Over the course of a year, $18 billion were lost to CC fraud. Meanwhile, CC transactions totaled about $6 trillion [0] (that was 2010, the most recent I could come up with, but it's been increasing every year for a long time so I'll be generous and use it). That's .3% - clearly affordable on the 2-3% merchants typically pay.
Meanwhile, Mt. Gox defrauded users out of about 650,000 bitcoins [1]. This was a single instance of fraud, remember - I'm trying to be generous. Eyeballing this chart [2], I'm going to give bitcoin a clearly-exaggerated 200,000 BTC in daily transactions, or 73 million BTC in a year. This comes out to .9%, or about 3 times higher than CC fraud.
But remember what I said earlier - CC companies essentially insure you against loss by paying out the fraud themselves and then forcing merchants to raise prices a bit to make up for it. In bitcoin, a given person can easily lose thousands, tens of thousands, millions of dollars, all at once. No recompense. So not only is the rate 3 times higher, the outcome is _way_ worse per dollar lost fraudulently.
Multisignature transactions solve the "annnd it's gone" due to hacked merchants/exchanges. The rate may be 3 times higher but bitcoin is almost 1/8th as old as the credit card system. Losing $18 billion a year is not a good sign for a system of such age. At least bitcoin can and has improved and will continue to improve.
Yes, I noticed you failed to address the 13.1 million people a year who have their lives ruined because they had their identity stolen.
> Multisignature transactions solve the "annnd it's gone" due to hacked merchants/exchanges.
Theories are great for people who can afford to lose tens of thousands of dollars. Until the actual rate goes down, recommending bitcoin to average consumers on the basis of "this is supposed to work" is stupid.
> Yes, I noticed you failed to address the 13.1 million people a year who have their lives ruined because they had their identity stolen.
No, I didn't. Here, I'll quote myself:
> CC companies essentially insure you against loss by paying out the fraud themselves and then forcing merchants to raise prices a bit to make up for it.
Almost no one is having their lives ruined. You call your credit card company's fraud department (actually, these days they often catch it first and call you). You spend 20 minutes getting your card canceled and showing them which purchases were fraudulent. You wait three days for a new credit card to show up.
Over the course of a year, $18 billion were lost to CC fraud. Meanwhile, CC transactions totaled about $6 trillion [0] (that was 2010, the most recent I could come up with, but it's been increasing every year for a long time so I'll be generous and use it). That's .3% - clearly affordable on the 2-3% merchants typically pay.
Meanwhile, Mt. Gox defrauded users out of about 650,000 bitcoins [1]. This was a single instance of fraud, remember - I'm trying to be generous. Eyeballing this chart [2], I'm going to give bitcoin a clearly-exaggerated 200,000 BTC in daily transactions, or 73 million BTC in a year. This comes out to .9%, or about 3 times higher than CC fraud.
But remember what I said earlier - CC companies essentially insure you against loss by paying out the fraud themselves and then forcing merchants to raise prices a bit to make up for it. In bitcoin, a given person can easily lose thousands, tens of thousands, millions of dollars, all at once. No recompense. So not only is the rate 3 times higher, the outcome is _way_ worse per dollar lost fraudulently.
[0] http://www.nerdwallet.com/blog/credit-card-data/credit-card-... [1] https://coinreport.net/99-of-mt-gox-bitcoin-losses-likely-fr... [2] https://blockchain.info/charts/estimated-transaction-volume