Bitcoin Payments Less Vulnerable to Fraud than Credit Card Payments

Pierre Noizat has published an excellent article on several issues related to Bitcoin law at Paris Tech Review. Thanks to this Tweet by Jon Matonisfor the link. From that article:

Bitcoin creates an efficient solution to the problem of online fraud through the simple fact that it is much easier to identify trustworthy businesses than to comb through the buying habits of millions of users.

With credit cards, the risk is that someone fraudulently uses someone else’s credit card. The risk is with the buyer. In contrast, since it is impossible to spend someone else’s bitcoins, the risk with the Bitcoin network is with the seller. The seller might take advantage of the fact that the Bitcoin transaction can’t be reversed. And as Noizat points out, there are much more buyers than sellers. Replacing credit card payments with Bitcoin payments would therefore strongly decrease fraud risks, as well as costs.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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