Introducing the Shift Card: Use Bitcoin where Visa is accepted(blog.coinbase.com)
blog.coinbase.com
Introducing the Shift Card: Use Bitcoin where Visa is accepted
https://blog.coinbase.com/2015/11/20/introducing-the-shift-card/
358 comments
I've had the same exact experience. They locked my account for weeks without response to my emails, and when they finally get back to me they told me that I'm "ineligible to use their service" but without ever a reason why.
The entire ordeal was really frustrating and I would strongly recommend against their service also.
The entire ordeal was really frustrating and I would strongly recommend against their service also.
Coinbase CEO here, I can sympathize that this was probably frustrating but I think it stems from a misunderstanding about the service that Coinbase provides. In a purely bitcoin to bitcoin world, this sort of transaction would not be an issue and you wouldn't have a risk of an account being closed. But you're not trying to do a purely bitcoin transaction here - you are trying to exchange bitcoin into your local currency and put the funds in your bank account (this is what we offer with our merchant tools).
To offer this service, we (Coinbase) work with those bank rules and that is why you are seeing our service act much like the traditional financial world. You might not like this, but we didn't make those rules, and it is the only way I know of that works if you want to exchange bitcoin in the traditional financial world. (John's answer from the support thread you linked also explains this).
Accepting purely bitcoin-to-bitcoin payments would be one solution that might work for this if that is what you want (there are plenty of other solutions other than Coinbase for this). I should mention that we are probably at fault for marketing it more as a bitcoin wallet vs an exchange which has different implications to people (I think this is part of the reason for the confusion).
Finally, I believe you may be mistaken that you can't access the $5k in funds. Are you sure? This page describes our policy on that topic: https://support.coinbase.com/customer/portal/articles/190568...
To offer this service, we (Coinbase) work with those bank rules and that is why you are seeing our service act much like the traditional financial world. You might not like this, but we didn't make those rules, and it is the only way I know of that works if you want to exchange bitcoin in the traditional financial world. (John's answer from the support thread you linked also explains this).
Accepting purely bitcoin-to-bitcoin payments would be one solution that might work for this if that is what you want (there are plenty of other solutions other than Coinbase for this). I should mention that we are probably at fault for marketing it more as a bitcoin wallet vs an exchange which has different implications to people (I think this is part of the reason for the confusion).
Finally, I believe you may be mistaken that you can't access the $5k in funds. Are you sure? This page describes our policy on that topic: https://support.coinbase.com/customer/portal/articles/190568...
It's worth pointing out that we never converted our Bitcoin to any other currency (other than Bitcoin), it just sat in our account accumulating. We never actually tried to exchange into our local currency. Nowhere in your documentation or user agreements does Coinbase mention denying companies like ours (adult comic publisher). https://www.coinbase.com/legal/user_agreement (see APPENDIX 1)
I appreciate the response, but honestly I’m still disappointed. You have an opportunity here to create a new breed of payment processor and you are squandering it. I’m sure Coinbase is successful, but is that all you want? Are you okay being just another payment processor that happens to accept Bitcoin?
I am quite familiar with banks having varying levels of comfort with different industries (ours being adult comics), but that didn’t stop us from finding banks that were okay with what we publish and working with them. You should have relationships with multiple banks for situations like this. The fact that your company is locked into a bank that can arbitrarily deny merchant accounts, based on how comfortable they are with each business, is concerning.
More concerning is the fact that the first support email we received tried to pass our account closure off as a FinCEN issue, which only showed how little research was put into our case before the account was closed. How much effort is put into defending your merchants in situations like this?
Instead of closing accounts of small publishers or artists you should be defending them. You’d no doubt have a lot more adamant supporters. If you really do care, and you’re not just commenting to save face, I encourage you to reach out to the Comic Book Legal Defense Fund (http://cbldf.org/). They provide legal support and counsel for censorship issues like this. They have legally defended countless adult publishers, artists, and readers over the years.
As the CEO of Coinbase you have the resources to make a difference and fix situations like this for the future. Don’t be afraid to stand up and defend merchants, publishers, artists, or whoever else decides to use your service. If you want to be another payment processor that’s fine, but you could be so much more.
I am quite familiar with banks having varying levels of comfort with different industries (ours being adult comics), but that didn’t stop us from finding banks that were okay with what we publish and working with them. You should have relationships with multiple banks for situations like this. The fact that your company is locked into a bank that can arbitrarily deny merchant accounts, based on how comfortable they are with each business, is concerning.
More concerning is the fact that the first support email we received tried to pass our account closure off as a FinCEN issue, which only showed how little research was put into our case before the account was closed. How much effort is put into defending your merchants in situations like this?
Instead of closing accounts of small publishers or artists you should be defending them. You’d no doubt have a lot more adamant supporters. If you really do care, and you’re not just commenting to save face, I encourage you to reach out to the Comic Book Legal Defense Fund (http://cbldf.org/). They provide legal support and counsel for censorship issues like this. They have legally defended countless adult publishers, artists, and readers over the years.
As the CEO of Coinbase you have the resources to make a difference and fix situations like this for the future. Don’t be afraid to stand up and defend merchants, publishers, artists, or whoever else decides to use your service. If you want to be another payment processor that’s fine, but you could be so much more.
You still didn't answer the original question though. Why can't he do business with you?
Perhaps you are not legally obliged to give a reason, but it would definitely make you look a lot better then simply saying "uhuh, not here buddy".
I think you can't have it both ways, ignoring support questions and not having to deal with backlash like this.
Perhaps you are not legally obliged to give a reason, but it would definitely make you look a lot better then simply saying "uhuh, not here buddy".
I think you can't have it both ways, ignoring support questions and not having to deal with backlash like this.
I think I did answer the question. He can't do business with us because our bank partners don't want to support certain types of businesses. If you are wondering why the banks don't want to support certain types of businesses, I could only speculate but I'd guess it is reputation risk and they may have seen that category as a front for other illegal activity in the past. But that is their decision to make, not ours.
For example, Stripe also prohibits adult content which is largely (I would guess) a result of input from Wells Fargo https://stripe.com/us/prohibited-businesses
For example, Stripe also prohibits adult content which is largely (I would guess) a result of input from Wells Fargo https://stripe.com/us/prohibited-businesses
That's the first time you've stated clearly why his account was closed.
It's still unclear to me why, if you have multiple banking partners, you don't have even one that would support an adult business. There is a lot of adult video and website business - they must have banks.
Furthermore, it's really the lack of transparency that rubs people the wrong way. When your customers are told that their accounts are frozen or closed all of a sudden and with almost no explanation, they are left flailing to try to understand what the heck is going on. It's like being kicked out of a restaurant half way through dinner and when you ask why, they just say "sorry, we can't continue to serve you..." I consider that method of dealing with your honest customers disrespectful.
It's still unclear to me why, if you have multiple banking partners, you don't have even one that would support an adult business. There is a lot of adult video and website business - they must have banks.
Furthermore, it's really the lack of transparency that rubs people the wrong way. When your customers are told that their accounts are frozen or closed all of a sudden and with almost no explanation, they are left flailing to try to understand what the heck is going on. It's like being kicked out of a restaurant half way through dinner and when you ask why, they just say "sorry, we can't continue to serve you..." I consider that method of dealing with your honest customers disrespectful.
[deleted]
Sounds like Bitcoin may have finally gotten its PayPal.
Can you recommend something better?
Can anyone in this comment section recommend a better service?
I'm an artist who wants to use bitcoins for nearly an identical reason. However, there have been two big limiting factors, which have prevented my supporters and artist peers from using bitcoin.
1) It isn't clear how they get money into and out of the system. - The artists don't want a bunch of 'bitcoins' that they don't know what to do with - The supporters don't own any bitcoins, and don't know where to get them. 2) They are afraid that bitcoin will crash and they will lose all their money.
It's easy enough to dissuade the fears about the second point by 'cashing out' right away. But what are the best options out there to allow the average user to put their money into bitcoin, and to allow not-so-technical users to get money out of bitcoin and into their bank? Coinbase is the only service I've found to 'easily' do this, so far. Even at the cost of my anonymity. :(
I'm an artist who wants to use bitcoins for nearly an identical reason. However, there have been two big limiting factors, which have prevented my supporters and artist peers from using bitcoin.
1) It isn't clear how they get money into and out of the system. - The artists don't want a bunch of 'bitcoins' that they don't know what to do with - The supporters don't own any bitcoins, and don't know where to get them. 2) They are afraid that bitcoin will crash and they will lose all their money.
It's easy enough to dissuade the fears about the second point by 'cashing out' right away. But what are the best options out there to allow the average user to put their money into bitcoin, and to allow not-so-technical users to get money out of bitcoin and into their bank? Coinbase is the only service I've found to 'easily' do this, so far. Even at the cost of my anonymity. :(
There's also Bitpay, they do the same thing coinbase does for merchants in fact most of the exchanges have some kind of merchant API so you can immediately sell coins.
You could also make an agreement with somebody on your localbitcoins.com city listing, but then you run into fees and possibly fluctuations since they won't be a 24/7 service like bitpay or coinbase. Localbitcoins may have an API to automatically make a sell listing I'm not sure, I use IRC still to trade.
You could also make an agreement with somebody on your localbitcoins.com city listing, but then you run into fees and possibly fluctuations since they won't be a 24/7 service like bitpay or coinbase. Localbitcoins may have an API to automatically make a sell listing I'm not sure, I use IRC still to trade.
Amusingly, bitpay told me I wasnt eligible to use their services because I vend electronic cigarettes. Too risky for them... not too risky for my cc merchant though.
I'm working on something that solves this problem. Can you shoot me a note? Email: [email protected]
coinjar. and they've had a Bitcoin debit card for about 6months ^.^
$5000 seems substantial enough to involve law enforcement. Presumably Coinbase performed a transaction involving them receiving BTC, and then instructing you to deliver your product. Why would they not pay you as soon as you deliver, unless they are making a fraud claim on behalf of their customer?
Just a reminder to Bitcoin newbies:
This card looks like an OK product (still open questions about how much coinbase is gaming the ask/bid spread) but just realize that this card does NOT use Bitcoin, it uses "Coinbase Bitcoin"[1] which is Bitcoin for which the coinbase company is managing your private key: You only truly own Bitcoins if you own the private key for the account (users of MtGox learn this the hard way last year)
I do think Coinbase also offers a safer multisig account where you own an independent key and no one, including Coinbase, can withdraw money without your permission (was it called "Coinbase Vault?") If you put the majority of your funds in that independent system (or just keep them off Coinbase entirely) and put money in peace-meal to load up your coinbase Visa card you will greatly reduce your exposure to third-party risks.
[1] Reading the documents, it actually uses "Coinbase USD" which is the same difference.
This card looks like an OK product (still open questions about how much coinbase is gaming the ask/bid spread) but just realize that this card does NOT use Bitcoin, it uses "Coinbase Bitcoin"[1] which is Bitcoin for which the coinbase company is managing your private key: You only truly own Bitcoins if you own the private key for the account (users of MtGox learn this the hard way last year)
I do think Coinbase also offers a safer multisig account where you own an independent key and no one, including Coinbase, can withdraw money without your permission (was it called "Coinbase Vault?") If you put the majority of your funds in that independent system (or just keep them off Coinbase entirely) and put money in peace-meal to load up your coinbase Visa card you will greatly reduce your exposure to third-party risks.
