexual context is one of the biggest causes of this, because when those expectations go unmet people move on to the next person they find on some app, instead of investing time into building a relationship and seeing if it can work (and growing themselves as a result of that investment). I think pornography contributes to these unrealistic expectations, and thus to making society more shallow.
I'm always cautious to dive into this too much in today's political climate, but I also think there are significant societal downsides to the more extreme levels of sexual liberation that are rapidly becoming normalized in American society (possibly all of western society, but I'm a bit too ignorant to speak on that). I think pornography contributes to this as well.
> Pornography consumption generally does not represent "moderation" of sex, but the extreme end of it - you crave sexual stimulation so badly that you resort to watching other people having their sexual urges fulfilled (which can then make the porn consumer less motivated to pursue healthy avenues to achieve their own sexual fulfillment, leading to a downward spiral).
This is equal parts editorializing and [citation needed]. Keep in mind that correlation != causation.
> I also think there are significant societal downsides to the more extreme levels of sexual liberation that are rapidly becoming normalized in American society
What downsides? What exactly do you mean by "extreme levels of sexual liberation"?
> This is equal parts editorializing and [citation needed]. Keep in mind that correlation != causation.
If you still trust any citations to social science research in 2019, I have a bridge to sell you. Unfortunately it is my strong belief that for the moment, we're on our own on this one. When discussing climate change, programming language trade-offs, tax policy, etc, give me all the evidence and data. But for this particular area of study, I trust my own observations/life experiences more than any research. I'm sure you and many other HNers will hate that answer, but I stand by it.
As to your second point, if shallow and transactional sexual relationships becoming more common does not seem to you like a downside, I doubt we will ever see eye to eye on this. For this particular subset of the issue though, you can google "consequences of extreme sexual liberation" and find any number of articles that describe this position and list the various downsides, most of them more clearly and articulately than I can (and some will also describe the behavioral patterns that could be characterized as "extreme sexual liberation"). I'm unwilling to go into more detail as sharing my opinions on topics less controversial than this has resulted in real life threats more than once.
Edit: In case it wasn't clear I just want to explicitly state my position: I am glad that pornography exists, I am glad that it is legal, and I am glad there is a bit of a stigma around it. I hope none of those things change.
> I'm sure you and many other HNers will hate that answer, but I stand by it.
I don't "hate" it; I just don't think it's worth anything. It's incredibly foolish to think that your own experiences qualify you to make sweeping statements about something as weird and subtle as human sexuality.
> As to your second point, if shallow and transactional sexual relationships becoming more common does not seem to you like a downside, I doubt we will ever see eye to eye on this.
Probably not. They're not my cup of tea personally, just because I am who I am, but again I don't consider that a basis for making a value judgment. I would love to hear you clearly articulate why you do attach a negative value judgment to this hypothetical increase in casual sex. Maybe you will change my mind—I am a reasonable person.
> google "consequences of extreme sexual liberation" and find any number of articles
The results of this were laughable. Nothing but more opinion and editorializing (that seems to be a theme here).
> I'm unwilling to go into more detail as sharing my opinions on topics less controversial than this has resulted in real life threats more than once.
Well, this is the internet and I'm not going to threaten you. If you can't produce a cogent argument, that's on you.
> Pornography consumption generally does not represent "moderation" of sex
What about couples with different libido (and functioning well otherwise). What about people who can't find a couple. What about people from any LGBTQ minority (and especially in countries where it is way less liberal/legal than USA?). I hate myself for saying that, but I think that particular phrase above is a symptom of a privileged position, since following "investing time into building a relationship" sounds quite similar to "why you just don't stop doing crime/drugs/alcohol and go to college", "why you just don't stop eat and do some runs instead".
It's really interesting to see the two responses to this, one "trad" and one socialist! I'll give my two cents as well.
I'm persuaded by the arguments of second-wave, sort-of "sex-negative" feminists like Catherine McKinnon and Andrea Dworkin. Modern feminism seems mostly to have moved towards supporting the idea that sex work can be empowering and freely chosen. And it's true that with the internet this can be much more of a reality. Still, most of what I've read, and documentaries such as Hot Girls Wanted, imply that the vast majority of women working in porn and sex work have concomitant drug and alcohol problems and/or mental illness, and the job takes a huge psychological toll. It's not conducive with happiness and a positive image of oneself and others.
