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Paypal Jumps Into Bitcoin With Both Feet
retroworks (652802) writes The BBC, the Wall Street Journal, Bloomberg, Forbes and several other business sites are buzzing with Paypal's incorporation of Bitcoin transactions. According to Wired, Paypal will be "the best thing ever to happen to Bitcoin." Paypal-owned Braintree not only brings 150 million active users in close contact with Bitcoin, it signals "mainstreaming" similar to cell phone app banking, perceived as experimental just a few years ago.
Let me know when they accept Dogecoin.
From having read bot positive and negative articles about bitcoins, it sounds to me that the system just can't work as it is flawed in too many ways.
Is PayPal doing this as a mean to be in should this concept go mainstream or is intending to focus on making it mainstream?
What does Paypal have to do with exposing Satoshi?
As far as the main story goes, I wouldn't call it "jumping in with both feet" when they're not actually even enabling it on Paypal. They're just putting it on Braintree. While that might look like a huge investment, it fits Paypal's hobby budget pretty well.
...and people were afraid MtGox was going to steal your money. Well, at least there is no doubt with PayPal.
This will not end well for Bitcoin
NSA as Mr. Burns rubbing his hands:
Excellent!
Awesome! All the user friendliness of bitcoin combined with the great customer support of Paypal.
It just might work. Hell, people once bought pet rocks.
Who really created Bitcoin and what this move to digital currency means for the future.
I have to admit I find a future of digital currency kind of creepy considering how easy it is for Nation States to monitor everything done online or in any network.
If we had a truly cashless society would there be the possibility of the anonymous purchase as you can with cash?
Yes I understand that was BC's whole thing, but what happens when you legitimize BC?
Does it remain anonymous or do you lose that some where in the chain of events required to use BC.
What if digital currency was the only thing, and it could be shut off in the event the police were after someone effectively taking their ability to purchase and therefore function.
What if everything we ever buy is known and stored by your friends the NSA or some other branch of (and I use the word lightly) government.
"If any question why we died, Tell them because our fathers lied."
In the last year Bitcoin daily trade volume, just on exchanges, has surpassed the trade volume of Paypal. Basically they either have to accept it or slowly lose more and more market share. I understand the media outlets that also preached too big to fail would celebrate this, but its hardly worthy of mention on Slashdot.
The entire security scheme of bitcoin is actually based on the exact opposite:
Not only is it not anonymous, it's public knowledge *BY DESIGN*.
Every single bitcoin transaction (or any other alt-coin for that matter) is publicly broadcast on the network.
Every single full node on the network is always aware of the transaction.
The point is that, thanks to this broadcast, every single bitcoin user can independently verify the transactions and (based on these checks) together all the node can agree who has how many coins left.
Unlike traditional banking (or a web payment like paypal, for exemple), there is no central authority that is the official referrer about account balances (with banks: the bank is the official authority about the content of its users' acounts. With webpayment: paypal is the official authority about the content of paypal accounts, etc. BUT with bitcoin, everyone can control the history of transactions by looking up the blockchain, there is no official central "Bitcoin, inc." that is in charge).
Due to this design (security by public broadcast) that means that no transaction is secret.
At best, it could be called "pseudonymous": the transaction are hidden behind public key hashes. (the civil/legal identity of parties of a transaction aren't directly written into the block chain. Instead the public key hashes are written).
so there's a low risk that an identity is immediately leaked, just by casual look of the blockchain.
It at least takes a conscious effort to track public keys accros the blockchain and follow the money train until an actual identity can be matched.
But that's completely possible and well within the capabilities of governments.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
So will PP keep your BC and dollars separate, or will you be able to swap back and forth between the currencies (either directly or via ACH transfers into/out of you account)?
Is it just my observation, or are there way too many stupid people in the world?
Joking aside:
at least bitcoin has on purpose been designed in such a way to make it impossible for a central authority to freeze an account, because on purpose there are no central authorities.
So that's a relatively small advantage over paypal.