[1] Reading the documents, it actually uses "Coinbase USD" which is the same difference.
Well no you're not really using bitcoin, not even Coinbase bitcoin. At the end of the day the creditcard simply uses a normal credit card transaction, which is denominated in dollars and paid for by Coinbase, in dollars, to the merchant.
All Coinbase does is 1) make sure you enough bitcoin to cover the transaction 2) sell your bitcoin to recoup the dollars they're paying on your behalf to the merchant
None of this has anything to do with the blockchain or bitcoin as a technology. It's purely a practical product to make it a bit easier to make payments when you have a lot of money stored in bitcoin. I doubt it'll be anything significant, various other players like Xapo did this in a similarly reasonably professional manner and none of that blew up, either.
The reason it's not all that interesting is 1) again, it has nothing to do with bitcoin/blockchain 2) you need to store your bitcoin at a centralised company, essentially creating the equivalent of a traditional bank or financial service with the same issues and with no real extra benefits 3) it solves none of the myriad of security and fraud issues that have plagued creditcards we've had for decades (creditcards are basically plastic sheets of text, the text being the password to your money vault, and you have to hand it over all the time to make payments. It's an insane security premise) 4) it's actually pretty expensive, not only are creditcards expensive (both due to fraud and because you're putting profit into the pockets of a middleman), but on top you're essentially doing a forex currency conversion (in this case bitcoin -> usd) everytime you make a payment.
They're advertising 'no fees' at the moment, of course that's not structural. In fact I'm a bit surprised that legal gave the OK to charge customers $10 for a product without communicating usage fees for said product on any specific timeline whatsoever, normally that's guaranteed trouble & customer complaints down the line. That's like your ISP charges you $100 to install your internet connection, then says 'no monthly internet fees for a limited time'. You can bet your ass it'll turn into a gigantic mess a few months later when you suddenly start charging usage fees.
Still, I welcome it. Making bitcoin more pragmatic for mainstream users is something I applaud. I just don't have high expectations for this particular product.
All Coinbase does is 1) make sure you enough bitcoin to cover the transaction 2) sell your bitcoin to recoup the dollars they're paying on your behalf to the merchant
None of this has anything to do with the blockchain or bitcoin as a technology. It's purely a practical product to make it a bit easier to make payments when you have a lot of money stored in bitcoin. I doubt it'll be anything significant, various other players like Xapo did this in a similarly reasonably professional manner and none of that blew up, either.
The reason it's not all that interesting is 1) again, it has nothing to do with bitcoin/blockchain 2) you need to store your bitcoin at a centralised company, essentially creating the equivalent of a traditional bank or financial service with the same issues and with no real extra benefits 3) it solves none of the myriad of security and fraud issues that have plagued creditcards we've had for decades (creditcards are basically plastic sheets of text, the text being the password to your money vault, and you have to hand it over all the time to make payments. It's an insane security premise) 4) it's actually pretty expensive, not only are creditcards expensive (both due to fraud and because you're putting profit into the pockets of a middleman), but on top you're essentially doing a forex currency conversion (in this case bitcoin -> usd) everytime you make a payment.
They're advertising 'no fees' at the moment, of course that's not structural. In fact I'm a bit surprised that legal gave the OK to charge customers $10 for a product without communicating usage fees for said product on any specific timeline whatsoever, normally that's guaranteed trouble & customer complaints down the line. That's like your ISP charges you $100 to install your internet connection, then says 'no monthly internet fees for a limited time'. You can bet your ass it'll turn into a gigantic mess a few months later when you suddenly start charging usage fees.
Still, I welcome it. Making bitcoin more pragmatic for mainstream users is something I applaud. I just don't have high expectations for this particular product.
Doesn't the funding source (BTC) make it at least a bit interesting? For example a card user in the US could have this credit card, and international relatives could fund it with BTC and not have to pay international transfer fees.
It seems like a small step in the direction of using BTC as an actual primary account on the backend and making transactions in the real world.
It seems like a small step in the direction of using BTC as an actual primary account on the backend and making transactions in the real world.
> creditcards are basically plastic sheets of text
Looking again at the site, there's no chip on the card. I thought the USA had finally introduced these — did I misunderstand something?
(All my cards have had chips for over 10 years.)
Looking again at the site, there's no chip on the card. I thought the USA had finally introduced these — did I misunderstand something?
(All my cards have had chips for over 10 years.)
Slowly, one bank at a time.
When I legally changed my name last year, I got all new credit cards. Only two of my new cards have chips.
Earlier this year, one card expired, and the new card has a chip. A couple of months ago, one of my cards was compromised by identity theft, and the replacement they sent me has a chip. Both of those were still chipless after I changed my name, so it must've been a recent change.
Also, I applied for yet another card, and this one has a chip.
When I legally changed my name last year, I got all new credit cards. Only two of my new cards have chips.
Earlier this year, one card expired, and the new card has a chip. A couple of months ago, one of my cards was compromised by identity theft, and the replacement they sent me has a chip. Both of those were still chipless after I changed my name, so it must've been a recent change.
Also, I applied for yet another card, and this one has a chip.
Yes, they are coming. I received my chip card replacements recently. The reason they are finally doing it is because of the so-called EVM fraud liability shift [1], which changes who will be held responsible for card fraud.
[1] http://www.paymentsleader.com/will-retailers-be-ready-for-em...
[1] http://www.paymentsleader.com/will-retailers-be-ready-for-em...
In all possible worlds, bitcoin has to begin with use as a currency-of-currency before it can operate stand alone. Which isn't something you necessarily disagree with, based on your comment. But I think it is interesting because it is a natural and necessary step before the "bitcoin and bitcoin only" applications start to really develop. Bitcoin needs legacy support first before a transition to those really lofty bitcoin ambitions.
I don't see how a debit card could work any other way, since VISA is a pull-based system. If I have Bitcoin on my own computer and I swipe the card, how does the right amount of BTC get sucked out of my computer and exchanged?
Your issuer could talk directly to your private wallet (e.g. on your phone or on server). You could preapprove requests coming from your issuer to be automatically executed so that there is no payment delay. This scenario would be somewhat similar to Direct Debit transaction and would require wallet software supporting automated requests.
Implementing interactive approval would be more difficult to integrate. Authorization systems typically respond pretty fast, so there might be automatic timeout in the payment chain (terminal, acquirer, schema network, issuer) if the transaction was waiting for your interactive confirmation. Maybe some magic with initial pre-auth and subsequent post-auth attempts at regular intervals could work but would be no fun to implement either.
Implementing interactive approval would be more difficult to integrate. Authorization systems typically respond pretty fast, so there might be automatic timeout in the payment chain (terminal, acquirer, schema network, issuer) if the transaction was waiting for your interactive confirmation. Maybe some magic with initial pre-auth and subsequent post-auth attempts at regular intervals could work but would be no fun to implement either.
Right, I just want to warn people away from putting significant Bitcoin holdings directly into Coinbase to use this card without being educated on the risks.
The risk of what? Coinbase stealing everyone users bitcoins and running away? Better not use any bank, credit union, or money transferring service to stay safe.
Banks, credit unions, and money transferring institutions are heavy regulated businesses that have to follow rules. Money you have in bank and credit union accounts are also insured.
Coinbase is a private company that is barely regulated. Any money put into Bitcoins should be money you are willing to lose.
Coinbase is a private company that is barely regulated. Any money put into Bitcoins should be money you are willing to lose.
Edit: meant to reply to your parent.
Sorry dude but I can't down vote this hard enough. Please read about the history of Bitcoin exchanges, and for that matter the history of banks. They arent trustworthy, and become insolvent all the time. The FDIC exists for a reason.
Sorry dude but I can't down vote this hard enough. Please read about the history of Bitcoin exchanges, and for that matter the history of banks. They arent trustworthy, and become insolvent all the time. The FDIC exists for a reason.
My bank deposits are FDIC insured
Worth mentioning, Coinbase has some kind of insurance: https://support.coinbase.com/customer/portal/articles/166237...
That's Coinbase's insurance. That's not coinbase customers' indurance. FDIC is _my_ insurance coverage.
> Coinbase is insured against employee theft and hacking in an amount that exceeds the average value of online bitcoin it holds at any given time.
If someone steals 90% of Coinbase's transiently held coins, no insurance coverage.
> Coinbase is insured against employee theft and hacking in an amount that exceeds the average value of online bitcoin it holds at any given time.
If someone steals 90% of Coinbase's transiently held coins, no insurance coverage.
This is only insurance for their hot wallet (Quite literally, the cash that a bank would keep in their teller registers.) The overwhelming majority of their deposits are not insured.
How many traditional financial institutions have done an exit scam on their users, though? Exit scams happen all the time with Bitcoin exchanges and dark net markets.
The idea is to use it like a charge card and not like a depository for your bitcoins (since any bitcoins you put towards the system isn't yours anymore).
"You only truly own Bitcoins if you own the private key for the account"
Here we get into the distinction between ownership and possession. You own coinbase bitcoin the way you own the stocks in your brokerage account. You don't possess coinbase bitcoin the way you possess the dollar in your pocket.
Here we get into the distinction between ownership and possession. You own coinbase bitcoin the way you own the stocks in your brokerage account. You don't possess coinbase bitcoin the way you possess the dollar in your pocket.
Wait, you give them your private key? Doesn't that defeat the entire security model of Bitcoin? Once Coinbase is hacked all of your money will be gone. It seems crazy to me that you would give them the private key.
> Coinbase is insured against employee theft and hacking in an amount that exceeds the average value of online bitcoin it holds at any given time.
Key word there is "online", but it's better than nothing (see: Mt. Gox).
https://support.coinbase.com/customer/portal/articles/166237...
Key word there is "online", but it's better than nothing (see: Mt. Gox).
https://support.coinbase.com/customer/portal/articles/166237...
They did a writeup a while ago about how they do cold storage. It seems pretty solid to me.
https://www.coinbase.com/security
https://www.coinbase.com/security
Technically, you send the funds to a Bitcoin address you never had (and never will have) the private key to, but yeah, if Coinbase gets hacked, then the hacker gets your funds.
(Creating new Bitcoin addresses is very cheap.)
(Creating new Bitcoin addresses is very cheap.)
> You only truly own Bitcoins if you own the private key for the account
Do I only own my dollars if I have them in cash?
Do I only own my dollars if I have them in cash?
Yes. Otherwise you are just holding onto IOUs for dollars.
The bank has a legal obligation to fulfill those IOUs, which in practical terms is essentially as good as "owning" the dollars.
There is always the risk of a Bernie Sanders kind of scam, but it's rare enough and regulation is heavy enough that for the common person it's not a real concern, or worth worrying about. Coinbase is regulated similarly, though obviously they are young and have to continue to prove themselves over the course of decades.
There is always the risk of a Bernie Sanders kind of scam, but it's rare enough and regulation is heavy enough that for the common person it's not a real concern, or worth worrying about. Coinbase is regulated similarly, though obviously they are young and have to continue to prove themselves over the course of decades.
(Madoff, right?)
