PayPal Bans BitTorrent Friendly VPN Provider | Hacker News Reader

PayPal Bans BitTorrent Friendly VPN Provider

torrentfreak.com

116 pointsllambda35 comments

People have long been worked up over net neutrality.

But what about payment neutrality? It seems like it's just as important, if not more. Why don't we hear enough from people demanding laws that prevent payment processors above a certain size from discriminating based on categories of goods and services?

Why can't we make it illegal for MasterCard and Visa to stop processing payments destined for Wikileaks, or PayPal to stop processing payments to VPN providers? This seems to be to be a clear abuse of monopoly power or at least market share, and there isn't even a whiff of transparent, due process in it.

Surely it would be backwards to dictate who payment processors can and cannot do business with. There are risks involved with banking, a bank will not give a mortgage to a minimum wage worker and we don't expect them to due to the risks associated with such a mortgage, why should a payment processor be expected to take the risks that banks are not?

Uh, so it's okay for the US to wink wink at Amazon, Paypal and numerous other financial payment providers when Wikileaks comes to play?

You sound like a true apologist. This stuff matters, it affects people's lives, and it it has NOTHING to do with ROI. That's a bunch of BS.

This has to do with favors and stancing and has absolutely nothing to do with profitability or providing a service.

I'll show myself the door when I hear about how many chargebacks the VPN was getting.

You're conflating 2 unrelated issues here. It's not okay for the United States government to request (secretly) for a private enterprise to engage in acts that are detrimental to an individual or business because the United States is unable to do anything themselves within the law, however I don't see how the action taken against Wikileaks has any relevance to the action taken against this business. What indication is there that the US requested this?

Paypal's listed justification has nothing to do with the risk of doing business with the VPN; no previous problems were mentioned.

Once a bank does take someone on, there are very strong regulations on what they can and can not do. A bank can't just cut you off and freeeze your money, as PayPal has done here.

Dictating what categories are not legitimate reasons for rejecting someone is not the same as "you have to accept everyone!" Obviously, PayPal should be allowed to reject actual criminal enterprises, for example. But there is nothing illegal about VPNs that protect your anonymity.

Besides, I think it's clear that any legislation that disallowed payment processors from discriminating against businesses would also have to give them legal protection in the case that said business end up being sued.

Doesn't Paypal censor payments for certain types of books now, too?

https://action.eff.org/o/9042/p/dia/action/public/?action_KE...

"UPDATE (3/13/12): After public pressure, PayPal has revised their policy censoring publishers of erotic ebooks."

It's called "Bitcoin", simply because it can serve as an independent non-political payment network.

However, its usefulness is limited by poor infrastructure and limited marketshare. Bitcoin is getting more useful, though. There's Bitcoin ATM, smartcards for bitcoin wallets, mobile app that utilize QR code, etc.

It's also impossible to charge recurring fees, and unlike Paypal etc, transactions take at least 10 minutes on average to clear (and around an hour if you want a decent amount of security).

For TorGuard that is probably acceptable, but in situations where you want to give your customers immediate access to your service, it's far from ideal.

If you're giving someone access to a service that you can revoke (e.g. web hosting, VPN, etc), it doesn't seem like there's any practical risk in optimistically giving someone access once you see the spend hit the bitcoin network. It's not infeasible to do that in a matter of seconds.

If you're shipping something physical you're not going to be working on a timescale less than an hour anyways.

Really the only time that I see Bitcoin's transaction processing speed being an issue is when you're doing a moderate to large transaction where waiting around would be inconvenient.

Someone can chain fake btc transactions to your system granting themselves an infinite supply of access on short-lived accounts if you accept an immediate validation.

No one can ever fake transactions out of thin air. Bitcoin is cryptography. The requirement for confirmation is due to possible double spending, which will cost far more than a VPN account to do it successfully (to cheat a 0-confirmation system).

Yes. A reliable double spend attack would require many millions of dollars worth of machines, and would be noticeable and verifiable (you could provably say "hey I just got a double spend from this account for this amount"). This means that you're unlikely to get the money in that case (depending on what the community wanted to do in response) but you could reasonably expect to know if people are issuing double spends. I don't think it is in the interest of miners (the ones who have already invested, in sum, millions in mining machines) to collude for double spends except on incredibly valuable transactions, as it would undermine the value of Bitcoin, which they are profiting from and have significant investment in.

This is a problem that can easily be dealt with if/when it arises.

Buying a download is another case - can't revoke that.