I think it's probably good (not to mention unavoidable) that pornography exists in society, but it should be less abundant and more stigmatised.
Pornography is a symptom of the commodification of sex, much like legal prostitution, sugar-daddies, and even the transactional swiping hookup apps that dominate dating among lower age groups. It is the tendency of a capital-dominated culture to turn everything into a commodity that is bought and sold; sex is merely one element that this system has consumed. After the wide acceptance of the birth control pill, the trend has been for women to take the same career and life path as men. Women no longer need long term relationships for sex or material needs; sex in the age of the birth control pill is done on women's terms and negotiated for a price they accept, as long as that relationship does not interfere with maximum capitalist production.
It's possible that if sex were not a commodity, we would be happier and more mentally healthy.
Sex was bought and sold long before capitalism, though.
And I don't even mean prostitution, although that one is obvious. But in traditional patriarchal societies, brides are often effectively bought and sold, and sex is a part of that package. The difference is whether the benefactor is the woman herself, or somebody else.
In a very cynical sense, in a traditional society, women are "capital" of a very special kind - they are the "means of production" of heirs. And heirs are necessary for the family line to accumulate other kinds of capital over time.
Agreed. And I think a large fraction of men (the ones who naturally suck at seducing women to begin with), if given the means to both reproduce and achieve sexual gratification WITHOUT women, would leap at the opportunity. Women recognize this, which is why they so heavily resist things like sex robots or even male contraception.
Jango Fett from Star Wars Episode 2 was an archetypal MGTOW and ahead of his time: cloning himself and investing all of his resources in transferring his accumulated life experience and knowledge to his "son"....no resource-sharing woman involved.
Personally I consider that a very dystopian potential future....
Women most certainly don't resist male contraception. On the contrary, women are usually the ones who have to keep reminding men to do it, or to use more reliable methods. For fairly obvious reasons: women are the ones who have to deal with far more serious consequences of unprotected sex.
And as for robots... consider the relative popularity of mechanical aids such as vibrators for women, and for men. I'd say that women have embraced sex robots a long time ago.
>>>Women most certainly don't resist male contraception. On the contrary, women are usually the ones who have to keep reminding men to do it, or to use more reliable methods.
I should have clarified, I wasn't referring to condoms but to pill-style oral contraceptives. Entirely my fault for the lack of specificity.[1][2]
>>>I'd say that women have embraced sex robots a long time ago.
I was hoping for some studies. This is a good example of "anecdotes are not data", and especially so that most of these are tabloid op-eds. It's a stretch to conclude something as broad as "women resist things like sex robots and male contraception" - such a claim strongly implies the majority, but all I'm seeing here is a few angry people, and sensationalist journalists happy to give them a platform.
From[1]: "For the second question, we found a marginal effect with men being more open to the idea of having sex robots (36 men in favor vs. 21 against) as a result of filling out the survey, while women being more against it (19 women in favor vs. 24 against)"
Or from[2]:"The only specific robot type with significant effects was sex robots: men (Mdn=3) reported them as being significantly more useful (women, Mdn=4), and men (Mdn=5) were also more willing to acquire a sex robot (women, Mdn=5)."
But both of these are user/owner-based perspectives on sex robots, rather than directly answering "How do you feel about competing with robots in the sexual marketplace?"
However, [3] points out that "Women compete by enhancing physical appearance and denigrating rivals’ reputations." [emphasis mine]. It stands to reason that women would continue to denigrate sexual competitors, even if those competitors are artificial constructs.
What do you make of dowries, where the bride's family transfers wealth to the groom's family? Are they buying the sex of the groom? This would be consistent with what you are saying. Dowries (wealth from bride's family to groom's family) are much more common today and throughout history than a dower (the reverse wealth transfer).
> I don't flash my credentials to win arguments online
I'll interpret that as "I don't have any relevant credentials."
Credentials often mean something. I see armchair lawyering all the time on HN, and as a actual attorney I find it both concerning and unsurprising how much ignorance exists of the actual law, enough for me to periodically step in and say something (and reveal my bona fides because I think it's relevant) when I think such a misunderstanding could be harmful to readers who may mistakenly rely on such assertions.
