[Cryptography] Keeping Malware from Using Security Hardware

[Ray Dillinger]

On 3/19/25 08:15, Chris Frey wrote:
> Lots of interesting points, but what I see is a conflating of escrow-type
> services with payment services.  Just because credit cards mix payment
> and dispute resolution doesn't mean it always must be that way.
>
> And your (plural) objections about internet commerce are somewhat true,
> but it is not inclusive of all business.
>
> A vendor like IBM can ship a million dollars worth of equipment to
> a customer on the trust of an invoice that doesn't need to be paid for
> 30 days or more.  Do you think that kind of relationship and trust
> cannot absorb a few technicalities like bitcoin?  I'm sure it can.

IBM and the customers to whom it extends million-dollar lines of credit 
are a different case. They have existing relationships, signed 
contracts, and dispute resolution methods in place before a transfer of 
funds is ever made.  Paying in bitcoin would be no different from that 
POV than handing over a suitcase full of cash.  Which, to be clear, they 
do not do and will never do, because cash, like bitcoin, is far too easy 
for someone to irrevocably "misplace."

They will always use a check, or purchase order, or some other 
instrument selected specifically because every step of transferring it 
and converting it into value creates a record linked to real-world ID, 
into the evidentiary record for a dispute resolution process.  If 
something "goes wrong" with a business-acceptable form of payment in 
that scenario, you have layers of access to human beings:  Who 
authorized the payment? Who transmitted it? Who received it? Who 
endorsed it? Who redeemed it?  Any form of payment used for business 
transactions will be able to answer all of these questions and the 
answers will enable actual people to be brought into court if need be.

>   and we have e-commerce (credit cards currently win over everything
> because dispute resolution is baked in).   Mixing all these together
> and declaring bitcoin a loser is not true, in my estimation.

Don't mistake my apathy for hostility here; I don't want bitcoin to 
fail, I just don't care whether it fails. It seems to have found a niche 
as a vehicle for speculation, and that may be enough for it to "succeed" 
according to some criteria for success.  But as someone who's not 
particularly interested in speculation, I don't care whether it does or not.

I'm pointing out that blockchain-protocol coins including bitcoin are 
not suitable for a completely different niche - as a payment method.  
I'm thinking about why they're not suitable for that and what kind of 
digital money would be suitable for that.

Block chain coins are unsuitable for payment methods generally because 
the block chain has horribly limited bandwidth and is prohibitively 
expensive to use for small transactions.  The "bucket shop trading" that 
is the only way to transact outside the block chain re-creates every 
single problem anybody ever had with banks, including the invasions of 
privacy and excessive fees, in the less-trustworthy space of relatively 
unregulated exchanges, while providing almost none of the benefits.  And 
if you're going to face those problems anyway, you have no reason not to 
go through banks.

I think bitcoin is unsuitable as a payment method for business use for 
the same reasons that suitcases full of cash are unsuitable for business 
use. Using it in any straightforward way puts authorization and 
irrevocable settlement in the same hands, and large businesses simply 
don't have employees whose hands they trust that much. The only way they 
can use it is to build an entire infrastructure that collects 
information about everybody involved in the transaction, the same way 
their current payment systems are built. And they already have built 
that infrastructure. It's called "banking."

I think bitcoin is unsuitable as a payment method for e-commerce use 
because it does not serve the trust needs of law-abiding buyers and 
legitimate sellers previously unknown to each other in establishing 
trust to conduct small, infrequent transactions.

These are people who have legitimate business to transact but don't want 
to sink the time and attention and expense into each transaction that 
the existing business infrastructure ("banking") provides for large 
businesses and large payments.  Card settlement provides for some of 
these needs, particularly access to people for dispute resolution. But 
it does so with some undesirable tradeoffs. I'm thinking about whether 
we can do better with some kind of digital money, and if so how.

Bear

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