(although, in both case, these system should be used EXCLUSIVELY for payments only. You should only use them to push money around, you should NOT use them to store money. Neither Paypal, nor the bitcoin network are banks. So if you got a big amount of money frozen, it's only your own fault).
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Ripple is a payment network in direct competition with PayPal, which just-so-happens to use a Bitcoin-like internal currency for mediating incompatible transactions. Stellar is a fork of Ripple which has been generating some buzz recently.
I would bet that PayPal's venturing into BitCoin in order to close the gap these systems are trying to exploit: ie. using a purely virtual, unregulated currency to make transaction costs near-zero. Out of all the choices they could make, BitCoin seems the most logical as it's already well established.
If you live near a populated area, I suggest you try trading in-person with cash using Mycelium wallet. It's less convenient than buying online should be, but you are much safer against fraud. The whole time you either have cash in your hand or bitcoins on your phone. Major bitcoin exchanges are just NOT secure enough until they all start using multi-signature transactions and deposit insurance.
Like most assets, don't you (in the US) just pay tax on it when you sell it and realize a profit? Just like stock? That doesn't seem tricky at all.
If I understand things correctly, the tricky part is that you realize a taxable gain when you spend your bitcoins. Not merely when you sell them. Buy a coffee, remember to calculate and report your gain.
A recent IRS advisory said virtual currency is to be treated as an assent not a currency. So lets say you receive some bitcoins. At some future date you spend these bitcoins. Since these bitcoins are an asset you have to account for their gain or loss in value for the days you held them an declare a loss or gain on your taxes. In short spending bitcoins has the paperwork overhead of selling stocks, its not like spending dollars at all.
Ex. You buy one coin at $500 and another at $600. Coins are priced at $800 at the time of a future purchase. You buy something for $1,200, 1.5 coins. Using FIFO (first in first out) your basis for the outgoing 1.5 coins is $500 + $300 = $800, and the basis for the returning 0.5 coins is still $300. You experienced a gain of $400 on the 1.5 coins at the time of the sale and that $400 would seem to be taxable income.
Using LIFO (last in first out) your basis for the 1.5 outgoing is $600 + $250 = $850. You experienced a gain of $350.
Apologies if I botched the math, hopefully the point gets across.
A possible advantage of LIFO is that you are spending "newer" coins first. Letting your "older" coins continue to age. If you hold these "older" coins for a year or more then they may have an advantage of being taxed at a lower rate when spent or sold.
And of course you can use any scheme to determine which coins are being used in a transaction, you are not limited to LIFO/FIFO. They are just convenient examples.
Indeed, if you don't hold the private key, then the bitcoin are not really yours. Paypal can and will prevent some big transaction or some transfer to some company (gambling/sex/drug/weapon/investment/risky business) and some countries blacklisted by the US Gov. But that doesn't affect much Bitcoin. Paypal just add one convenient way to reach thousands of company that will be able to accept it right away.
You said "Yes I understand that was BC's whole thing" and "it could be shut off". Get back to white paper and understand why Bitcoin CAN'T be shut of. The same way you can't shut off torrent, email or TCP/IP. Protocols do not die or get "shut down", once invented they are either used or not.
Man. Talk about a giant shit sandwich...
Chas - The one, the only.
THANK GOD!!!
FIFO or LIFO is to simple when dealing with taxable transactions. The sell priority goes Losses > Long-term gains > Short-term gains.
Its not really that simple either. For example LIFO (last in first out) has the advantage that it helps accumulate long term gains. So applying LIFO within the current short term gains helps a particular coin age and move from the short term to long term. Also one might want to be selective about when long term gains are spent. Again, LIFO is useful in this respect in that it prefers to spend short term.
In short LIFO may be a good default policy, maximizing and preserving the long term gains. A policy that can be overridden on that special day when one wants to cash in the long term gains.
Read the article. PayPal is not accepting Bitcoin. Braintree, which is owned by PayPal, sells a shopping cart checkout system which accepts various forms of payment. They're adding Bitcoin for merchants that want it. PayPal is not itself accepting Bitcoin, nor is eBay.
A number of shopping cart systems already offer Bitcoin as a payment method. Braintree is just catching up.
