CryptoCurrency Mining with GPUs *spawn*

Valve also disabled crypto payments once they had statistics on people that would pay using crypto currencies. For Steam, ~50% of purchases using crypto-currencies were fraudulent compared with low single digit percentages for standard currencies.

Regards,
SB

 

What's fraudulent crypto payment?

 

So, two things they stated as being undesirable with Crypto Currency. From the user point of the view the volatility of the currency. Users wondered why sometimes they'd pay a lot of crypto for a game and other times they'd have to pay very little crypto for a game. But instead of getting mad at the volatility of crypto-currencies, they instead would get mad at Valve.

Secondly the major source of fraudulent crypto purchases was because of the source of the crypto. It was illegally obtained and they'd often then have to refund the purchase when I'm assuming the rightful owner of the crypto which wasn't the person making the purchase filed a claim.

That happens to an extent with standard currency practices as well, but as mentioned for standard currencies it's in the low single digits and just happens to be part of doing business. OTOH for crypto-currencies, it was ~50% which is not sustainable for business.

Regards,
SB

 

Can you link to something you've read about this, rather than dazzling us with blurb?

 

Are there regulations that enforce refunds of purchases made with stolen crypto? Or is Valve doing it to be a good citizen.

 

Depending on what was purchased, if it was consumables that are readily resold on Steam, it might be required as part of the US Federal Laws of anti-money laundering activities to at least stop the activities. If they allow the activities to continue then their entire business might possibly be shut down and seized.

 

'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments, says Gabe Newell | PC Gamer

There was another article somewhere that talked about some of the specifics of what Valve considers fraudulent, but I can't seem to find it again, so likely it was a link from one of the various articles quoting from this one.

Regards,
SB

 

Despite Steam accepting BTC or not, do we have any real evidence that mining is slowing down?

BTC is still up: Bitcoin Hashrate Chart - BTC Hashrate - CoinWarz
ETH is still up: Ethereum Hashrate Chart - ETH Hashrate - CoinWarz

This doesn't look to me like some full-stop of mining purchases. I'm open to alternate hypothesis...

 

Was the fraud related to gamers buying games with crypto and then selling their account for $?

Or was it fake games that were put on the store, in order to use Steam's crypto-checkout feature, which insiders used to launder crypto?

Or?...

'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments | Hacker News (ycombinator.com)

I couldn't find a description of the fraud in this thread. So, still mystified as to the actual fraud that Gabe is referring to.

The first theory there is to do with zero-confirmation fraud. But actual instances of zero-confirmation fraud are hard to find. You have to have been fairly expert with the command line in a bitcoin wallet in order to have performed zero-confirmation fraud in the period 2016/4 to 2017/12 when Steam purchases were possible. I'm certainly not saying it's impossible.

[2016-09-17] Steam Switched Back to Zero-Confirmation Bitcoin Transactions (bitcointalk.org)

The concept of zero-confirmation fraud is very old and BitPay, the service that processed bitcoin payments on behalf of Steam, had monitoring in place to combat this, back then:

How do I prevent double-spend fraud on unconfirmed payments? – BitPay Support

The "Paid" status is the "high risk of double-spend" in the table on that page, corresponding with zero confirmation. Back in November 2016:

BitPay Deploys Advanced Merchant Risk Mitigation for Transactions

Unfortunately in 2016 the BTC network decided to add the replace by fee feature which, in terms of the whitepaper definition of bitcoin is always fraud. But that's another story.

Replace by Fee allows a transaction to be re-sent with a higher fee. But it's possible that the re-send does not include the address of the merchant that originally invoiced the customer, thus committing fraud against the merchant:

zero confirmation - What does a merchant need to do to reject RBF transactions - Bitcoin Stack Exchange

Anyway, BitPay monitoring can easily see that a transaction was sent with the option to perform replace by fee enabled (the replace by fee transaction would come later). If that option is set to on for the original transaction, then BitPay can require 1 confirmation (as explained in that answer), which then means zero-confirmation fraud isn't possible for the purchase. So using the replace by fee feature of bitcoin to defraud Steam was impossible once BitPay implemented this monitoring. It's unclear when BitPay actually activated replace by fee monitoring though.

Or maybe fraud was actually defined by Steam as accounts that were banned after games were bought (with bitcoin), e.g. for phishing, scamming - or maybe just breaking some rule. "This guy bought loads of stuff with bitcoin. Later we banned him for being an arsehole on the forum. Fucking fraudsters, they all use bitcoin."

So, I cannot determine the actual fraud mechanism, which is why I asked for clarification.

So in the end, it's impressive how Gabe says something almost meaningless and it's lapped up at face value. Transaction fraud would have been extremely rare, so I can't see how payment with bitcoin, per se, was the fraud technique.

Your Bitcoin is no good here—Steam stops accepting cryptocurrency | Ars Technica

No mention of fraud.

 

Also just have to say I agree with everything Jawed has laid out. Despite several high profile cases of digital currency theft, I'm not aware of literally any cases where someone was made to "refund" stolen currency. As in, once the blockchain has decided it's yours, there's no transaction rollback. Who would even be the governing authority over this? Ultimately how would you even properly (externally) trace it to begin with?

 

Unfortunately this view of ownership is wrong. It's very commonly held in the cryptoverse.

There are many cases of bitcoin being seized. Sometimes it's sold and other times it's returned.

Cryptocurrency: Ethereum worth millions returned to scam victims - BBC News

Bitcoin is property in many countries and so conventional property laws apply.

As to transaction rollback, well, that's an on-going saga... It will probably take a few years to conclude.

 

This likely won't help to clarify much, but it contains the quotes from Gabe Newell that I mentioned before about some of the fraudulent activity.

Gabe Newell talks Steam Deck, crypto risks and why the PC industry “won’t tolerate” closed platforms | Rock Paper Shotgun

Regards,
SB

 

Crypto, nothing but trouble.

 

Fortunately NFT resolves all the troubles...

 

I bought Elden Ring with a right-clicked jpg.

I wonder if we'll anger the NFT police again?

 

I'm familiar with siezure, that wasn't where I was aiming. I'd be curious to see where a stolen bitcoin was spend somewhere and that whole transaction had to be refunded on the basis of it "being stolen." It's like using cash from a bank robbery to go buy a car, and then go joy riding in the car. The reverse isn't take the car back, get the money back and then give that money to the bank...

 

Yes, just like cash, if the thief has possession then a court will take if off them.

Once goods have been purchased then the cash returns to its normal state (it is no longer a proceed of crime). You can't punish the recipient of the cash just because it was stolen. Provided that the seller of goods has no suspicion/knowledge that the cash was stolen.

 

Hundreds of NVIDIA's Workstation-Aimed Quadro RTX A4000 Cards Ending Up In Crypto Mining Rigs (wccftech.com)
April 4, 2022

 

Hackers stole $1.3 billion worth of Crypto in Q1 2022 | KitGuru
April 5, 2022

 

In comparison, how much $$ was stolen from banks I wonder.