[deleted]
coinbase.com/multisig
You can now use Bitcoin anywhere VISA is accepted, so long as coinbase doesn't close your account, ignore you and close all the tickets you open. Even if you painstakingly collect and compile sensitive documents for them to review, which was a gigantic waste of my time, thanks!
I have for months encouraged everyone I know not to use coinbase and will continue to do so.
I have for months encouraged everyone I know not to use coinbase and will continue to do so.
This might be a silly question, but did you use your Coinbase account to conduct any illegal transactions? The team there really cares about customer experience, so generally if they are ignoring you it's because your account has some connection to illegal/banned activity, which they can't disclose due to ridiculous financial laws.
I thought Bitcoin transactions were supposed to be private or something? How would Coinbase know if your transaction was illegal?
Bitcoin is decentralized, but it's definitely not private. Every transaction is recorded publicly in the blockchain. Some folks are very good at backtracking to figure out how funds are flowing through the network. And sometimes it's not even hard, especially if you reuse a wallet's address for receiving funds across multiple transactions.
In particular, there was an article alleging that Coinbase keeps a list of suspicious wallet addresses, and transacting with them will get your account banned. @gwern (who posts to HN sometimes) is reportedly one of the folks whose address is flagged as suspicious: http://truthvoice.com/2015/05/coinbase-accused-of-tracking-b...
In particular, there was an article alleging that Coinbase keeps a list of suspicious wallet addresses, and transacting with them will get your account banned. @gwern (who posts to HN sometimes) is reportedly one of the folks whose address is flagged as suspicious: http://truthvoice.com/2015/05/coinbase-accused-of-tracking-b...
But if the anonymity can be deciphered as such, then why does the Silk Road rely on Bitcoin?
Bitcoin transactions are much harder to censor than conventional fiat transfers, but the transaction graph is completely transparent.
Check out https://www.walletexplorer.com/
Check out https://www.walletexplorer.com/
yuup
Curious, why would you do that? Why wouldn't you transfer coins to a wallet you control and then conduct the transaction from there? Doing it from Coinbase throws away anonymity -- why not just buy your drugs with a Visa card then?
that's the recommended course of action, IIRC.
personally, I prefer to do all my gray market drug purchases on the ol' regular internet with a prepaid debit card.
personally, I prefer to do all my gray market drug purchases on the ol' regular internet with a prepaid debit card.
How do you get the prepaid card?
Cameras are so cheap that practically every shop has them. Voice, face, body recognition are getting better by the week and can be run on all recordings.
Cameras are so cheap that practically every shop has them. Voice, face, body recognition are getting better by the week and can be run on all recordings.
What are some examples of "illegal transactions"? Under what jurisdiction? Arguably, anything is illegal somewhere, and is also legal somewhere else. Also, what do "conduct" and "some connection to" encompass? Are VPN services considered "illegal"? What about anonymous VPS rental? And what about gambling, in jurisdictions where it's legal?
I get the sense that Coinbase is about as capricious as PayPal. And ought to be avoided for the same reasons.
I get the sense that Coinbase is about as capricious as PayPal. And ought to be avoided for the same reasons.
The jurisdiction in which Coinbase operates? This is a pretty lame argument
Where it's headquartered? Or where it's doing business? Microsoft, for example, is making a strong distinction between its operations in the US vs Ireland.
Unfortunately, both. Because that is how financial laws work.
That must get complicated. I see that Coinbase is incorporated in Delaware. Let's say that there's an online retailer of sex toys with a Coinbase account, and that they're incorporated in China. That business is legal in both the US and China, right? But what if they sell to customers in some nation where sex toys are illegal. Does that put their account at risk?
It depends. If Coinbase doesn't have a presence in that country (registered company, licensing, employees) then they most likely don't need to follow their laws, and could make an argument that they are operating purely on a cross border basis. However, if Coinbase started advertising their services in that country, then that country's regulators might start getting upset (just as US regulators get upset with any company that supports online gambling, even if they are not based in the US).
> a bunch of waffling and trying to dodge the question
Gonna go out on a limb here and assume that, yes, you did a bunch of illegal shit.
Gonna go out on a limb here and assume that, yes, you did a bunch of illegal shit.
My point is that Coinbase gets to decide whether or not their customers "did a bunch of illegal shit". At will, with no effective recourse.
Welcome to how financial regulations work. Show up with a bag of cash if you want to get around it.
They have civil asset forfeiture to handle that ;)
Indeed. USPS money orders are pretty good for getting around that. They can be cashed at any USPS facility, can be bought in $1K limits (no more than $3K per day though), and can essentially be treated as bearer bonds if you don't fill them out until time of exchange.
Why is that safer? Cops can seize cars; why can't they seize money orders?
10K in money orders is easier to conceal than $10K in cash.
And $10K in Bitcoin is easier still ;)
How would Coinbase know anything about your transactions? Shouldn't they just process the exchange of necessary payment information?
That's what they should do. Instead, they follow your coins in and out and if they don't like how you use them they freeze your account.
Well if you conduct transactions on their platform, then they know the source/destination, notes, amount etc. AML laws require them to detect and prevent illegal activity on their platform (just the same as Square, Stripe, Venmo/PayPal, your bank etc).
Based on that information it would seem the only illegal transactions there could be (that coinbase could detect) would be transactions over a certain amount (illegal, where?) or transactions with banned destinations (I believe HSBC used to [alledgedly they don't, now?] process transactions for Iran, as well as other banned destinations.).
Is there a comprehensive list of banned destinations?
Is there a comprehensive list of banned destinations?
Yes, there is a comprehensive list of banned destinations and banned people/organizations. Banks develop and audit systems that import this database and scan their data warehouses to make sure no one is on it.
http://www.treasury.gov/resource-center/sanctions/SDN-List/P...
http://www.treasury.gov/resource-center/sanctions/SDN-List/P...
I most often hear about people getting banned for using bitcoin gambling sites within a hop of their coinbase account. For example, withdrawing from Coinbase straight to "1LuckyB5VGzdZLZSBZvw8DR17iiFCpST7L" as an obvious example. Though they are smarter about it than just static "bad address" lookup.
Bitcoin addresses for darknet marketplaces are easily available - e.g. https://www.walletexplorer.com/
Perhaps Coinbase will turn you away if they see you depositing money on a drugs market?
Perhaps Coinbase will turn you away if they see you depositing money on a drugs market?
It is ironic that Bitcoin is thought of as the criminals currency when it's one of the most trackable in the world.
It depends on how it is used. Any darknet that has addresses associated with it could be run a lot better.
Bitcoin allows more to know of those criminal actions.
With untrackable currency (USD, et al.), you get HSBC's and all the others, who may commit crimes in secret and destroy the evidence.
With untrackable currency (USD, et al.), you get HSBC's and all the others, who may commit crimes in secret and destroy the evidence.
They wouldn't unless you did business with a blacklisted wallet (or blacklisted coins). However, as a financial institution, they may be required to ask questions.
They only appear to care about the customer experience when someone complains on social media, until then they have a history of being jerks to their users.
They closed my account after I made a (relatively small) wire transfer after not using their service for a while. The year before I made much larger transfers that didn't seem to concern them. Suddenly I needed to provide them with lots of financial information.
The law sucks and I don't blame them for this. But I have provided them with more than enough information to prove all of my income is legitimate, including years of tax forms regarding the income and other crap they absolutely did not need to look at.
What bugs me is that they continued to ask me for this information, which took time for me to compile for them, and they ignored me anyway after I provided everything.
Another thing that bugs me is that (they claim) their support desk software is the most secure method of sending them sensitive documents. Ridiculous. The icing on the cake will be when their system is hacked and I lose a lot of important documents that I was under the impression they would be removing, but clearly haven't.
They closed my account after I made a (relatively small) wire transfer after not using their service for a while. The year before I made much larger transfers that didn't seem to concern them. Suddenly I needed to provide them with lots of financial information.
The law sucks and I don't blame them for this. But I have provided them with more than enough information to prove all of my income is legitimate, including years of tax forms regarding the income and other crap they absolutely did not need to look at.
What bugs me is that they continued to ask me for this information, which took time for me to compile for them, and they ignored me anyway after I provided everything.
Another thing that bugs me is that (they claim) their support desk software is the most secure method of sending them sensitive documents. Ridiculous. The icing on the cake will be when their system is hacked and I lose a lot of important documents that I was under the impression they would be removing, but clearly haven't.
What's really odd about this (to me at least) is I've never had such an experience from any of my real banks.
Real banks will ask you for Driver Licenses and SSN when you open a bank account with them.
Information on DL has your height, eye color, address, telephone number, your photo, your finger prints. That's why they don't need to ask for your income again.
However, I tried Coinbase and will not use them ever again.
Information on DL has your height, eye color, address, telephone number, your photo, your finger prints. That's why they don't need to ask for your income again.
However, I tried Coinbase and will not use them ever again.
I and many other fellow countrymen have had that experience with Itaú (largest bank in the southern hemisphere). Paypal seems to be a popular source of complaints regarding frozen accounts too.
Same here. I've been through the KYC loops and I know how invasive they have to be occasionally. Coinbase took it to another level.
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But....did you use your Coinbase account to conduct any illegal transactions? You didn't answer a very straight forward question.
No, I didn't conduct any illegal transactions. I thought that would be obvious from my second comment. Somehow you believe I would waste my time complaining about Coinbase yet be at clear and obvious fault?
> I have provided them with more than enough information to prove all of my income is legitimate
That seems like a roundabout way of saying, "No, I did not conduct any illegal transactions".
That seems like a roundabout way of saying, "No, I did not conduct any illegal transactions".
You can buy drugs with legitimate income. The fact he didn't directly say no the first or second time says the answer is probably yes.
That's a dumb, deliberate misreading of my comment and a ridiculous jump to conclusions. I have done nothing illegal.
I said clearly that I made _one_ transaction (a wire transfer) and I said clearly that they questioned me on my income. Their concern is "where did you get your money" to which I answered them thoroughly.
I said clearly that I made _one_ transaction (a wire transfer) and I said clearly that they questioned me on my income. Their concern is "where did you get your money" to which I answered them thoroughly.
I had no idea that KYC now has such onerous proof of income requirements. It's mind boggling.
No. It actually seems like a concise way of explaining how coinbase has been deficient in the commenter's experience.
That the transactions were believed to be legitimate was strongly implied in the same sentence, which just required a little deduction on your part.
That the transactions were believed to be legitimate was strongly implied in the same sentence, which just required a little deduction on your part.
Does it matter? In what world is Coinbase a judge, jury and executioner who can determine if a Bitcoin transaction is 'legal' or 'illegal' with absolute certainty?
The law absolutely requires them to stop doing business with - and report on - people who they have good reason to believe fall into money laundering, terrorist financing and other KYC financial crimes categories. Their safest - and cheapest - way to comply is use rather shallow and heavily automated systems to score their customers and react accordingly.
So we shouldn't judge a company for picking their own safety and cheapness over providing timely competent support to their customers?
I don't get the point of your comment.
I don't get the point of your comment.
What is an illegal transaction?
'Some connection' has seemed to mean more than two hops away, coinbase has decided that a transaction was for 'illegal' activity (I guess they play judge dredd in their own sandbox).
I hope it isn't true, but by now I think I've seen a dozen or so closed account and no communication stories.