Your summary judgment of the mental health of the practitioners of the world's oldest profession is already unconvincing; the fact that you have no actual training or expertise in this area makes us trust you even less.
There's enough nuance in "mentally stable" that having some actual credentials, training, or at least pointing out relevant studies would be useful. Otherwise it does look like you're equate your moral stance with mental health diagnosis.
> 1) Chargebacks -- people chargeback the shit out of these kinds of transactions.
So perhaps offer a payment system without chargebacks? Direct bank transfers also do not offer chargebacks and people use them for payment for goods and services.
In the US, the most common ACH debit and credit transfers can be “returned,” which is similar to a chargeback. This is covered by Subpart A of Regulation E of the Federal Reserve. Only “wire transfers” such as Fedwire and SWIFT transfers, which consumers rarely make here, offer final, irrevocable* payments the way many other countries’ normal domestic transfer systems do.
* Meaning they can’t be undone through the payment system. Sometimes it’s possible to sue the recipient or recover the money in other ways.
> If anything it would exacerbate the shady behavior because consumers would have no recourse against fraud.
Cryptocurrency works quite a bit differently to credit cards. "Fraud" in the usual sense isn't possible: it is not possible for the service provider to take your money merely by falsely claiming that you authorised a payment. Payments can only be initiated by the client.
> Porn operators are, as a whole, rather shady themselves and present their own set of risks to a payment provider. A lot of those chargebacks in #1 are actually valid chargebacks.
Society holds such jobs in low esteem, so the kind of people who take them are the ones that are not worried about their reputation. There are a few who buck the trend and keep it classy, but most are just the kind of people who will do anything for a quick buck, including double-charging paying customers.
It's a viscous cycle, really. We treat porn producers like dirt only only dirty people want to take the job which further reinforces our stereotypes about said people. Plus the barrier to entry is real low and brand loyalty is almost nonexistent so it's a prime industry for fly-by-night operators.
I knew someone who was involved in the 1-900 business in the 90's. Apparently back then it was relatively common to DoS your competition by running up a lot of fraudulent calls to their numbers. The hope being that the telco would cut them off, and you'd have one less competitor.
For my friend who was hit by this, it really sucked, because telco billing chargebacks in those days took 3 months or more, so it looked like he had hockey-stick month-over-month growth... until suddenly he didn't, because most of the "growth" was fraudulent charges intended to get him shut down.
Sound like a sort of catch 22. Payment processors treat them as second class citizens, so first class who would not do shady business don't dare set up in the industry. And so the reputation of the ones who do validates the processors' line of thinking.
Have worked in men's and women's porn. Women have this solved, all their porn is from Amazon. Historically don't chargeback so that hurdle never existed.
I wouldn't be surprised if more than half of Kindle revenue and certainly more than half of Kindle profits were just women's porn. Amazon occasionally has half-hearted crackdowns because some conservative finds it and complains.
> They would have zero chargeback percentage. Just think about it.
LOL. Great for the shady porn site operators but not at all good for the consumer who has no recourse. A lot of those chargebacks are perfectly valid because the site operator is some shady fly-by-night site doing shady stuff.
On the plus side, it's not like they can just grab money out of your wallet with Crypto. You have to initiate the transfer. No "typos" when running your card. No double charges. It actually seems like a valid use case for crypto. Downside is the high fees and/or long waits for the coins to clear.
Cryptocurrency exchanges seem to be solving those problems. They transact between participants in thousands per second. Bybit has no fees on deposits/withdrawals (withdrawals can be batched to avoid network fees); but network fees are not a disaster - currently network fees are: a) in 1 block 0.27 USD/tx; b) in 6 blocks 0.10 USD/tx.
The fundamental problem with those exchanges is that they are sitting on your wallet. So now you're back to all of the problems with traditional banks. If someone wants to double-charge then it's up to the exchange to prevent it, the blockchain itself doesn't come into play. Worse, a great many exchanges in the past (almost all thus far) have proven to be fraudulent, incompetent, or both.
