Comment by Aurornis
16 days ago
The optimal amount of fraud is non-zero.
This statement is obvious to anyone who has any experience dealing with fraud, but shocking if you haven’t thought much about it.
It’s actually impossible to completely prevent fraud on a platform because there are so many variations of fraud that can’t be prevented up front.
They could demand in-person DNA samples to open an account and there would still be some fraud.
The simple fact is that you can't just open an app and then let it destroy the lives of people with absolutely no connection to it. The company itself must be responsible. Saying "the optimal amount of fraud is non-zero" is only acceptable if the cost of that "non-zero" amount is borne by the company itself; otherwise the result is plainly misaligned incentives.
>The simple fact is that you can't just open an app and then let it destroy the lives of people with absolutely no connection to it.
Wait till you realize how 911 aka "swatting" works.
>The company itself must be responsible.
So in the swatting case should we blame Verizon for allowing the call to be placed in the first place?
In the swatting case we'd blame the SWAT team for not vetting the call properly and for not cooperating with the authorities after they'd killed the kid on the driveway.
You're the second person who doesn't seem to realize that fraud prevention requires proper actions before and after fraud is detected/suspected. Failing to react properly on fraud protects the fraudsters - like CashApp has done - and makes the platform a magnet for fraud.
CashApp failed to investigate and provide vital information to victim while she was being investigated - they did that too late only after they were compelled to do so by the court and lawyers, creating a very hard situation for the victim and allowing the fraudsters to cover their tracks.
The optimal amount is zero, but the realistic amount is non-zero.
Zero fraud is non-optimal because the effort required to achieve it would make transacting impossible.
I suppose I should have spelled it out, given that so many people didn't get it.
It would be like declaring that the optimal number of vehicle deaths is zero, but then not realizing that the only way to achieve that is to make sure nobody can drive. When faced with the realities, everyone backs off and acknowledges that some risk is necessary
I suppose you need it spelled out again, since apparently this is a difficult concept for you to grasp.
The optimal—defined by MW as “most desirable or satisfactory”—amount of fraud is zero. The optimal target—synonymous with amount in this context—of vehicle deaths is also zero. The realistic value for either statistic is non-zero. You even said “when faced with the realities”.
You’re the only one not getting what is basic logic and definitions. Or more accurately, you are getting it, but you’re refusing to accept that your imprecise language was incorrect. You misused optimal when you meant realistic.
The optimal _target_ for fraud is not zero. That's the aphorism. The optimal _amount_ of fraud is indeed zero, for most value systems. You had to spell it out because you were imprecise.
You come across as one borrowing patio11’s coat. He's a great blogger. You aren't.
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