I hope it isn't true, but by now I think I've seen a dozen or so closed account and no communication stories.
Don't forget at a random exchange rate chosen by Coinbase.
The exchange rate is almost identical through all exchanges. Have been studying the market for a while, the slippage between exchanges barely last more than 5 minutes.
Apparently you didn't study it last week when Coinbase was $20-$50 different from BTC-E for 5 days.
Doesn't seem to be the case.
Last 7 days: http://data.bitcoinity.org/markets/price/7d/USD?c=e&g=12&r=h...
Live view: http://data.bitcoinity.org/markets/arbitrage/USD
Last 7 days: http://data.bitcoinity.org/markets/price/7d/USD?c=e&g=12&r=h...
Live view: http://data.bitcoinity.org/markets/arbitrage/USD
Are you sure BTC-E wasn't the outlier? That's what I've seen in the past.
I've been watching the spread between exchanges for a long time at https://cointhink.com/arbitrage/btc:usd and BTC-E is nearly always 'away' from the rest of the markets by 5% or more, and always less than the others. I assume there are significant hurdles to getting USD in or out of this Bulgarian exchange.
I'm not sure it makes sense to talk about outliers when there are so few major exchanges.
Coinbase is an exchange, and the exchange rate is "chosen" by the traders who buy and sell on the exchange.
Can confirm, was banned by Coinbase too.
Anyone banned, were you given a reason?
I wasn't banned from coinbase but I had my instant max amount reduced to the lowest amount and had to wait 2-3 day's for a ticket and email correspondence for them to tell me that it was a mistake when migrating users (And as far as I know it had been like this for a week or two)? I wasn't doing anything illegal or account flagged and if my actual bank was making casual errors about my account (i.e. suddenly my ATM withdrawal limit is reduced to $100 per week) I'd be incredibly suspect about their practices/intentions.
What alternative do you point them to ? (just curious)
Not OP, but I think it's time we have some open-source, single-click install for some web-based app for managing a wallet.
If you're using bitcoin, I'm assuming you can click something to install to Heroku.
If you're using bitcoin, I'm assuming you can click something to install to Heroku.
Something like that just screams "eventual compromise and massive tears" though. Especially since most click to deploy solutions go on to pull from a lot of different remote servers, widening the attack surface.
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https://www.coinjar.com/ does the job but only in Australia.
It's weird there is NFC payments on banks and bitcoin credit card here for a while now but everywhere else it seems new.
That's really weird. I moved money in the 6 figures in Coinbase and have uploaded no documents whatsoever. Never had a question from them. (except for sending big amounts, they ask you if it is for an exchange or wallet).
Almost equally bad.
Perhaps we can quash the notion that financial privacy is "bad". Anyone who deals with international finance knows that KYC compliance is a joke and the required submission of sensitive personal documents to third-party companies is a major contributor to identity theft and fraud. Indeed, identity fraud is in many ways a product of policies that force companies to collect this data.
Nor is there any sensible moral argument for why companies should impose burdensome and disproportionate identity checks on customers who value their financial privacy. It is unfortunate to see this sort of comment on a site devoted to entrepreneurship.
Nor is there any sensible moral argument for why companies should impose burdensome and disproportionate identity checks on customers who value their financial privacy. It is unfortunate to see this sort of comment on a site devoted to entrepreneurship.
I don't deal with international finance but I do deal with payments within the US and I have to say I really disagree with you on KYC. Our KYC process absolutely prevents fraud from happening, and because we are liable for any transactions we process I can't imagine operating without it.
Lol absolutely prevents fraud from happening? That is impossible. KYC is more of a cover-your-ass requirement rather than fraud prevention.
With millions of SSN and personal information being available after numerous breaches from health care, etc how exactly are you supposed to vett someone's identity over the Internet?
With millions of SSN and personal information being available after numerous breaches from health care, etc how exactly are you supposed to vett someone's identity over the Internet?
I think you're misreading my use of the word absolutely. I was responding to the idea that KYC compliance is a joke. It is absolutely useful, that does not mean it prevents 100% of fraud absolutely.
> With millions of SSN and personal information being available after numerous breaches from health care, etc how exactly are you supposed to vett someone's identity over the Internet?
I can't really get into our entire KYC and fraud prevention process, but I'll just say there are many more ways to vet someone's identity then simply asking for their SSN.
> With millions of SSN and personal information being available after numerous breaches from health care, etc how exactly are you supposed to vett someone's identity over the Internet?
I can't really get into our entire KYC and fraud prevention process, but I'll just say there are many more ways to vet someone's identity then simply asking for their SSN.
KYC is a joke. If you have information external to KYC for fraud prevention, that's something altogether different from KYC. The KYC requirements themselves are a joke and provide nothing in terms of verifying identity.
I think I probably agree with your general point that the mandated KYC practices are not enough to protect you and your stakeholders in and of themselves. That being said, I think you'd be surprised how much fraud fails to get through basic KYC checks. (I did not downvote you fwiw).
I'm very familiar with KYC, and fraud, etc. There's more than enough fraud that passes KYC to bankrupt your company. It's the additional work that keeps most companies of significant size in business.
> KYC is more of a cover-your-ass requirement rather than fraud prevention.
Keister: Yours Covered.
Keister: Yours Covered.
Sure, but don't for one second pretend its ever for the convenience of the customer or any of that sort of nonsense. It's very clearly for your bottom line and for the government's ability to track financial movement.
Most customers find it convenient that the exchange they use doesn't abruptly get all its (and by extension, its clients') assets seized by government officials for not complying with financial regulations.
Obviously security will always come at a convenience cost, and if by "my bottom line" you mean "not losing money to fraud" then yes, duh.
> absolutely prevents fraud from happening
I'm trying to find a generous reading for this. Perhaps, "sometimes reduces the amount of fraud that impacts customers"?
I'm trying to find a generous reading for this. Perhaps, "sometimes reduces the amount of fraud that impacts customers"?
I think you're misreading my use of the word absolutely. I was responding to the idea that KYC compliance is a joke. It is absolutely useful, that does not mean it prevents 100% of fraud absolutely.
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I don't think it's equally bad because people should be anonymous when banking with bitcoin. I meant that wildly different application of rules is the bad thing.
More importantly, if a business has rules meant for financial security, compliance is important. An organization that institutionalizes non-compliance as a norm is seriously problematic.
More importantly, if a business has rules meant for financial security, compliance is important. An organization that institutionalizes non-compliance as a norm is seriously problematic.
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"the required submission of sensitive personal documents to third-party companies is a major contributor to identity theft and fraud."
Citation needed.
Citation needed.
Yes, I become suspicious at some point. and then it made a bit comfortable doing it, holding and using their services more.
No, it is not weird at all. They have something like 3 million wallets, and ~100 employees. I would assume that different customers can have wildly different experience, just because there can be so many random variables.
Maybe just me, I have difficult trust non-traditional payment vendors/system.
Recently have to dispute a charge with paypal - an online vendors didn't ship the product I ordered with paypal. The paypal dispute process was hell. Lucky I used credit with paypal. One 3 minutes phone call with credit card company, problem was solved. After that kind of experience, it is much harder for me to trust other payment system.
I have use this credit card for 20+ year. This is the first time I dispute the charge for not-false charge.
Previous transaction with the same vendor/paypal went thru just fine.
Like typical software development, most of the code are for error condition and exception handling. Error condition and exception handling are much harder for payment system.
Unfortunately, for payment system, if it is that tough for normal user like me to gain trust with paypal, it will be impossible to convince me to put $ into a coin base account.
Recently have to dispute a charge with paypal - an online vendors didn't ship the product I ordered with paypal. The paypal dispute process was hell. Lucky I used credit with paypal. One 3 minutes phone call with credit card company, problem was solved. After that kind of experience, it is much harder for me to trust other payment system.
I have use this credit card for 20+ year. This is the first time I dispute the charge for not-false charge.
Previous transaction with the same vendor/paypal went thru just fine.
Like typical software development, most of the code are for error condition and exception handling. Error condition and exception handling are much harder for payment system.
Unfortunately, for payment system, if it is that tough for normal user like me to gain trust with paypal, it will be impossible to convince me to put $ into a coin base account.
"The default PIN is the last four digits of your registered mobile phone number. Please call Shift support at 800-897-0717 to reset your Shift Card pin."
That's a terrible idea. This isn't a library card. You're PIN shouldn't be known by anyone who knows your phone number.
That's a terrible idea. This isn't a library card. You're PIN shouldn't be known by anyone who knows your phone number.
That's pretty horrendous. Should be inactive until you activate it, or randomly generated and displayed to you securely in some way.
The card actually is inactive until you activate it once it arrives
but if someone intercepts your mail, then they know your address and could possibly know your phone number. How secure is the activation process?
Why dont you send the card and PIN out separately like a bank?
Why dont you send the card and PIN out separately like a bank?
> but if someone intercepts your mail, then they know your address and could possibly know your phone number. How secure is the activation process
Every "normal" credit and debit card I've received in the mail has used this same procedure -- call a number on a removable sticker stuck to the card to activate it where the only verification is the phone number you're calling from (and caller ID is easily faked).
How is this any worse than how every other card activates?
And how do you propose they get around the mail interception problem? Have a courier deliver it to you and place it in your hand?
Every "normal" credit and debit card I've received in the mail has used this same procedure -- call a number on a removable sticker stuck to the card to activate it where the only verification is the phone number you're calling from (and caller ID is easily faked).
How is this any worse than how every other card activates?
And how do you propose they get around the mail interception problem? Have a courier deliver it to you and place it in your hand?
Holy shit, that’s horrible.
Where I am, PIN and Card arrive in different letters, and the Card letter is only sent once you confirmed via your online banking interface (which uses 2FA) that you received the PIN letter. And you need to confirm online in your banking interface to have received the card to be able to use it.
Where I am, PIN and Card arrive in different letters, and the Card letter is only sent once you confirmed via your online banking interface (which uses 2FA) that you received the PIN letter. And you need to confirm online in your banking interface to have received the card to be able to use it.
For credit cards in the US you virtually never use a PIN. Debit cards only
Well, even then.
Require the customer to verify that he/she received the card in their online banking interface.
Mark it as invalid/stolen/whatever before that.
Require the customer to verify that he/she received the card in their online banking interface.
Mark it as invalid/stolen/whatever before that.
That's changing as of this month. Most banks have already issued new chip cards, which require a PIN. If a merchant is still using the old swipe and sign system, now they'll be liable for any fraudulent transactions if the customer has a chip card.
All of the new chip cards in the US I've read about are signature only. It was decided that the US consumer would dislike the added complication of needing to use PIN.
I'd like a chip card that requires a PIN (and that is accepted widely in the US) because such a card would make unauthorized charges less likely after the card is lost or stolen, but was not able to find one.
I'd like a chip card that requires a PIN (and that is accepted widely in the US) because such a card would make unauthorized charges less likely after the card is lost or stolen, but was not able to find one.
I have a US chip card where I've set a PIN for transaction purposes, so it's not signature only, but it'll still accept both. That said, all of the chip card readers that I've used (few and far between still...) seem to have been configured for signature only, so I haven't been prompted for my PIN yet.
Thanks for clarifying. I agree that my "signature only" was inaccurate.
The system in the US is not chip-and-PIN, it's chip-and-signature.