Have they set the MCC to Restaurant too? I have to imagine that triggers bonus categories for dining on credit cards, like the 4X on the Amex Gold and 3X on Sapphire Reserve. That's a heck of a bonus category haha.
I'd just like to add E11EVEN is not a strip club. It is in fact a burlesque club. There is some nudity but not in the same way as a strip club. For any Miami-based HNers, you can find me at the nearby bar, you'll know the one.
To each their own, its a small dive bar that is generally over crowded with bad service, on the plus side they have good drinks at good prices. But when people say they are at the bar across the street from E11even it means the corner. Its also big for people in the service industry.
It's not bad. Just a simple dive bar withe pretty good selection of beers and spirits I've rarely heard of. Unlike Wynwood I've always had success finding streetside parking.
I work with credit card data, and I'm always astounded at how much ambiguity the banks allow. We see major brands redact what's in the transaction description to the point where it may only say the street intersection of the transaction (Main & 4th), yet the banks have a call center handling questions like, 'I don't recognize this place and it's a $200 charge, so what was it?'. With simple rules to make the transaction descriptions less opaque, I'd think the banks would come out ahead.
These have existed for quite awhile. CCBill was the big player around 10 years ago. They take a slightly larger cut for the service relative to something like a Braintree or a Paypal.
But in all seriousness, imagine using the Apple card for this, and then it comes up with a logo which says exactly what it is, heh :)
The best way to tackle that is to own a media company, and have PornHub as one of its' holdings, and then the bill would appear to be a neutral 'Decent Looking Media Inc.' or something like that.
Crypto replaces a major painpoint (chargeback, getting 0% of your money) with a minor painpoint (volatility, losing or gaining <10% of your money).
There are other cryptocurrencies (eg Tether) that follow USD (eg 1 Tether is almost always equal to $1.00 USD), to avoid issues with volatility.
I guess another issue is that you'd have to pay taxes on any gains/losses between receiving your crypto and cashing it in for USD, and that would be pretty annoying to calculate manually.
I'm not the biggest fan of crypto but I think it actually solves this problem pretty well. There are probably other solutions too though (like only accept debit cards / payment methods that can't be charged back).
> There are other cryptocurrencies (eg Tether) that follow USD (eg 1 Tether is almost always equal to $1.00 USD), to avoid issues with volatility.
One of us is behind the times on Tether; last I heard they were in pretty significant legal/financial trouble re: money laundering, not actually having most of the backing dollars they claimed to, and possibly market manipulation.
There have been various stories floating about litigation, solvency, and market manipulation in tether. So far, the market [1] remains unconvinced: tether trades pretty close to parity (sometimes even at a premium; liquidity preferences being what they are), and prices between tether-based exchange and USD-based exchanges are also pretty tight. So for the moment accepting payment in tether USD is entirely feasible.
What's the turn around time between receiving crypto currency and getting that into e.g. USD in a bank for you? As long as that is short, volatility is minimized.
I think the volatility issue is a major pain-point to people though. As long as you keep your money liquid in cryptocurrency, isn't it essentially holding stock (albeit driven by BTC mining and transactions) in terms of capital gains and losses? But if you use stock, I believe you are required to hold it for periods by the SEC (don't quote me, but, blah blah Holding Period?), so maybe crypto wins in this regard anyway...
I lived through hyperinflation. Sometimes products were updated mid day. Comics used codes that referred to a table because it was not possible to change the price on the cover.
Would there be a way to peg valuation to clock periods? Or a certain number of transaction counts? (Ie., between the next 1000 transactions the value must be exactly 'X'.)
It would also be interesting for the protocol to gain the ability for arbitrage. Or even negotiate whom the arbitrating party would be.
If you want less liquidity, more extreme volatility, and less buyin, sure. But what you just described (absent a central bank; like Tether) is much how dictators have tried to stabilize devaluing currencies.
Derivatives/forex and black markets would develop quickly in any major currency that did this.
AKA, nobody would logically accept your transaction until the time period or count ends, otherwise, there is a significant likelihood of them being wrong.
Bitcoin isn't good for transactions. It's too slow, too cumbersome for he average consumer and its value fluctuates so much that you'd have to have dynamic pricing.
