Author: Andy Parkins 2014-04-23 09:57:53
Published on: 2014-04-23T09:57:53+00:00
In an email conversation on April 23, 2014, Mike Hearn discussed the security concerns of Bitcoin in regards to chargeback rates. Despite the "woeful" security of merchants, many still see chargeback rates, and these can be disputed. According to Hearn, merchants win about 40% of chargeback disputes. If the percentage of fraudulent transactions was only 5%, then Bitcoin would already have worse security than magstripe credit cards due to a large enough population of users systematically trying to defraud merchants. EMV transactions have loss rates in the noise, so for merchants who take those, Bitcoin would be dramatically less secure. However, Dr. Andy Parkins noted that only 2% of credit card transactions are ever attempted to be fraudulently charged back. Therefore, if N (the percentage of fraudulent transactions) was 5%, only 2% of those Bitcoin transactions would be fraudulent as well, resulting in a 0.1% chargeback rate for Bitcoin. Despite this, Hearn's concerns about Bitcoin's security remained.
Updated on: 2023-06-08T21:00:32.281778+00:00