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.

Comments

The summary is all over the place

[rebelwarlock]

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.

IS *NOT* ANONYMOUS

[DrYak]

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.

Re:"it could be shut off"

[lgw]

A government could of course shut off BitCoin, torrent, email, or anything else on servers connected to the internet. The problem with BitCoin (unlike email) is it doesn't realty work on ad-hoc networks. Maybe there's no central authority, but a central network is required, so that transactions from anywhere can be processed by every processor (miner).

BitCoin is quite vulnerable to a powerful government agreement deciding to purge it from the internet. That seems unlikely though, as I think the big players will be content to track it.