Which is itself horrendous on a different axis.
How so? It means you need access to the online account, to the 2FA device, and to both letters to abuse the card.
If the attacker already has access to the online banking account, then he/she can do much worse things anyway.
If the attacker already has access to the online banking account, then he/she can do much worse things anyway.
Different axis aka not security. The security is much better. But it's slow and inconvenient.
I opened an account at Metro Bank (in London), in a branch. They verified my id, then printed a debit card — this took about 10 minutes — and let me set its initial PIN in the bank.
I don't know if this is now normal in the UK. The previous time I opened an account in-branch was 2004, when the chip card arrived by post a few days later, with the PIN in a separate letter.
I don't know if this is now normal in the UK. The previous time I opened an account in-branch was 2004, when the chip card arrived by post a few days later, with the PIN in a separate letter.
Similar situation here in Germany – but some banks, as I mentioned, require you to verify online that you received the letters, if you enabled this security feature.
In fact, I’ll go next friday to the bank to get a new debit card, as my existing one stopped working a few months ago.
In fact, I’ll go next friday to the bank to get a new debit card, as my existing one stopped working a few months ago.
Metro Bank are a newcomer to the market who've focused heavily on streamlining their customer enrolment because of that. I don't think other banks offer this.
Half of the cards I remember activating were based on the originating phone number (which I think you could still possibly spoof) which should have been tied to your account when you signed up. If the phone you're calling from isn't the same one on your account, there's likely some additional information you provide or maybe go through a CS rep to finish activation. Unfortunately, like you say, there are also many bank's systems who ignore or simply don't care about the call ID number.
As for interception, I guess you could require a signature for delivery but that's a pita. You just have to weigh the risks in that situation and the convenience of not requiring a signature obviously outweighs the risks of theft.
EDIT: grammar
As for interception, I guess you could require a signature for delivery but that's a pita. You just have to weigh the risks in that situation and the convenience of not requiring a signature obviously outweighs the risks of theft.
EDIT: grammar
> (and caller ID is easily faked)
It's been a long time since I was into telephony stuff, but IIRC caller ID is easily faked but ANI is not. Do verifications use CID or ANI?
It's been a long time since I was into telephony stuff, but IIRC caller ID is easily faked but ANI is not. Do verifications use CID or ANI?
they use ANI, as they're toll free numbers you're dialing (which means they're already capturing ANI for billing purposes[1].)
this is also why caller ID blocking (as provided by your telco) doesn't work when calling toll-free numbers.
1: https://en.wikipedia.org/wiki/Automatic_number_identificatio...
this is also why caller ID blocking (as provided by your telco) doesn't work when calling toll-free numbers.
1: https://en.wikipedia.org/wiki/Automatic_number_identificatio...
I was wondering why they think their system is more secure than the traditional method of issuing cards and PINs through the post.
False: the card is inactive until someone activates it.
that is terrible, especially for a company in the bitcoin space which should be encouraging best practice for security at all times.
The bitcoin industry has a long and chequered history when it comes to best practices.
Part of the appeal of bitcoin to many is "Banks are so unnecessarily expensive to transmit value", the bitcoin industry has slowly and painfully been learning one disaster after another that maybe some of that cost isn't unnecessary after all.
Part of the appeal of bitcoin to many is "Banks are so unnecessarily expensive to transmit value", the bitcoin industry has slowly and painfully been learning one disaster after another that maybe some of that cost isn't unnecessary after all.
"Banks are so unnecessarily expensive to transmit value"
.. which isn't really true in the EU ("Faster Payments"). It's only true in the US because the regulation is fragmented and reflexively in favour of the capitalist over the consumer. It's the banking equivalent of Comcast.
.. which isn't really true in the EU ("Faster Payments"). It's only true in the US because the regulation is fragmented and reflexively in favour of the capitalist over the consumer. It's the banking equivalent of Comcast.
What disasters are you talking about? It is possible to transmit value securely and safely with bitcoin so Im not sure what point you are trying to make other with this sort of vague statement.
The mtgox débâcle springs to mind.
EDIT: My point is that a financial service is more than just the protocols used. Actually the protocols are the least important thing to the average customer. The more important thing is trust. I trust that my money in the bank will stay there and that transactions made using my bank will go to the person I say they should. Part of the reason for my trust is in the regulation around the banking industry. E.g. the savings guarantee here in the UK(/EU?). The bitcoin industry (not the protocol but the services around it) have yet to provide me that level of trust coupled with comparative ease of use.
EDIT: My point is that a financial service is more than just the protocols used. Actually the protocols are the least important thing to the average customer. The more important thing is trust. I trust that my money in the bank will stay there and that transactions made using my bank will go to the person I say they should. Part of the reason for my trust is in the regulation around the banking industry. E.g. the savings guarantee here in the UK(/EU?). The bitcoin industry (not the protocol but the services around it) have yet to provide me that level of trust coupled with comparative ease of use.
Yes there is a savings guarantee in the US/UK/EU however if funds are stolen from your bank account you are as unlikely to get them returned as you are to get stolen bitcoin back. The difference is that the government is covering (with taxes) the loss incurred by the bank (if necessary) but that doesn't mean you are automatically covered by this insurance in the case of a theft.
I've had my credit card and debit card stolen several times. One time, the person who got it took out over a thousand dollars from an ATM in another country. I got it all back (from Chase) within 5 days every time, which would never happen with Bitcoin.
In terms of theft. It depends upon the manner of the theft. If one follows the banks required precautions then one is usually covered (in the UK at least). If one does not then one is not covered -- although I'd agree that banks are increasingly not covering people if they can avoid doing so.
I was more thinking of institutional theft (i.e. embezzlement). I'm almost certain my bank won't just vanish the money I have lent them through my savings account. Of course the same cannot be said of "Random Investment Company Name" who was recommended to me on a forum/down the pub. As yet (and I hope that this changes) non of the bitcoin service companies have risen above this level of trust (for me personally).
EDIT: Added fact that my assessment of trust is my personal subjective opinion and shouldn't be taken as a fact.
I was more thinking of institutional theft (i.e. embezzlement). I'm almost certain my bank won't just vanish the money I have lent them through my savings account. Of course the same cannot be said of "Random Investment Company Name" who was recommended to me on a forum/down the pub. As yet (and I hope that this changes) non of the bitcoin service companies have risen above this level of trust (for me personally).
EDIT: Added fact that my assessment of trust is my personal subjective opinion and shouldn't be taken as a fact.
But that was not a disaster for bitcoin, that was a case of fraud and theft. Not much different to someone embezzling fiat from a firm e.g.secure investmen, and that wasn't a disaster for fiat currencies or the traditional banking system.
I think that many people hold bitcoin and bitcoin businesses to a higher standard than they would companies that operate outside this sphere.
I think that many people hold bitcoin and bitcoin businesses to a higher standard than they would companies that operate outside this sphere.
If someone stole 5% of all the world's fiat currency from an unregulated, uninsured financial institution (Which in that sense was no different from any other BTC exchange... So it's not like anyone had better options.) with customers not getting any recourse, that would be a disaster for fiat currencies.
At least, it would be an unmitigated disaster for the Wild West style of regulating fiat currencies.
People hold BTC businesses to a higher standard because after your BTC is stolen by 'hackers' in an ex-Soviet republic, you have absolutely zero recourse. They hold BTC to a higher standard because no individual in the fiat world siphoned off a trillion dollars into his accounts last year. They hold BTC to a higher standard because the companies operating in the space absolutely refuse to properly protect their customers.
At least, it would be an unmitigated disaster for the Wild West style of regulating fiat currencies.
People hold BTC businesses to a higher standard because after your BTC is stolen by 'hackers' in an ex-Soviet republic, you have absolutely zero recourse. They hold BTC to a higher standard because no individual in the fiat world siphoned off a trillion dollars into his accounts last year. They hold BTC to a higher standard because the companies operating in the space absolutely refuse to properly protect their customers.
Have a look at secure investment, they split with $130 million dollars in fiat.
What about the $1bn stolen from moldovan banks?
There has been no customer recourse there.
Trillion? Really? That is an order of magnitude grater than bitcoins total market cap.
What about the $1bn stolen from moldovan banks?
There has been no customer recourse there.
Trillion? Really? That is an order of magnitude grater than bitcoins total market cap.
The MT.Gox disaster included the theft of ~7% of all BTC.
Depending on how you want to measure the amount of fiat currency in circulation, 7% of that would be close to a trillion dollars.
Depending on how you want to measure the amount of fiat currency in circulation, 7% of that would be close to a trillion dollars.
I would note that siphoning off massive amounts of money does happen in the fiat world despite regulation (but because off ineffective implementation of regulation) e.g. the Madoff case.
> I think that many people hold bitcoin and bitcoin businesses to a higher standard than they would companies that operate outside this sphere.
I hold them to exactly the same standard as traditional financial services. I can see you point in that for many people bitcoin is just voodoo (on the other hand for many people traditional financial services are voodoo and people trust them with their pensions).
I hold them to exactly the same standard as traditional financial services. I can see you point in that for many people bitcoin is just voodoo (on the other hand for many people traditional financial services are voodoo and people trust them with their pensions).
They clearly said "the bitcoin industry" so their comment stands.
That is the default security of my library card. How universal is this?
You have a library card with a settable PIN? Every one I've gotten has been an auto-incrementing ID with no security.
I hope you live in a place where everyone leaves their doors unlocked, children walk to school and play freely in the streets, and the police actually serve and protect the public.
Are you from Iceland?
Are you from Iceland?
Santa Clara county librarybhas a settable PIN.
[deleted]
Well, it does say "default" PIN. Still not good, but you can at least change it, presumably.
I've always found it ironic how companies like Coinbase are indirectly contributing to their own destruction with every passing transaction that's not purely based around Bitcoin. This is of course: assuming that Bitcoin gets as big as a lot of people think it will. If it does: their increased focus on centralization and traditional fintech services (which is completely incompatible with the philosophy behind Bitcoin) is like shorting the entire currency on a long position, and will eventually be unsustainable. But I guess if they're right: all they're doing is profiting from the hype. If we look at what Bitcoin actually is, companies like Coinbase couldn't be further apart from what they're actually selling (philosophy, economics, and technologically) so I consider them nothing more than a bunch of hypocrites.
I wonder what it's like working for a company that's so obviously full of shit? How would you reconcile the obvious contradictions in what you're doing every day? I guess it would be kind of like working at the ministry of truth and then getting paid directly in lies.
I wonder what it's like working for a company that's so obviously full of shit? How would you reconcile the obvious contradictions in what you're doing every day? I guess it would be kind of like working at the ministry of truth and then getting paid directly in lies.
As someone who used to work at Coinbase, hopefully I can shed some light on this.
First of all, Bitcoin should not be seen primarily as a currency, but as a protocol. Therefore, bitcoin does not need to increase in value for it to be successful, and in the long term the price is irrelevant. Bitcoin can be used as a medium of exchange without regard to the price, and many people at Coinbase believe in this future (rather than bitcoin becoming a widely used currency held directly by end users, at least in the near future).