I love the idea of crypto currency and I really do think, one day, some form of it will be out future. But Bitcoin today just doesn't fit that bill at all.
In my recent experience, payments confirm ~5 times within an hour or so.
> too cumbersome for he average consumer
The BitPay wallet is very easy to use. And many sites now use payment URLs, so it's basically just click the link, and hit OK.
> and its value fluctuates so much that you'd have to have dynamic pricing.
I haven't seen anything in recent memory that doesn't use dynamic pricing. Many sellers say something like "this Bitcoin quote is good for X minutes". And the payment URL doesn't work if it's expired.
Their second layer network (lightning) is still very early, but it really does solve a lot of the slowness issues. I use it for purchases a few times a week, and rarely run into issues.
If you have a few minutes and a few dollars in bitcoin, install Breez wallet, and try it with a few sites like yalls.org.
Note: This obviously doesn't solve the value fluctuation problem.
Shouldn’t there be a futures market for bitcoin like there is for commodities? Where a middleman could lock in the price and do the transactions for both sides? The middleman is taking the risk and charging a fee.
Agreed. I'm very optimistic about cryptocurrency as tech in the longer term, but there are still a bunch of problems to be solved. The specific boosterism of Bitcoin is odd and probably counterproductive.
You’re on a porn site. You expect a certain amount of sketchiness. Right now, the customers are the sketchy ones. They pay for a product and or statistically more likely to do chargebacks.
I hate that any online company can set arbitrary Terms of Service which they know for a FACT I have not read (I didn't click) and then decide to pull the rug out from me at any time because of that.
These companies are seriously important in our lives. If you take away my payment source or my email or whatever you are potentially setting me on a path to ruin.
I don't know what the answer is but I do think these companies should be required to have an appeal process of some kind that's regulated. They have so much power.
Even if you did click to accept the terms of service, their server knows you probably didn’t read it. They know exactly how long it was between you being served the contract, and you accepting it.
Clearly if that time is anything under a number of minutes or hours you can’t possibly be agreeing to the contract and so they should be duty bound to refuse service.
I look forward to a test case where a judge rules a terms-of-service contract unenforceable because the vendor logged that I read it in 3.2 seconds and accepted that as me having read it.
Or maybe it’s time to start being that person again, who reads contracts slowly and in full before signing.
Actually I’d suggest we all take some time to learn the law. Actual legal practices and whatever. I’m increasingly of the impression that lawyers are the real first class citizens of a constitutional government.
Perhaps an opportunity for Pornhub themselves to get into the payments business? I assume they have enough transactional volume and vendors to make it happen.
My hunch is that would incur unwanted liability from FOSTA-SESTA [1]. Producing content and paying talent out directly is fairly straightforward for adult entertainment. There be dragons if you're attempting to build a marketplace to do something similar.
"The Stop Enabling Sex Traffickers Act (SESTA) and Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) are the U.S. Senate and House bills that as the FOSTA-SESTA package became law on April 11, 2018. They clarify the country's sex trafficking law to make it illegal to knowingly assist, facilitate, or support sex trafficking, and amend the Section 230 safe harbors of the Communications Decency Act (which make online services immune from civil liability for the actions of their users) to exclude enforcement of federal or state sex trafficking laws from its immunity. Senate sponsor Rob Portman had previously led an investigation into the online classifieds service Backpage (which had been accused of facilitating child sex trafficking), and argued that Section 230 was protecting its "unscrupulous business practices" and was not designed to provide immunity to websites that facilitate sex trafficking."
Doing business with US customers in US dollars and interacting with US banks automatically places you under the jurisdiction of US laws.
Investigators in EU countries often work with US agencies because our laws are so much stricter, and often urge people under investigation to cooperate otherwise they'll turn over the case to the Feds.
Tom Hayes, of LIBOR scandal fame, spilled his guts and signed a confession after being told he might be handed over to the Americans. Then he tried the aspergers defense, followed by the "I only confessed because they threatened me" defense, but neither swayed the jurors and he got 14 (reduced to 11) years in a UK prison.
That's not unique to the US. Countries own their currency and regulate their banks therefore using them gives a country the right to control what you do.
