Patrick McKenzie: evaluation

Transcript context

…And you’re giving them your signature, right, by signing the back of the card? If someone stole it, they now have your card and your signature. Yes. A lot of what we would call pre-modern thinking about security in terms of payments was not — I won’t say not all that well thought about. There are choices that were made back then that were good in the era they were made, that are disastrously bad right now. For example, if I had, let’s say, a bank account, and I have a secret controlling that bank account, and that secret would allow me to take all of the money out of that bank account, you might think, “How should I protect the secret?” The answer you would come up with in 2023 is not “I want to print it in machine-readable type on every check that I give to everyone.” In fact, that is what we did back in the day. Many, many tens of billions of dollars of check fraud happened over the years because of that issue, and we just took the punches and developed a vast shadow infrastructure to defang this fundamental, irreducible security hole in the heart of the checking system. That handwritten physical signature has very terrible security properties. Anyone who has seen it can reproduce it. They’re very easily reproducible by computers; they’re less easily reproducible by humans. Checking them for correctness or consistency is terrible. The forensic analysts who go to court and try to compare signatures against each other — if I were to say they were practicing witchcraft, I think that would be an uncouth thing to say. I don’t think it is necessarily untrue. So, not a technology we would use in 2023 and going forward to secure anything that we actually care about. Whom do you trust more, your bank teller or the waitress to whom you hand your credit card?…

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