Secondly, many people at Coinbase believe deeply in the decentralized (and potentially anonymous/privacy-focused) aspects of using bitcoin as a currency (myself included). However, bitcoin cannot be successful as a currency unless it is easy to exchange between bitcoin and your local currency, and bitcoin won't gain worldwide acceptance until it is easy to (a) exchange bitcoin and (b) spend bitcoin. Therefore, Coinbase's primary goal is to make buying and selling bitcoin as easy as possible, so that we can enable a future where financial privacy is optional (versus today, where it is basically inescapable).
First of all, Bitcoin should not be seen primarily as a currency, but as a protocol. Therefore, bitcoin does not need to increase in value for it to be successful, and in the long term the price is irrelevant. Bitcoin can be used as a medium of exchange without regard to the price, and many people at Coinbase believe in this future (rather than bitcoin becoming a widely used currency held directly by end users, at least in the near future).
Secondly, many people at Coinbase believe deeply in the decentralized (and potentially anonymous/privacy-focused) aspects of using bitcoin as a currency (myself included). However, bitcoin cannot be successful as a currency unless it is easy to exchange between bitcoin and your local currency, and bitcoin won't gain worldwide acceptance until it is easy to (a) exchange bitcoin and (b) spend bitcoin. Therefore, Coinbase's primary goal is to make buying and selling bitcoin as easy as possible, so that we can enable a future where financial privacy is optional (versus today, where it is basically inescapable).
This is the value proposition as far as I can see. If I'm not a speculator, but am using bitcoin to exchange goods, the only thing it adds are ways to be tracked.
> ... so that we can enable a future where financial privacy is optional (versus today, where it is basically inescapable).
This is a typo, right? Financial privacy today is basically impossible, not inescapable. Tracking is basically inescapable, unless one uses cash. And using cash is becoming virtually illegal.
This is a typo, right? Financial privacy today is basically impossible, not inescapable. Tracking is basically inescapable, unless one uses cash. And using cash is becoming virtually illegal.
"And using cash is becoming virtually illegal."
No it is not. Not even close. Stop with the paranoid hyperbole.
No it is not. Not even close. Stop with the paranoid hyperbole.
As a protocol, it's not great. There's a lot more flexibility in a lot of the new consensus protocols coming out that can run Turing-complete contracts etc. Look at all the hoops that need to be jumped through to do stuff like colored coins, payment channels, etc. in Bitcoin vs protocols with smart contracts.
Anyway, that's irrelevant. If Bitcoin is for some reason the best protocol to be used, why would someone want to enrich the current holders of Bitcoin (of which I am one, by the way). Transferring value to Bitcoin necessitates buying Bitcoins from existing Bitcoin holders, enriching them for no reason. Why wouldn't a bank or other financial institution just start from a clean slate?
Anyway, that's irrelevant. If Bitcoin is for some reason the best protocol to be used, why would someone want to enrich the current holders of Bitcoin (of which I am one, by the way). Transferring value to Bitcoin necessitates buying Bitcoins from existing Bitcoin holders, enriching them for no reason. Why wouldn't a bank or other financial institution just start from a clean slate?
> There's a lot more flexibility in a lot of the new consensus protocols coming out that can run Turing-complete contracts etc
Agreed. But most open source protocols are/were not great. IPv4, SMTP, HTTPv1 all have massive flaws. Once open protocols start gaining momentum though, it's very hard to convince everyone to switch (and bitcoin has by far the most momentum behind it). That said, I'm very interested in Ethereum too.
> necessitates buying Bitcoins from existing Bitcoin holders, enriching them for no reason
If you use bitcoin purely as an intermediary, then you are buying and selling it at the same instant, so it really doesn't affect the price at all. The only thing that makes the price go up is more people hodling it.
Agreed. But most open source protocols are/were not great. IPv4, SMTP, HTTPv1 all have massive flaws. Once open protocols start gaining momentum though, it's very hard to convince everyone to switch (and bitcoin has by far the most momentum behind it). That said, I'm very interested in Ethereum too.
> necessitates buying Bitcoins from existing Bitcoin holders, enriching them for no reason
If you use bitcoin purely as an intermediary, then you are buying and selling it at the same instant, so it really doesn't affect the price at all. The only thing that makes the price go up is more people hodling it.
Can you point me to some of the consensus protocol work? That's always seemed to be the more interesting aspect of BTC to me, but the other requirements of the currency have made that harder than just the smart contracts alone.
Yes, so the one I am most familiar with is Tendermint (disclaimer, I'm friends with some of the people involved). This is a genuinely novel consensus protocol that is inspired by DLS and PBFT (classic Byzantine consensus stuff), and also runs smart contracts using the same languages as Ethereum. Ethereum themselves are trying to do something similar (Casper), but to the best of my knowledge it is not ready yet.
Great, thanks for the info - I'll check into those.
https://www.ethereum.org/ and https://www.stellar.org/ are two interesting ones to check out.
By this logic, Coinbase basically can't win. If they do what they need to do to allow Bitcoin to become popular -- that is, make it as pleasant to use as a bank with credit and debit cards -- they essentially become a bank, thus earning the scorn of the Bitcoin community. But if they don't, Bitcoin remains a niche product that no one besides a few ideological supporters with axes to grind will ever use.
This is a false dichotomy. Bitcoin is a useful protocol for other things besides consumer payments. It is also possible that even if Coinbase's value proposition is 99% as an exchange, there may still be some value to its users in providing a convenient device for extracting $ from their btc balances. Someday I could see Coinbase as a sort of wrapper around multi-currency wallets. Users may have btc, ltc, $, and various other digital assets which they (stupidly or not) wish to leave in one repository.
But if they do that, they will potentially grow the Bitcoin community, and beyond those that scorn any kind of institution.
Bitcoin is a protocol, not a philosophy. Can you explain how accepting Bitcoin through Visa transactions is a bad thing besides spreading FUD? Bitcoin is decentralized and Visa adoption doesn't change that.
I'm not a fan of Coinbase but your argument is unfounded.
I'm not a fan of Coinbase but your argument is unfounded.
So
* you lose the psuedo-anonymity of Bitcoin (the card has your name on it). * It's a "debit" card, so it also has none of the protection of a normal credit card (eg: if someone steals my card or over-charges or whatever, my actual money is not touched). * It's not even real Bitcoin, it requires a Coinbase account (where, from what I understand, they manage your private key, so really own your bitcoins)
What exactly is the target market for this? The people who have no credit cards, the bulk of their cash in bitcoin, and also don't care about privacy?
I'm not into bitcoin, but even so, I am just not seeing the appeal.
* you lose the psuedo-anonymity of Bitcoin (the card has your name on it). * It's a "debit" card, so it also has none of the protection of a normal credit card (eg: if someone steals my card or over-charges or whatever, my actual money is not touched). * It's not even real Bitcoin, it requires a Coinbase account (where, from what I understand, they manage your private key, so really own your bitcoins)
What exactly is the target market for this? The people who have no credit cards, the bulk of their cash in bitcoin, and also don't care about privacy?
I'm not into bitcoin, but even so, I am just not seeing the appeal.
How else do you think this could possibly work?
>you lose the psuedo-anonymity of Bitcoin (the card has your name on it) Nobody would ever allow anonymous card transactions. The security risks with that alone are ridiculous.
> It's a "debit" card, so it also has none of the protection of a normal credit card (eg: if someone steals my card or over-charges or whatever, my actual money is not touched). Nope. Debit cards have protection, as does a coinbase account.
>It's not even real Bitcoin, it requires a Coinbase account My credit card isn't even real money either!
>where, from what I understand, they manage your private key, so really own your bitcoins Thats not how that works.
Its a transition between traditional cards and to new forms of money like crypto-currency.
>you lose the psuedo-anonymity of Bitcoin (the card has your name on it) Nobody would ever allow anonymous card transactions. The security risks with that alone are ridiculous.
> It's a "debit" card, so it also has none of the protection of a normal credit card (eg: if someone steals my card or over-charges or whatever, my actual money is not touched). Nope. Debit cards have protection, as does a coinbase account.
>It's not even real Bitcoin, it requires a Coinbase account My credit card isn't even real money either!
>where, from what I understand, they manage your private key, so really own your bitcoins Thats not how that works.
Its a transition between traditional cards and to new forms of money like crypto-currency.
> Nobody would ever allow anonymous card transactions. The security risks with that alone are ridiculous.
Sure they would. The gift card and reloadable/prepaid debit card market is huge. In theory they try to avoid anonymous usage but in practice they don't.
Sure they would. The gift card and reloadable/prepaid debit card market is huge. In theory they try to avoid anonymous usage but in practice they don't.
"Its a transition between traditional cards and to new forms of money like crypto-currency" by removing all the distinguishing characteristics of crypto-currency, which I think is the OP's point.
It's a step in the right direction. You can't run until you walk.
I'm curious what the exchange rate looks like when purchasing stuff that's not in USD. If the conversion is the same as that of Bitcoin<->USD, then it would make this card super useful for people who travel a lot.
What I mean is, it'd be cool if the card would do:
What I mean is, it'd be cool if the card would do:
- Bitcoin<->CAD
- Bitcoin<->EUR
- Bitcoin<->BHT
- Bitcoin<->HKD
- Bitcoin<->AUD - Bitcoin<->USD<->CAD
- Bitcoin<->USD<->EUR
- Bitcoin<->USD<->BHT
- Bitcoin<->USD<->HKD
- Bitcoin<->USD<->AUDI'm curious if this could also be used to help with remittances. I have several friends who emigrated from countries around the world, and they struggle to find an easy way to remit to their parents. Bitcoin seems so close, but it's difficult for their folks to get it converted to local currency. The fees and hurdles they currently deal with are outrageous, and while it looks like the shift card is US only, it seems like there may be an opportunity here.
Yes, there's a big opportunity. But U.S. customer-facing financial companies - especially startups - have been really bad at doing stuff outside the U.S.
Witness the darling Square getting its lunch eaten by iZettle and Paypal (!) even in the UK, to say nothing of rest of Europe, to say nothing of rest of the world.
Everyone and their dog has been trying to solve remittances with technology at least since Stephenson wrote Cryptonomicon. Ultimately it's much less a tech problem than a human problem.
Witness the darling Square getting its lunch eaten by iZettle and Paypal (!) even in the UK, to say nothing of rest of Europe, to say nothing of rest of the world.
Everyone and their dog has been trying to solve remittances with technology at least since Stephenson wrote Cryptonomicon. Ultimately it's much less a tech problem than a human problem.
Since emigrating this summer, I've transferred about £25k ($40k) using TransferWise and been very pleased with the way the service works. I paid far less in fees than any other service I could find a quote for. I was concerned that being in a small European country with its own currency would mean payments took longer, but this wasn't the case.
They're based in the UK, and properly regulated by both the UK and US.
You get a free transfer using a referral link: https://transferwise.com/u/61f8ad
Or use the non-referral link if you prefer: https://transferwise.com/
They're based in the UK, and properly regulated by both the UK and US.
You get a free transfer using a referral link: https://transferwise.com/u/61f8ad
Or use the non-referral link if you prefer: https://transferwise.com/
Seems to cost ~1% which is better than banks but still $400(!) on $40k. I use Bitcoin to transfer money from USD to THB and get better than spot if I time it right.
This might be the case for people who travel a lot and only hold money in bitcoin and not their native currency, but even then its worse then using USD. There are much better debit cards for travelers which don't charge foreign transaction fees or ATM fees (Schwab Investor Checking for example).
