BitPay and PayPal
blog.bitpay.com
blog.bitpay.com
Regarding your AngelHack prize... the same thing happened to me. I'd be more skeptical of AngelHack than Bitpay, a well-funded global company, though: http://www.businessinsider.com/greg-gopman-angelhack-lawsuit...
It's not the first time I've heard of AngelHack not following through.
Hah... that library was awesome to work on. Ended up reimplementing the signature algorithm before getting a library that lets us use golang's built in ecdsa libs. Not clever!
Love BitAuth. It's super easy to use and works brilliantly.
We just this past week launched our new REST API, which should be significantly better than our old API: http://blog.bitpay.com/2014/09/18/announcing-the-new-bitpay-... – we spent a long time thinking very carefully about making the developer experience as smooth as possible, but I'm sure there are things we can be doing better. If you've any ideas on how we can improve it, please let me know.
http://blog.bitpay.com/2014/07/01/bitauth-for-decentralized-...
That said, I had no problem with their API. They had an easy web checkout link that could be generated that worked fine in an Android WebView for my first implementation. Later at AngelHack SV I used their PHP API to generate invoices for specific prices for goods dynamically and was then still able to send people to their site to finish checkout and get redirected when it completed.
Didn't really see any missing documentation and their site worked fine, responding quite quickly when money was sent to the barcode it showed or the link that could start a wallet app on Android, and their PHP sample code worked trivially. Who knows, maybe they've improved the docs and samples since you used it, though. Or you were trying to hack bitcore, which is a completely different level of difficulty.
I'm using their old version, but the errors I get are from the new version. Their library for the language I use is not yet updated. The new docs seem to be better, but I lost faith in them as a developer.
Always feel free to shoot me an email at eric@bitpay.com.
This is how it's been for almost a year now.
Ask yourself: Why use Bitcoin? What is the value proposition for consumers apart from sending money to friends? That's valuable, but it's not multi-billions of dollars worth of valuable. Examine the fundamentals before you jump into a gambler's market.
Sending money to people.
Bitcoin is silly in lots of ways, but what something like it could potentially do is revolutionary. PayPal is worth billions; retail banking is a 12-figure yearly revenue industry. That's a whole lot of money on the table.
There is massive value in bitcoin. Payments, asset tracking, international remittances, etc. Take just one of those markets, and just one company—say Western Union and international remittances. That's $8.7B worth of market cap that bitcoin obsoletes.
The day Bitcoin gets FDIC protections is the day it can go mainstream.
With bitcoin, you either have it or you don't. You can run your own bank, as long as you know how to safely store a private key.
It's easier (and safer) for me to hold a million dollars in bitcoin than a million dollars in cash. If I had a million dollars in cash, I'd be constantly worried that someone will find it and steal it. Hence the need for a bank. I feel much more capable hiding a private key, which is just information, than I do hiding 10,000 pieces of paper, which is physical.
With bitcoin, you don't need a bank. I have a 24-word passphrase in my head that can be converted to my private key—a "brainwallet". I know it, and my parents do. It's not written down or stored anywhere. It simply isn't physical.
With those 24 words, you can unlock all of the value I have stored in bitcoin.
It's utterly amazing.
If someone holds a gun to my head, I would give them my passphrase. I’d also go into my bank and wire my money into their account. In both scenarios, my money is gone forever.
Maybe someday, someone will invent a store of value that is safe, even if someone is threatening to kill you.
Most people don't walk around with their life savings on them. That is exactly what you're doing by storing your life savings in your brainwallet. Hence, the need for banks.
Bitcoin mixers also make it an attractive avenue for robbers. No one can demand you wire them money without getting caught. But they can demand you give them your passphrase and then make your money disappear in an untraceable way.
I’d suggest reading up on multisignature transactions and bitcoin, which is an even safer way to store bitcoin than I’ve mentioned: http://bitcoinmagazine.com/11108/multisig-future-bitcoin/
We simply disagree on the value of bitcoin.
Most consumers will take risks like these seriously. If Bitcoin is going to go mainstream, it needs to address these concerns.
No one is going to strap a bomb onto you and then force you to wire them money. Remember, if someone were to do that, they would be caught immediately, because it's very easy to trace money transfers from banks. But Bitcoin makes tracing money impossible, thanks to mixers. That's why banks are safer than Bitcoin: A robber can't extract money from a bank without getting caught, but a robber can empty your brainwallet in a way that hides where the money has gone.
As for holding a loved one hostage, kidnapping for money hasn't worked for a long time. The failure rate for kidnappers demanding money is around 100% in the US. But kidnapping will become much more lucrative if Bitcoin catches on in the way you're imagining. It needs consumer protections.
Once bitcoin has consumer protections, it will be very valuable. That's why I'm advocating the protections. It's a necessary step in Bitcoin's development.
EDIT: To put it another way, instances of kidnapping and theft are rare because the current system defends against them, not because they're inherently rare. If bitcoin catches on without protections afforded by banks, then kidnapping and theft will likely become more common, because those tactics will be lucrative again.
It's become a much more dangerous world, just by the mere existence of Bitcoin.