True, there's something of a tradeoff to make there in terms of waiting vs risk. This is the case with existing payment systems to some extent as well, isn't it? Blizzard for example recently took some heat with regard to fully activating digital downloads of Diablo 3, saying that it typically takes around a day, but may take as long as 72 hours. Speculation was that this was a response to spammers fraudulently buying short-lived accounts (perhaps with stolen credit card numbers, or issuing chargebacks).

1] http://arstechnica.com/gaming/2012/06/diablo-iii-digital-pur...

yes, but PayPal is so huge that ripping off customers here or there is not a big deal to them. Hopefully they will answer a wakeup call when Square and Dwalla will continue to rise the way they are right now.

I learnt to respect someone accepting bitCoint online, especially after dealing with PayPal for last 6 years. If I have to chose, I use bitcoins, and 10 minutes is not a big deal to wait; no worries!

Because there are strict laws in place to prevent money laundering and there are fierce protections to help reduce fraud.

Asking money services to handle payments for anyone is problematic.

Good point. And it's not even necessarily about abuse of monopoly, at least its traditional implications. Calling it justice or freedom seems melodramatic, but I don't have better langage for it.

For example, paypal's advantage is (supposedly) in fraud detection. But they aren't picking up on fraud, they are picking up on fraud risk. An individual or business can register as risky for some apparently arbitrary reason and effectively be banned from a big slice of online commerce. Paypal have no mandate to provide a service to everyone, they might be better off banning 10% of the total population as high risk and passing those savings onto the remaining 90%.

Thats completely reasonable as a business decision. Not really different to simply deciding not to open a shop in Eindhoven. But when it's Paypal it becomes a justice/freedom issue. A person is disadvantaged without access to it.

There appear to be a number of VPN providers accepting bitcoin: https://en.bitcoin.it/wiki/Trade#Connectivity

edit: and the VPN service that the article talks about (https://torguard.net/) already accepts bitcoin.

Not really a new problem. I remember using the pre-ipredator PirateBay VPN provider and they got shoot down by PayPal as well. My current VPN sends me PayPal payment invoices for bogus products apparently just to avoid getting in trouble with PayPal. Running a VPN is not really a business I would want to be in.

Just an invitation to competitors such as Bitcoin, etc.

I thought this quote was funny, "Most of our clients have been very patient since almost everyone has been wronged by PayPal at some time or another,” he added.

Yep, I can sympathize with that....

The funny thing is that PayPal was originally intended to provide safe, transnational money exchange beyond the control of governments. (Somewhat like Bitcoin today.) So they wanted to be a solution to a problem.

Now PayPal is part of the problem.

They've done a great job of being a bank while not being regulated like a bank. It'd be kind of impressive, if it weren't so damn problematic for users/customers.

Yeah, they got big enough fast enough that it wasn't practical to squash them. So they got incorporated into the system instead.

If anybody finally does manage to create a transnational money beyond governments, it's going to need to be highly decentralized.

> If anybody finally does manage to create a transnational money beyond governments, it's going to need to be highly decentralized.

ok, but can you explain why Bitcoin is not starting to fill out this shoe already??

Tons of reasons. Here's a few:

* Hard to use, you need to exchange "real" money to use it - you can't just link up your bank account like on Paypal and start using it right away.

* You either need to totally trust a 3rd party provider with your money (and if they lose/steal it - that's your problem) or run a clunky and slow application on your computer which requires several GBs of HD space (faster, lighter apps are coming)

* Slow, a transaction can take 10-20 minutes to finish (which means that you can't get instant order confirmations/digital product delivery like people are used to when paying with Paypal/Credit Cards).

Hard to use, you need to exchange "real" money to use it - you can't just link up your bank account like on Paypal and start using it right away.

Transfering money is suppose to be instant and easy with bitinstant.

You either need to totally trust a 3rd party provider with your money (and if they lose/steal it - that's your problem) or run a clunky and slow application on your computer which requires several GBs of HD space (faster, lighter apps are coming)

For the main client, this is defintely a problem. There's already bitcoin clients that doesn't relies on downloading several GB of the blockchain.

Slow, a transaction can take 10-20 minutes to finish (which means that you can't get instant order confirmations/digital product delivery like people are used to when paying with Paypal/Credit Cards).

There's a company called ringcoin that provide instant confirmation service for bitcoin.

These are all solvable problem, therefore reason to be long on bitcoin.

We can't force PayPal to do anything. They're not breaking the law and law should not be amended to make this behavior illegal.

Just don't use PayPal. I don't.

surely freezing thousands of dollars of someone else's money should be made illegal

> " and law should not be amended to make this behavior illegal."

Why not?

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