The thing that sucks more is the unexpected and shitty conversion rate you get. I'm not too sure yet what's the best way to go about this, open bank accounts in all those countries and do your currency exchange yourself?
Find a card using the MasterCard or VISA base rate, with no additional fee.
As an example, I was charged CHF20.00 on 5 October, which the card statement says was converted at a rate of 1.4728 to a £13.58 charge on my account¹. XE.com has that day's average rate as 1.4785.
There aren't going to be any other benefits to the card, but that's OK — I have another card for spending in pounds.
The alternative is a pre-paid credit card.
¹ Halifax Clarity.
As an example, I was charged CHF20.00 on 5 October, which the card statement says was converted at a rate of 1.4728 to a £13.58 charge on my account¹. XE.com has that day's average rate as 1.4785.
There aren't going to be any other benefits to the card, but that's OK — I have another card for spending in pounds.
The alternative is a pre-paid credit card.
¹ Halifax Clarity.
- Bitcoin<->Dogecoin<->CAD
- Bitcoin<->Dogecoin<->EUR
- Bitcoin<->Dogecoin<->BHT
- Bitcoin<->Dogecoin<->HKD
- Bitcoin<->Dogecoin<->AUDHah, Is this a joke or is there actually a doge service that does this?
There is. I mined 30 thousand of them, worth about 10 bucks
Nice idea!
Seems like nobody understands how this can work, or why would they do that.
Easy. You swipe your card, Coinbase pays with $, then Coinbase tries to sell enough of the bitcoins you have there to make it even (there might be a fee).
So you need to have a bitcoin balance in Coinbase when you want to use this card.
Now why would you do this? If you're asking yourself this question, there are high chances you are not the target of this product.
There are a lot of people who made a lot of money in bitcoins, and who hold a LOT of bitcoins. This is going to be an easy way for them to spend it on a normal day-to-day basis.
Easy. You swipe your card, Coinbase pays with $, then Coinbase tries to sell enough of the bitcoins you have there to make it even (there might be a fee).
So you need to have a bitcoin balance in Coinbase when you want to use this card.
Now why would you do this? If you're asking yourself this question, there are high chances you are not the target of this product.
There are a lot of people who made a lot of money in bitcoins, and who hold a LOT of bitcoins. This is going to be an easy way for them to spend it on a normal day-to-day basis.
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> There are a lot of people who made a lot of money in bitcoins, and who hold a LOT of bitcoins. This is going to be an easy way for them to spend it on a normal day-to-day basis.
It's a wonderful way to laundry your drug money!
It's a wonderful way to laundry your drug money!
As long as their business was conducted ethically, I have no problem with that means of obtaining bitcoins.
Yes, because loading cash that you can't account for on a debit card tied to your real identity is a great way to 'launder' money /s
According to the Shift Payments FAQ you must reside in one of the following states to spend bitcoin via Coinbase:
AL, AZ, CA, DE, DC, GA, ID, IA, KS, ME, MS, NE, NV, NJ, NC, ND, OK, PA, PR, SD, TX, VT, WA, WV
[1] https://www.shiftpayments.com/faq
[1] https://www.shiftpayments.com/faq
Can't help but notice that NY is not in that list. Oh well.
Maybe it is because of the BitLicense?
See http://cointelegraph.com/news/115114/localbitcoins-stops-ser... for example.
See http://cointelegraph.com/news/115114/localbitcoins-stops-ser... for example.
Yeah - New York regulatory rules are rather strict - our company (based in New York) briefly had and then lost the ability to use bitcoin on our site due to said regulations. (Or rather, the company we were working with withdrew their support for us).
Don't get the point of this. I'm assuming it's going to be a slightly more expensive way of buying things with a card? As supposed to me being charged in $, I'm assuming it exchanges some of my BTC balance for $ which is going to come at some cost.
I assume it uses up BTC to the value of the $ amount at coinbase exchange rates. Whether that is the best exchange rate or not is debatable but it probably the only way for them to be sure they dont take a hit due to volatility.
Of course there could be some saving to the user as otherwise they may need to sell coins (paying fees to do so) then withdraw, again paying a further fee. So this is an immediate way to spend BTC with a merchant that does not accept BTC.
This would be very useful for people who use bitwage to get paid in BTC.
Of course there could be some saving to the user as otherwise they may need to sell coins (paying fees to do so) then withdraw, again paying a further fee. So this is an immediate way to spend BTC with a merchant that does not accept BTC.
This would be very useful for people who use bitwage to get paid in BTC.
I can't really find details on how this works. I assume the merchant still receives USD in the transaction along with the typical Visa card transaction fees. Which in that case, what is the point?
To be able to spend your bitcoin balance without a manual conversion and bank transfer?
Likely a considerably higher exchange rate + fee ... but hey, who cares when the people spending the Bitcoin are only spending it when it's likely only much higher than they acquired it for..
That only works if someone else is buying the bitcoin at the current exchange rate. Coinbase gets its dollars from someone to give to the merchant.
Right, however I'm sure they can float a fair amount, holding onto Bitcoin until it's at a certain value again. So long as the scheme keeps growing..
Well, one benefit I can think of is that keeping cash in a bank, just to keep you debit card funded, is a bad investment (I'll just ignore for now the question as to whether bitcoin is a BETTER investment :)
You don't have to hold dollars to spend dollars, is the only thing I can think of.
Coinbase holds the dollars for you. It's arguable to what extent bitcoin even factors in here after your initial deposit, since everything is under the control of Coinbase. You are effectively holding a note called "Coinbase bitcoin" that fluctuates in value compared to the dollar, and you get a spot exchange rate when you spend. This is not the way bitcoin was meant to be held and spent.
This pretty much has to be done if Bitcoin is to have any significant number of users doing everyday transactions. The hilariously low transaction rate and long transaction times would otherwise prevent people from using Bitcoin to pay for coffee.
>This is not the way bitcoin was meant to be held and spent.
That seems like a meaningless assertion to make about an unregulated currency. If the free market optimizes for regulated intermediaries, that's perfectly valid.
That seems like a meaningless assertion to make about an unregulated currency. If the free market optimizes for regulated intermediaries, that's perfectly valid.
I agree that it is valid for regulated intermediaries to participate. The notion of someone else holding your bitcoins, however, is anathema to the entire PKI behind the protocol. Someone else has your private keys, they own your coins, period. If they happen to give you access, good for you - but don't count on that access always being there, and not going away for good because reasons.
There are other services that offer m-of-n signatures so that you retain control of your keys and a service provider can still facilitate transactions. Coinbase may even offer one of these services, I don't know. But the primary service that they offer is that of a bank - a non-transparent bank that may or may not have any quantity of bitcoin at any given time. Part of bitcoin's original stated intent was to circumvent this power of banks, particularly the power to run at a fractional reserve and pull "bitcoins" out of thin air, which works fine until it doesn't. And that is exactly what Coinbase and AFAIK most of the other providers in the bitcoin sphere are doing, with many famous scams, crashes, and losses along the way.
There are other services that offer m-of-n signatures so that you retain control of your keys and a service provider can still facilitate transactions. Coinbase may even offer one of these services, I don't know. But the primary service that they offer is that of a bank - a non-transparent bank that may or may not have any quantity of bitcoin at any given time. Part of bitcoin's original stated intent was to circumvent this power of banks, particularly the power to run at a fractional reserve and pull "bitcoins" out of thin air, which works fine until it doesn't. And that is exactly what Coinbase and AFAIK most of the other providers in the bitcoin sphere are doing, with many famous scams, crashes, and losses along the way.
Wow, that is terrible. The twisted people who came up with this deserve some respect given how they managed to get this on HN.
"Bitcoin" all the things => Profit
"Bitcoin" all the things => Profit
To be able to use BTC at merchants who don't want to deal with BTC? Like, buying groceries?
I couldn't find any mention on the website -- does it support one time numbers for online transactions? If not, I'd be very reluctant to use it. One breach and your bitcoin account is gone.
Nerver used bitcoin, but cannot you simply create another bitcoin account for petty cash VISA transactions and transfer funds when need be?
You can, but ironically, transfers are not painless in Bitcoin. It can take over 60 minutes for a transaction to be "confirmed", meaning the network has verified that the coins you spent were rightfully yours to spend, and there needs to be a transaction fee attached so that miners are incentivized to check your transaction.
Many bitcoin users prefer to generate a new incoming address for each transaction to improve privacy (Bitcoin is "anonymous" only insofar as your legal name is usually not directly attached to the transaction; in most other ways, it's more traceable than the alternatives).
Many bitcoin users prefer to generate a new incoming address for each transaction to improve privacy (Bitcoin is "anonymous" only insofar as your legal name is usually not directly attached to the transaction; in most other ways, it's more traceable than the alternatives).
If you have two Coinbase accounts, transfers are immediate (since Coinbase still owns the bitcoins, they just move them internally): https://support.coinbase.com/customer/en/portal/articles/139...
You'll have all the rights of a Visa cardholder, such as the ability to file a chargeback.
Are you sure? This is debit, not credit. I believe your rights with debit a fair bit weaker (might depend on issuer though).
The "debit" part of the name means that it draws from an account of liquid funds rather than a line of credit. You can still opt to have your purchase transactions run as if they were credit which does indeed give you VISA credit card protection.
I used an early prototype of this card and the experience is awesome. Super simple, it just works. App is a nice companion when you want to see the transactions you've made. Congrats to the team on the launch!
Someone please change the title to Anywhere IN US :)
The text says "at over 38 million merchants worldwide" which seems to imply that it isn't limited to the US in the sense in which you want to change the title.
The card works both in the US and at merchants that accept Visa abroad!
but is only available to US residents, of whom less than half own a passport, so the worldwide merchant aspect is applicable to the subset of the US population that hold bitcoin and a passport.
> but is only available to US residents
Who live in one of 24 states. New Yorkers need not apply.
Who live in one of 24 states. New Yorkers need not apply.
Even smaller, I commend their ability to offer new services but it should make it clear that this is a very limited offer.
> Anywhere in US
Only in less than half of the US states (they use the number "24" prominently, which is still less than half, but include DC and PR, and CA is limited to 1000 users, so 21 is a more realistic number).
[1] https://support.coinbase.com/customer/en/portal/articles/222...
Only in less than half of the US states (they use the number "24" prominently, which is still less than half, but include DC and PR, and CA is limited to 1000 users, so 21 is a more realistic number).
[1] https://support.coinbase.com/customer/en/portal/articles/222...
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I've taken money out using Shift in China, South Korea, and Japan before they introduced exchange rate fees. It works anywhere VISA is accepted.
If I understand correctly it exchanges some btc to dollars in order to pay the merchant. But this relies on 0-conf transactions, right?
Coinbase is likely clearing the transactions internally. They have control over the coins in the wallet (I just went and checked, they call their multi sig product something else), so they don't need to trust the user.
It relies on you having a BTC wallet with coinbase - where coinbase controls the private key.
Probably Shift verifies that the correct key on the blockchain (ie correct coinbase user) holds the correct amount of bitcoin, then fronts the USD and does the bitcoin transfer on the back end.