This is grossly oversimplified but generally speaking, if I lived in France and started a payment service that accessed the Japanese banking system and performed transactions in Yen, I would be subject to Japanese banking laws as well as French laws.
Pornhub already runs a marketplace. You can send money to a "verified" model through the site.
The main difference between pornhub and Backpage is that pornhub is for videos but Backpage was for live meetups (Backpage facilitated the sexual acts; pornhub only monetizes them).
>My hunch is that would incur unwanted liability from FOSTA-SESTA [1]. Producing content and paying talent out directly is fairly straightforward for adult entertainment. There be dragons if you're attempting to build a marketplace to do something similar.
If they run any kind of subscription service aren't they already subject to much of the liability for this stuff anyway?
I would be surprised if the best way to free people from sex trafficking is to confiscate money from sex workers. I would also be surprised if the best way was force all sex workers to ask to be paid by a mechanism that either can’t be blocked or can’t be traced.
To adopt a cliche: if you outlaw sex work, only criminals will verb sex workers.
There is a long history of people getting screwed to the point of having their company go out of business because paypal decides that they will freeze their funds for 6 months or that they no longer want to be their payment platform.
It would not be a big issue if there were 3 or 4 competitors .. but as things are, paypal is what people use to buy things online or to send money to a friend.
See, if you have zillions of dollars there all kinds of financial instruments that harm society (say, by reducing taxes paid), but any vice the little people can partake in, either as producers or consumers, well, we have to keep that on a short leash. Or kill it.
The financial industry's policies around sex and pot need a reboot. It's ridiculous what they're restricting.
Presumably there's a reason that payment processors have straight up ban customers instead of increasing fees to cover costs? I mean different industries already have different risk profiles and fees.
I can think of an analogy to interest rates, which vary tremendously depending on risk.
17 years ago, my business partners and I were approached by a porn website looking to get their website redone. (We didn't take the job, but it was an interesting meeting.) He said that his biggest problem was "refunds".
It seems it was a common thing for people to buy his service (access to porn), and then a few days later claim to the credit card company that it was an unauthorized charge.
He told a story of an irate wife calling him on the phone one day and demanding the charge be taken off her husband's credit card bill. She was insistent that there was "no way" her husband would sign up for a porn website. Well of course he did (or was it their son?). But he couldn't admit it to his wife. And so she called the office of the porn website to complain.
I'm sure that hasn't changed 17 years later. Credit card chargebacks must still be a huge problem.
Chargebacks make it a customer service nightmare. One of the highest refund rates that credit cards get, the highest incidence of actual fraud (charges that really weren't authorized), undisclosed recurring charges, etc.
Still, cutting off service to the models seems unfair. But refusing to deal with the websites themselves actually has underlying business reasons other than morality.
I have signed up for trials just because I wanted to grab a certain clip. And while I was in there I would download as much as I can and then cancel. And there is also that once you are done watching the last thing you want to do is watch more. And did I just pay for that? Wasn't worth it.
Risk and compliance, honestly. Margins are razor thin, for instance Square's most recent quarterly filings where they indicated transaction margins had them at ~1%. You mess up, you've gotta process $99 more for every $1 you lost. Compliance paperwork is expensive enough but you make a mistake and prepare to have some uncomfortable chats with the government.
One of the factors in determining your interchange fees as a merchant is your risk profile. It is why a grocery store has a different fee structure than a gas station or a restaurant.
Almost the entire industry is driven by risk profiles.
It feels like there’s two kinds of fraud, and I think you mean both?
(1) I buy a camera online, but the store mails me a brick. The payment provider steps in (at their own cost) to investigate and resolve the fraud, which is costly.
(2) The technology of the payment provider itself is subverted. For example, someone clones the mag stripe on my 1980s credit card and goes on a spending spree. Again, the payment provider picks up the cost of hunting down the malefactors, and they also compensate me. Cost cost cost.
When the payment system is cash, fraud is avoided by using vendors with good reputations, or at least with verifiable business names and addresses to allow legal action if they sell me a 24 megapixel brick. Protecting against subversion of the payment mechanism itself is up to me (keep my wallet safe) and the treasury (fancy holograms on bank notes.)
