Zelle is in the US, backed by major banks, and good luck with a claw back.
"But Zelle’s terms are clear: You can’t cancel a payment once it’s been sent if the recipient is already enrolled with Zelle. And if you send money to someone you don’t know for a product or service, you may not get your money back for a product or service that’s not delivered."
>That page explains exactly how to do so, via legal protections.
"Since Regulation E is virtually unknown outside of the financial services industry, few people — let alone customers — know the process of filing a claim."
Oh come on. Zelle and the banks are literally banking on the fact that they are protected by exactly these sorts of unknown processes. Are you really advocating for more of that?
> The difference with crypto
The difference with crypto is that contracts, written in code, can be used to do escrow that don't require a third party centralized company like Zelle to handle the transfers. They also work across borders. No need to tie up the US legal system with 'Regulation E' cases over $1700 rent payments or having to hire lawyers to sue banks.
My point is that, we can work to make this stuff better, or we can keep the status quo of having to learn about 'regulation e'. I'm on the side of working to make this better.
I wish those were called something else. They aren't actually contracts in the sense most people understand the term. And, being code (and immutable, if I understand it), I don't find their existence reassuring from a safety point of view. But that's neither here nor there.
> No need to tie up the US legal system
As (highly) imperfect as it is, the legal system does, at least, provide mechanisms to correct injustices.
The article in the OP is a great example of why removing humans and relying on code is fraught with issues. The problem is that money is often used to exchange for value and things outside of a computer, where smart contracts have little to no reliable mechanism for determining fulfillment of contract conditions. Although, I'm sure smart contracts will be of great use for moving around digital goods.
The code can still involve humans, if that is the escrow system you'd like to use. It just doesn't have to involve a centralized entity. For example, I can imagine an escrow system where you can have third party arbitration, by anyone who wants to participate in the system. Incentivized by the two parties involved.
People say that crypto is just re-inventing what already exists and a lot of it is doing that... I'm ok with that. What exists is not always the best solution.
I agree that is the ultimate solution. But crypto is not necessary to facilitate such an arrangement. As soon as a human can override the outcome, you've negated the point of using mathematical proofs. Because now you're trusting in the human rather than the proof. You can't have it both ways. Either the ultimate authority is math, or it is a human.
They're all consensus mechanisms. If you use any other mechanism to come to a consensus off-chain, then there's no point to using the chain for consensus. You just have an overly complicated distributed database with bad data in it.
I have funds in my wallet. I choose to send them to you. That is human consensus on top of a blockchain, which is the settlement layer.
In the case of escrow contracts. The funds are in a contract. Those funds will be released to a specific wallet only when two humans agree to their human consensus. The blockchain again, is the settlement layer.
When I bought my house, it went through an escrow process. I had to pay some human paper pusher thousands of dollars to do something that really could have just been done by computers for fractions of a cent and in a matter of minutes.
Escrow is one area that you're going to have a hard time arguing with me that isn't a perfect use case for blockchain. I don't care if it is 'overly complicated'... nothing is more overly complicated than the current process today.
A paper check seems antiquated, no? My electrician just did $4k worth of work... am I supposed to drive to the bank, pull out $4k and then risk that being stolen before I give it to them? These seem like common problems.
I did use Zelle for that, required two payments since the limit was $2k/day. Also super lame... why can't I be trusted with my own money? "For your protection."
Perhaps your situation is different, but I can make such payments without using these sorts of services and without using a paper check. Those aren't the only two options.
I don't understand the relevance, though. I'm not comparing cryptocurrency to other new services. I'm comparing it to the more traditional services.
That said, with things like Wise (which I'd never heard of until your comment), it pays to read the fine print and avoid the ones that don't offer any real protection for you.
How does using crypto eliminate the ability to claw back scammed money? There are services that use crypto as payment rails and also offer scam protection.
Cryptocurrency suffers from the same problems if not worse. There have been billions stolen in cryptocurrency due to no regulations and a lack of accountability. In many cases the one robbing the exchanges were the owners themselves...
I'm not batting for either team here, but you just linked one of the PayPals of crypto - ie a company that holds onto your funds on your behalf. So it's not really a rebuttal to their comment.
I did so intentionally. The fact that crypto has still 'PayPals' is exactly my point. Whatever mechanism of value exchange you come up with, there will be intermediaries who pop up to move it around in different ways. Crypto does not 'solve' this.
Both systems have the same problem, in that people need to use intermediaries to accomplish the transactions they want to accomplish. Crypto solves nothing, it converts problems into different problems.
Except I cannot give cash to someone who is not in front of me, while I can send crypto to anyone in the world. You don't need intermediaries to transact in crypto, that's the whole point