Two of these already exist: BitGo[0] and GreenAddress[1]. Try doing that with physical money, and you understand why we have banks. With Bitcoin, you can have any level of security you like, and somebody only has to implement it once.
Does FDIC insurance? If the dollar's worth nothing tomorrow, where's the insurance for that?
Everyone in my country has insurance for becoming personally insolvent, it's called welfare. If you have enough bitcoins that losing them would be devastating, you can also get bespoke insurance on them, even if there's not a pre-existing insurance product.
You've also confused deposit insurance with insurance for hypothetical government failure, and drawn a false equivocation with welfare, though my guess is you didn't have any other point so you went with the slippery slope.
That logic doesn't really follow. It takes over all those things even if its market cap is only $1 billion. Bitcoin's market cap not related to the industries it replaces.
If it takes over rare metals, though, as an investment, it might end up worth something close to the market cap of Gold.
For the buyer, security. (akin to a one-time use CC number)
you have chosen a very convenient timespan over which to survey recent events.
i've been holding BTC since 2011. 2014 looks just like 2012 did.
It isn't? Western Union makes $5 billion in revenue every year. PayPal - and a reference to sending money to friends is literally the name of the company - also makes $5 billion in revenue every year.
Yes, that goes without saying. It's also true of paying friends with USD cash.
edited: typo (C instead of B)
As more people leave the official economy every day, the fringes grow larger. The more the US clamps down on foreign banks holding USD, the less attractive the USD will be as a store of wealth.
Russia Sanctions: http://www.cnn.com/2014/07/16/politics/ukraine-russia-sancti...
Also, USD cash is more fungible than electronic USD.
How many people have left the informal economy to transact exclusively in Bitcoins?
Right because the USD is relatively more fungible for the time being.
> regulate Bitcoin into near irrlevance
That will just make dollars less fungible.
The Russian oligarchs go to Bitcoin coferences. It's on their radar.
The only difference with Bitcoin versus a small fiat currency is the people who are using it are distributed geographically worldwide instead of clumped together in one area. As long as they continue to prefer it to other currencies for some proportion of their transactions it will be successful and have value.
No, if it's a bona fide currency, if you can walk around in Burundi and buy bread or a goat or a gun with it, then of course having to convert it to buy a Macbook isn't a dealbreaker. But Bitcoin is in the opposite situation.
> The only difference with Bitcoin versus a small fiat currency is the people who are using it are distributed geographically worldwide instead of clumped together in one area.
So with a currency you can buy life essentials, with Bitcoin you can buy virtual things or things that are feasible to send through the post. I wonder what is going to be more valuable overall?
You can store an encrypted paper wallet in a safety deposit box at the bank if you're worried about that threat. You don't, however, need to hand it over to the bank to lend it out to bad debtors if you don't want to, which is the threat FDIC protects against.
The counterargument to this is to store a portion of your savings in a paper wallet. That's fine, but it's not what's going to make Bitcoin mainstream, which is what the conversation is about. It needs to become consumer-friendly.
- Buying things that people would be unwilling to sell to you with existing payment methods due to fraud risks. One legal example: iPhone purchases shipped to Nigeria.
- Buying things electronically where the existing payment methods are too slow or expensive. For example, funding a stock trading account in seconds to an hour instead of 1-2 days or funding an online gambling account (legal for most non-US residents but slow and expensive with credit cards).
- Buying an expensive item from a trusted merchant at a discount commensurate with the reduced transaction cost and zero chargeback risk.
- Paying for contractors or crowd-sourcing efforts in any country in the world with ease.
Use your imagination.
> - Buying things that people would be unwilling to sell to you with existing payment methods due to fraud risks. One legal example: iPhone purchases shipped to Nigeria.
Small global market share for legal uses.
> - Buying things electronically where the existing payment methods are too slow or expensive. For example, funding a stock trading account in seconds to an hour instead of 1-2 days or funding an online gambling account (legal for most non-US residents but slow and expensive with credit cards).
Most non-US residents can do bank transfers as fast as Bitcoin or will be able to Real Soon Now.
> - Buying an expensive item from a trusted merchant at a discount commensurate with the reduced transaction cost and zero chargeback risk.
So like 5%? Fringe, people who really care about a discount will buy something cheaper or haggle.
> - Paying for contractors or crowd-sourcing efforts in any country in the world with ease.
Fringe for consumer market share.
How do you know? It's currently small because it's currently impossible.
> Most non-US residents can do bank transfers as fast as Bitcoin or will be able to Real Soon Now.
I disagree, most non-US residents in the world don't even have bank accounts. Not to mention, the US and Canada are a huge market with a terrible banking system that refuses to modernize.
> So like 5%?
5% is the entire federal VAT in Canada. Would you really say no to saving $100 when buying a new MacBook? Would you just not bother claiming VAT-exempt status for your business because it's a measly 5%?
A fringe here and a fringe there and pretty soon you have a whole robe.