With modern online payment systems, are they legally obliged to always be on the hook for the first type of fraud? Is the obligation because they are providing a credit line? (I think this is the case in UK law at least, with the Consumer Credit Act.) If the payment provider didn’t want to have to deal with that sort of fraud, do they just have to avoid looking like they are offering credit?
I hope that we can assume that in any modern online system, the only occurrence of the second type of fraud is from insiders, as at launch (or at least, over time) the crypto is unlikely to be breakable on the wire / with card cloning / etc.
It's not about costs. It's about trust and scale, neither of which you can buy.
Payment providers earn a fraction of a percent on transactions, so they must have extremely high volume in payments to be sustainable. It takes hundreds of millions just to be able to afford some workers and office.
Which can't happen because trust and fraud. A legit customer, especially with any amount of volume, would never adopt a small or unknown provider. Corollary, the provider only attracts low grade or fraudsters, assuming they ain't the fraudster themselves.
In a business like that it may be quite difficult to detect exploitation. If they don’t strive do a good job at it (which doesn’t especially align with maximizing revenue), PayPal’s decision may be hard to criticize.
Just because something is legal, doesn't mean it's necessarily neutral. We can still argue this development being negative, for reasons unrelated to "freedom of speech".
There is an alternative called Liberapay[0] but I haven't tried it, so I can't vouch for it. There is also Flattr[1], but Flattr is more for small micropayments to show your appreciation for a project or piece of software (not to mention you need a Paypal account to cash out your earnings). There's also things like Buy Me A Coffee[2], but again, centered around small micropayments (I imagine these performers need more than a coffee, although when you have several fans buying you a coffee it's a good gig). Also: I'm surprised nobody is talking about Patreon[3] (Prolly against their terms of service too though)
An alternative would be a system like M-Pesa. It's based on your personal phone line using the SIM toolkit, though there's also an app. Transactions can only be carried out on the phone with the SIM installed though.
It's great for personal transfers, and many in Kenya already use it to pay sex workers (usually cam girls selling nudes).
Corporates can have numbers (called paybill) where payments are made, though they are vulnerable to government interference. Safaricom (the network carrier running the M-Pesa platform) has already been ordered to shut down accounts belonging to betting firms. But for personal transactions, regulation is hard since nobody can tell why you sent a certain person money.
M-Pesa has never quite gained traction outside Kenya though.
Banks and other financial institutions
are all about minimizing risk. If there is a risk that an account enables sex trafficking or money laundering there may be an internal policy to close the account as well as an obligation under anti money laundering laws to report it to the government. It comes down to the risk appetite of the bank. The bank stands to be fined if it is found not to have reported on suspicious activity and there is reputational risk as well. This is the reason a lot of banks would choose to de-risk and close the accounts.
Since I tend to read ToS and other agreements prior to signing, I was quite surprised to see a similar restriction for Revolut.
In their case it is actually phrased in a way that makes it seem like you are not even allowed to pay for pornographic content with Revolut, not just receive money for it.
Not a problem for me personally but why would payment card providers make such restrictions?
I'm surprised paypal ever worked with pornhub because they have always been skitish about pornography. More than a decade ago I was given a Girls Gone Wild dvd and sold it on ebay only to find out that paypal didn't allow my buyer to pay for pornography. (The seller just used paypal to directly send me money that wasn't tied to ebay so it worked out in the end)
And this is where Square & Patreon's toe-dipping shows it's effects. You can NEVER. N-E-V-E-R allow an organization to have that much power and then not say anything just because they are targeting groups that you happen to also be against, because in the end, they will get a taste of the power they wield, the control they have, and they will abuse it.
Having a legal background, I would really like to evaluate the grounds for a class action for discrimination. Legal tech companies are increasingly taking moral stands, poorly motivated on dubious reasons, on legitimate and lawful activities, while at the same time the industry has a tremendous responsibility in enabling hate speech and gals information.
It really sucks if your money is being seized. I'm now in a situation at MisterTango where they froze my assets because i need do show where my bitcoin money came from. The power they have over you is so great, it really makes you sick.
Yet people still refuse to acknowledge permissionless crypto as an alternate form of exchange. Instead of sticking it to the Man, they want to stick to the Man until the bitter end!