Edit: downvotes don't tell me why I'm wrong, would appreciate counterexample, I don't see any docs on the Shift site, and there's no way in hell they're using zeroconf transactions at this scale, which means instant payments must come out of a USD account somewhere
Edit: downvotes don't tell me why I'm wrong, would appreciate counterexample, I don't see any docs on the Shift site, and there's no way in hell they're using zeroconf transactions at this scale, which means instant payments must come out of a USD account somewhere
so how does this relates to bitcoin?
If you wanted to use a visa card, why would even bother with bitcoin?
Or vise-versa
Or vise-versa
Its just a simple way to spend your bitcoins with merchants that do not accept bitcoins
Not only that, but there's a $10 issuance fee associated with this, and based on the announcement, there will be usage charges as well in the future. So it's Visa + fees. As opposed to the Visa I pull out of my wallet now and use without paying any fees.
Well, except for the 2% merchant fee of course (that's passed along to all of us in the price)
You could send your cousin in Somalia $200 in BTC and he could withdraw it in local currency at the ATM down the street from his house. Versus paying Western Union 8% for the same thing.
(Probably not with this card specifically, but if there was a Somalian equivalent...)
(Probably not with this card specifically, but if there was a Somalian equivalent...)
Well, I can't think of a better way to buy groceries with bitcoin.
"The Shift Card is a VISA debit card that currently allows Coinbase users in twenty-four states and territories (see list below) in the U.S. to spend bitcoin anywhere VISA is accepted." - So you have to live in one of the 24 states. And for California they only allow up to 1000 applicants...
I wonder how that works if you move into one of the other states.
Oh wow I will sign up for one! I have been a Coinbase user since they started operating, and am currently in the middle of a year-long trip around the world so I have been looking for ways to minimize my international ATM withdrawal fees. My US bank (Wells Fargo) charge me a flat $5.00 fee per transaction, and my french bank (Crédit Agricole) charge me about $8.50 for the equivalent of a ~$220 withdrawal. I see that Shift has a flat fee of $3.50, so yay for beating old legacy banks! Though I am kind of sad to see that the Shift debit card has no chip. Cards with only a magnetic track are becoming increasingly difficult to use in countries other than the US.
Also, it's worth noting that both Shift and Coinbase are YC companies.
Also, it's worth noting that both Shift and Coinbase are YC companies.
This might be too late since you have already left, but check out Schwab bank - they offer free international ATM withdrawals, and will also refund any fees added by the ATM operator. I think it's mostly a loss leader for their brokerage business, but awesome for travelers.
FWIW, there are credit cards with no foreign transaction fees.
Is it me, or does a requirement to provide your physical address ("Connect your Coinbase account, Order the card by providing your physical address and authorizing the $10 issuance fee") kind of miss some of the point about BitCoin?
Maybe I'm being naive, but I felt like bitcoin was going to free us from credit card companies.
Wouldn't it be nice if almost-monopolies weren't able to raise prices on everything slightly in order to fund their rigged rewards programs?
Wouldn't it be nice if almost-monopolies weren't able to raise prices on everything slightly in order to fund their rigged rewards programs?
That's the end game. I think this can be seen as the bitcoin industry following "Embrace, extend, and extinguish".
The only times I tried to use Coinbase to buy Bitcoins, they stopped processing orders apparently because the Bitcoin value was fluctuating too much, so I never got my Bitcoins... and I never used them since then.
Not super related to Shift Card, but I always thought big banks are terrible at customer service and how they treat their customers. Looking at complaints about CoinBase and how ShiftCard is setting pin based on phone number, you get a sense that this is all a bunch of amateurs and/or kids running the show.
Or maybe handling transactions is really hard?
Not sure what to think honestly.
Or maybe handling transactions is really hard?
Not sure what to think honestly.
Any idea why only 24 states? Is coinbase following FINCEN regulations by filing as a money transmitter in each eligible state?
Yes, probably related to money transmission licensing (and various other state finance laws). See https://www.coinbase.com/legal/licenses. There may also be some restrictions at the Shift end.
That's an interesting competitive advantage that coinbase has. Last I read on these laws, each license can cost ~$25k to procure. Many companies choose to "shoot first, ask questions later" and rollout their programs without acquiring a license in every state. For example Facebook only recently acquired money transmitter licenses (and may not even have one in every state), even though facebook credits / pay via facebook has been a feature for a long time.
The cost of acquiring these licenses is competitively prohibitive to startups, and honestly, there's no reason why it should be state by state. Money transmitter licensing should definitely move to the federal level.
The cost of acquiring these licenses is competitively prohibitive to startups, and honestly, there's no reason why it should be state by state. Money transmitter licensing should definitely move to the federal level.
I've never used Bitcoin, although was mentioned by its original inventor on a research list once ;).
I have met the founders at Coinbase, and their vibe was more like that of an SF startup that will do anything to "win" and "exit big" than a world change agent. Bitcoin needs the latter, not the former.
I have met the founders at Coinbase, and their vibe was more like that of an SF startup that will do anything to "win" and "exit big" than a world change agent. Bitcoin needs the latter, not the former.
Where was that thread about making financial bets based on how many negative comments were in a HN thread?
Devil's advocate: Ive had little to no problem with Coinbase for a good 80%+ of my bitcoin usage.
The only issue I had is my buy limit decreased suddenly because they added more security I had to verify for my identity and didn't notify me. Once I verified my ID it was instantly reinstated.
The only issue I had is my buy limit decreased suddenly because they added more security I had to verify for my identity and didn't notify me. Once I verified my ID it was instantly reinstated.
Whenever I buy or sell bitcoins on Coinbase, I pay a lot both directly (via coinbase commission) and indirectly (via their super wide spreads).
If I get this card, am I going to still get screwed, or will it suddenly be cheaper to transact?
If I get this card, am I going to still get screwed, or will it suddenly be cheaper to transact?
Pardon my lack of knowledge but wasn't the whole point of bitcoins being anonymous? How are you anonymous with a card connected to an account?
I'm not trolling I really don't see what I'm missing.
I'm not trolling I really don't see what I'm missing.
Decentralisation was (and still is) the point of Bitcoin; any additional perks (e.g. anonymity) are emergent. Here's a quote from the original paper:
>Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
>Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
The irony being of course is that Coinbase is literally a financial instution
but given confirmation time inherent to the network, I don't see a way around doing something similar to what coinbase have done here (minus the egregious part where they hold your private key)
but given confirmation time inherent to the network, I don't see a way around doing something similar to what coinbase have done here (minus the egregious part where they hold your private key)
>Pardon my lack of knowledge but wasn't the whole point of bitcoins being anonymous?
It is about decentralization and trying to establish trust outside of the normal banks.
An interesting possible example is in the Genesis block. Satoshi added the newspaper headline:
It is about decentralization and trying to establish trust outside of the normal banks.
An interesting possible example is in the Genesis block. Satoshi added the newspaper headline:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
So instead of a currency being centralized between governments and banks, it's centralized around a few dozen miners and developers.
The "whole point of bitcoins" is not anonymity. In fact, bitcoins aren't anonymous at all.
Kinda, it's many things to many people, I think like VOIP it will serve as the infrastructure for banks but for individual consumers it will likely never take flight, just as we still use a lot of cell phone numbers that use VOIP infrastructure.
You don't have bitcoin if you just have a balance in Coinbase, so this debit card really has no connection to Bitcoin at all. No transactions will reach the blockchain when you use this card.
That's silly, that's like saying you don't have USD if all you have is a USD-denominated deposit checking account at a bank.
That's absolutely true, though. You are trusting the bank (and the federal insurance backing it) that when you want to draw your balance that you can. It's no different when you have bitcoin in Coinbase.
I just can't see a scenario where buying bitcoin with USD on Coinbase and then using a debit card to spend it in USD is better than spending USD in the first place. Unless you buy into the pyramid-scheme "it'll be $10000 any day now" nonsense, in which case you have no incentive to spend bitcoin anyways.
I just can't see a scenario where buying bitcoin with USD on Coinbase and then using a debit card to spend it in USD is better than spending USD in the first place. Unless you buy into the pyramid-scheme "it'll be $10000 any day now" nonsense, in which case you have no incentive to spend bitcoin anyways.
99.9% of people would disagree with you that the balance they see in their Wells Fargo account is 'not actually USD'. In a way Coinbase BTC is closer to BTC than Wells Fargo USD is to USD because Coinbase doesn't operate a fractional reserve.
> I just can't see a scenario where buying bitcoin with USD on Coinbase and then using a debit card to spend it in USD is better than spending USD in the first place.
Sure, that would be silly. But imagine you're a rich Chinese kid in California whose parents own a sweatshop in Shenzhen. To easily get around capital controls they buy BTC in China and send it to your Coinbase account. You pay for your day-to-day USD expenses on this card. Use your imagination.
> I just can't see a scenario where buying bitcoin with USD on Coinbase and then using a debit card to spend it in USD is better than spending USD in the first place.
Sure, that would be silly. But imagine you're a rich Chinese kid in California whose parents own a sweatshop in Shenzhen. To easily get around capital controls they buy BTC in China and send it to your Coinbase account. You pay for your day-to-day USD expenses on this card. Use your imagination.
Has anyone answered the basic question of why anyone would actually use Bitcoin as a medium of exchange when the value of Bitcoin, despite fluctuations, is designed to increase over time?
No KYC/AML.
https://xapo.com/ offers prepaid card which works everywhere too and is not such corporate asshole like Coinbase.
Am I the only one who misread this as 'Introducing the Shit card'? For a full two minutes, I thought this was a parody site mocking bitcoin.
I just ordered one.
Will report about usage, quirks and tricks.
Will report about usage, quirks and tricks.
I love it, use your bitcoin without all the hassle of making a transaction on the blockchain.
What is we could buy things without having to deal with banks? I have an idea...
Though this isn't PERFECT, it's better than nothing. Just my opinion.
after seeing this thread I login to my coinable account since I have check it in few months. Shocked to find my BTC balance to 0 although I had a few. emailed support this morning and so far no response.
I guess someone will get some impressive mileage numbers.
You still need a bank account. Beats the purpose imo.
Anywhere visa is excepted, by which we mean ~half the U.S. because Americans have that much awareness of the rest of the world.
Will this support Apple Pay?
I can get the same "privacy" and not be subject to arbitrary Bitcoin/Dollar price fluctuations by simply buying Visa debit "gift cards" for cash.
As someone who first bought bitcoin at 8 USD, I'm quite enamored of the price fluctuations. Considering that it will be heading into the four and five digits relatively soon, I'm not sure this is a negative.
" in twenty-four States "
Taylor Shift chuckles
if anyone wants to sign up for coinbase here's a referral link to start off with free $10 https://www.coinbase.com/join/songz :)
For a company like ours the whole appeal of Bitcoin is the anonymity, so our readers don't have to worry about buying lewd comics and having it show up on their statements. Coinbase tarnishes what Bitcoin stands for and they do not protect artists/publishers.
Edit: For transparency here is my back and forth with their support (http://imgur.com/CHeAEPP) and the link to one of our books on Amazon I shared (http://www.amazon.com/dp/1634420241/ [NSFW]). Ironically I've been waiting on a reply from them for 22 days and counting. They have about $5,000 in our disabled account along with all our customer/order information that we can't access.
Do not use Coinbase.