I see no benefit to me to use, buy bit coins. I use dollars why should I switch unless to do something criminal? I surely couldn't buy enough of them to make any kinda gain that would benefit the rich and criminals which seems the main users of the coin. Because of its hard to trace/imposable?? And the only ones who can mine them are criminals stealing other peoples PC to do the mining. Someone here said its impossible to make a profit mining with one PC as the cost of mining it far greater then the profit. Please correct me if I am wrong.
Jack of all trades,master of none
Well...since Apple just announced Apple Pay, I guess they felt the need to get themselves into the headlines somehow. IMHO, this is probably more about their competition than it is about Bitcoin.
Well...since Apple just announced Apple Pay, I guess they felt the need to get themselves into the headlines somehow. IMHO, this is probably more about their competition than it is about Bitcoin.
What this is about is Bitcoin replacing PayPal, at least as a transaction processor, a transfer mechanism. As it is PayPal is basically doomed.
What PayPal is doing is trying to switch to a new business model. Become a bitcoin exchange converting USD/EUR/etc to and from Bitcoin, and also become an online Bitcoin wallet. However as an exchange or online wallet PayPal will be one of many. They won't be the 800-lb gorilla they once were.
Is there any effort to match the headline with the contents of the linked articles? Here let me help free of charge:
"Payment processor (owned by eBay) is *looking into* accepting bitcoins months from now"
Yea that is just like paypal jumping in with both feet.
Not a bank + Not a currency = Not a chance.
Regarding: 1, 2 and 3 :
I wasn't referring to matching single transaction/single keys and IP adresses, etc.
I was more referring that, if you want to use bitcoin in a meaningful way, you'll have to interract with the real world.
At some point, a real bitcoin user who isn't just playing with bitcoin for the sake of it, will buy an actual good.
Meaning that the seller will need to send the goods to an actual address.
At the other end of the chain, a would-be future bitcoin customer will need actual BTCs to do transaction. Nowaday it's not practical to mine any significant amount of BTCs using hardware available to the average customer. That means that a future bitcoin customer will need to acquire BTC, usually buying them from money (from an exchange or following a face-to-face meeting, etc.)
So no matter through how many public key the BTCs hops, a motivated enough investigator can always track indentities at both end of the chain:
- initial acquisition
- final spending.
sometime it's going to be the same identity (because it's the same person buying the BTCs and spending them after a few public key hops in-between), sometime it's a different identity (because somewhere along the chain, the BTCs 'changed hands' in a way that wasn't registered and matched to any address: for example 2 random people seeding direct donation to each-others address without an real-world interaction. Might happen several time along a chain).
If a really motivated investigator has enough resources (now we're speaking government-level), it is possible to follow tons of such "money trails". By comparing all of them together, it is possible to build whole nets of interactions, and you can match real identities. Even when 1 single money trails is uncertain (money might have switched hands along the track between known end-point), taking into accounts lots of other such money trails help lift uncertainty.
#4) You can use tumblers and coin exchanges to disconnect a given key from you and a transaction.
That's a good valid way to blur the trail.
In the block chains, what you'll see is thousand of user pouring money into the exchange (user funding their accounts) and thousand of users getting money back (user doing withdrawal from the exchange account). Everything in between happens "behind closed doors". The actual buy/sell actions aren't recorded in the blockchain, they happen in the exchange software's database. In the block chain there's just the exchange who's officially held amount of BTCs corresponds to the amount of BTCs currently being exchange by all users. More or less (see MtGox's heist when those numbers don't match anymore).
So trying to make sense of the complex network of interaction is *hard*, *really hard*. Well beyond the efforts used in simply "lifting uncertainty due to invisible switch of owners". Probably only a few poeple in Russia's FSB and US' NSA might have a slim chance of tracking a suspect. (And the tracking is more likely to rely on backdoors and trojans).
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
I made 10,000% interest last year
And depending on the days you pick up, an investor might lose 4x of what money was invested.
You got lucky, others won't necessarily.
(I happen to have been lucky, too, only with a very small initial investment)
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]