Sounds like a great opportunity to start another payment service. PornHub already has a strong dev team, from what I understand, and it would probably be relatively easy for them.
The Adult industry has always been pretty hot on emerging tech, whilst a shitty move from Paypal, Im sure that they might move to something a little less standard.
Talk about one sided agenda driven reporting...
Vice is such a sad excuse of journalism.
Too bad it is so representative of the entire media world.
Most of us forget something different can exist.
To be clear, there are many issues with this industry, most players are very sketchy especially how they treat the performers.
Thats part of the reason why mainstream businesses don't want anything to do with it.
Maybe if they'll clean up their act and get rid of the criminal elements, an article with this tone would be warranted.
Attacking? I merely observed that he called me a payed shill, something I would consider an attack on my integrity. This convinced me that he has no interest in having a grown up conversation. You are more then welcome to do your own critical reading of the "evidence" provided. I'd start by looking into circular references..
Porn doesn't need a paid lobby for it's popularity. It has a billion avid fans. Mormon home state Utah has the most active commercial porn user base in USA.
No, GP is surprisingly correct, and I’m actually kinda surprised that HN just jumped right to downvotes. But I guess I shouldn’t be. When you attack someone’s heart they writhe in pain. Calling cigarettes “adult pacifiers” for example will really offend someone who is enslaved by cigarettes, even though it’s true. Pointing out the danger and seriousness of today’s horrible porn epidemic will do nothing in a crowd of people enslaved to unchastity in any of its forms except incite their futile wrath. Which is sad, because it’s supposed to help them realize they’re enslaved. Maybe for some it will, and they’ll ask Jesus to ransom them. I applaud you GP, God bless you.
I don't smoke (never have, tried it, not for me), but I still think calling them “adult pacifiers” is an over the top, intentionally inflammatory statement that's not true. If anything, it makes your very real point that people should stop smoking seem ridiculous.
I think the lofty and idealistic "end goal" for cryptocurrencies is to be fiat independent, so you don't need any fiat on/off ramps and you will be able to use it for everyday purchases.
Whether that will realistically happen or not I have no idea, but that's the promised land held onto for true believers.
It's easy to avoid this kind of problems:
- convert to fiat
- open sell order against fiat
- convert to stable coin
...or just for PH to support stable coins internally.
As weird as it sounds I honestly think they should pair with one/more exchanges to support low friction onboarding/exchange - who knows, maybe some of them will convert to traders! :)
Not anymore, is it? Last I heard they were in pretty significant legal trouble due to not actually having the 1:1 real-doller backing they claimed to, or other assets of equivalent value, among other issues.
20 years after the invention of the light bulb, one of the most important inventions of all time, only 3% in the U.S. were using it. We sometimes forget it, but a decade isn't a long time.
Payments are not "tech", they're finance. Things move very slow there.
We can message each other peer-to-peer in real time with end-to-end encryption, but financial messages still move in batches over a 1970s centralized communication system, in plain text and in "near" real time (hours to days), with all limitations of those times affecting how business gets done in 2019.
Judging by the finance industry standards, public-key authentication has yet to prove itself.
-- because it was impractical for most prospective light-bulb users to generate their own electricity and it took decades to build out a network for distributing and metering electricity.
The issue is and always will be the fiat gateways. If you do sufficient volume, someone's going to snoop around and ask questions like, oh, I don't know "where did you get this money and what did you say your business does again?" BTC is not a solution to this problem either. Maybe for the buyer since they're low volume enough not to raise eyebrows one way or the other, but as the vendor it just won't help.
Why not just exchange btc/eth and leave the headache away? Pornhub should move to btc - at least they'll educate some population about cryptocurrency/how to use it. There are many ways to move money in/out, I think one of no fee paths is via bybit (just network fees).
The number of ways in which someone, somewhere will be offended by products or services for sale is growing, driven by a rapidly improving worldwide communication network and delivery system, and by people terrified of the change that brings.
The response by PayPal and many others has been to cut service. With each case, the circle of people finding themselves cut off from the traditional economy grows.
Bitcoin is often criticized for its lack of use cases. I find a very high correlation between the strength of this belief and lack of awareness of financial deplatforming in its many guises.