I think the reason for my belief about iPhones-in-Nigeria being a small market is self-evident. As for other examples: people tend to buy things locally because local businesses are generally good at recognizing local demand, organizing import if necessary, and reaping the benefits of scale (shipping a container of phones). That this arrangement allows for localization of the product which further increases local demand is just icing on the cake.
> I disagree, most non-US residents in the world don't even have bank accounts.
Yes, but they are getting bank or quasibank accounts faster than they are getting Bitcoin wallets.
> Would you really say no to saving $100 when buying a new MacBook?
No - but as a price-sensitive customer I would buy a couple-months-old, gently-used Macbook and save $200 or more. As a price-sensitive business I would buy a Dell.
> A fringe here and a fringe there and pretty soon you have a whole robe.
Sure. But a robe still much smaller than a mainstream provider like Visa.
Yawn. If people as a whole cared about 1% of what you just said there'd be revolutions in every country yesterday.
Money is inherently a social thing. You provide goods or services today to earn a social credit and be able to acquire goods and services after you retire. Your pension is useless without an economy made up of ordinary people who don't care about maths and cryptography but feel they owe you something. They only care about power governments can wield over citizens when things go really wrong. And when things go really wrong you can't buy potatoes with a hard drive.
It is a virtue of Bitcoin that it helps subvert the power of those corrupt governments over the economy in much the same way TOR and proxies help to subvert their power over free speech.
Except people stopped using cowry shells as a currency, just as people stopped using Bitcoins as a currency. Now people hoard/trade them like digital beanie babies. If liquidity and insurance problems ever get solved, then we might see mass adoption.
That level of No-True-Scotsman shows confirmation bias. How much have you put into bitcoins?
Bitcoin advocates rage about fiat, while trading the ultimate fiat currency since it doesn't take too many people deciding they don't want Bitcoin (say: landlords, farmers/wholesalers) before the currency is useless.
Given the number of successful 1-2% cash-back credit cards, it would seem that even regular consumers care about saving tiny fractions on their spending.
It requires a lot more commitment to decide if the transaction is big enough to warrant a no-chargeback discount and if you trust the retailer. Some people would definitely do it if given the chance but it in no way compares to using a cashback Mastercard to buy your lunch.
I love you
Didn't Nigeria, specifically, just issue national ID cards which are implicitly tied to being Mastercard direct debit cards as well?
Secondly, even if they are fringe, that's not a reason against using or being excited about Bitcoin.
Buying steroids, drugs, porn, donating to Wikileaks -- anonymously / bypassing any Visa/Mastercard "embargoes". Fiat makes this quite difficult, Bitcoin solves this problem. Have you ever done an international wire transfer? It can take days. When I pay people with Bitcoin it takes at most minutes. If you actually start using it you'll probably stop asking this question. It is extremely useful at this point in time to many people.
> The way it works is, they buy in order to jump the price. Then other people buy and continue the momentum upwards. Then, in a few days, they sell, and thus capitalize on everyone else's belief.
Funny I also trade equities and what you're describing perfectly fits what happens there.
For values of "rocketing" approaching "down 6% on the week, 13% on the month"
[1] http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10z...
Perhaps you do understand, but it makes you feel good to say something nasty about bitcoin. And that feeling is more important to you than honest discussion.
Nobody is denying the fact that bitcoin is still down from last week - or even last month, but the context in question is the past 4ish hours.
So e.g. "It's worth keeping in mind, though, that bitcoin is down X% in the last month."
From http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property...:
Today’s IRS guidance will provide certainty for Bitcoin investors, along with income-tax liability that wasn’t specified before. Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.
“It’s challenging if you have to think about capital gains before you buy a cup of coffee,” he said.
As the bloomberg article states, if I have to factor in my my capital gains tax liability with each purchase of an ebook or mp3, then that is a royal pain and would lessen my desire to use bitcoin for everyday purchases.
It seems to me that perhaps Paypal just see's the IRS guidelines as a non-factor for consumers who will largely just ignore the guidance similar to how consumers are technically supposed to pay state sales tax on online purchases.
HMRC initially tried to treat Bitcoin in the same way as gift vouchers, not currencies, which meant that different rules applied (particularly in relation to VAT). However they now apparently treat is as a currency which in theory means the above exemptions are open to people to claim.
There are issues with this though. Firstly, in the legislation "bank account" is not explicitly defined so it's unclear exactly which forms of wallet might qualify for that exemption, if any. Secondly, the exemption for physical currency doesn't include personal use of a foreign currency within the UK.
So it's still pretty unclear whether you'll be subject to CGT or not.
Imagine if they had that kind of need on cash or even electronic bank transactions.
No way in hell that theyd even be able to look at all the data they'd receive at tax time.
That's amazing! And me thinking PayPal was all about our money!
Bitpay and Coinbase* offer only two advantages over PayPal - slightly cheaper transactions, and the ability to transact in Bitcoin. Due to the merchant account requirements of each you lose anonymous transactions, so for example Silk Road could never use one of these services. So it strikes me as extremely odd that these guys would be partnering with Paypal, basically giving away their advantage, if there wasn't something bigger in it for them down the road.
* not sure about Gocoin as I haven't looked at its merchant account offering.