Can bitcoin enthusiasts put down the anti-Paypal pitchforks? PayPal has dominated the bitcoin news headlines over the last week with striking discussions from both PayPal and Ebay senior executives – they are openly discussing bitcoin, and in a positive light. However, no one has addressed why these headlines are important. PayPal most likely sees a business case in solving at least one of the four significant barriers to bitcoin seeing wider adoption: easy to use wallets, escrow for large transactions, quick acceptance by merchants, and reliable exchanges. PayPal can use its brand and infrastructure as a significant competitive advantage for solving the first two almost immediately, and could eventually be a game changer for the later two. “And I think here, for us at PayPapl, it’s just a question of whether Bitcoin will make its way to PayPal’s funding instrument or not, and we’re kind of thinking about it right now.” – David Marcus President, Paypal “It’s the perfect currency by design… I think it’s a fascinating phenomenon and we…
The post PayPal could forever change the way we use bitcoin appeared first on The Genesis Block.
Can bitcoin enthusiasts put down the anti-Paypal pitchforks? PayPal has dominated the bitcoin news headlines over the last week with striking discussions from both PayPal and Ebay senior executives – they are openly discussing bitcoin, and in a positive light. However, no one has addressed why these headlines are important. PayPal most likely sees a business case in solving at least one of the four significant barriers to bitcoin seeing wider adoption: easy to use wallets, escrow for large transactions, quick acceptance by merchants, and reliable exchanges. PayPal can use its brand and infrastructure as a significant competitive advantage for solving the first two almost immediately, and could eventually be a game changer for the later two.
“And I think here, for us at PayPapl, it’s just a question of whether Bitcoin will make its way to PayPal’s funding instrument or not, and we’re kind of thinking about it right now.” – David Marcus President, Paypal
“It’s the perfect currency by design… I think it’s a fascinating phenomenon and we are definitely watching it.” – Hill Ferguson VP Global Product, PayPal
“It’s a new disruptive technology, so, yeah, we’re looking at Bitcoin closely. There may be ways to enable it inside PayPal.” – John Donahue CEO, Ebay
PayPal deserves credit for being forward-thinking enough to consider adopting this disruptive technology instead of trying to immediately crush it. Having worked on the Corporate Strategy team for a $10B+ company I can tell you that these statements are not made by accident. Executives are coached by their teams on what to discuss, and it is highly unlikely that three execs would slip on the same topic. They were certainly briefed on this emerging technology, and most likely have tests in the pipeline to determine the feasibility of implementation. I have no doubt the recent FinCEN guidance has reduced a lot of the legal ambiguity that would have previously been a concern. They now know that there is no additional regulation for facilitating transactions, and that Money Service Business (MSB) registration is required to convert bitcoin to other currencies. PayPal entering the bitcoin market will usher in the next tier of bitcoin adopters.
Online wallets
The next bitcoin mobile wallet?
One of the first things a new bitcoin user has to decide is where to store their newly acquired coins. Blockchain.info has developed a fairly reliable system, but it appears that there are some lingering vulnerability concerns with their security that still need to be addressed. Online bitcoin banks which hold your coins in their own wallets (not personal wallets like blockchain) have been unstable at best, and outright frauds at worst. PayPal is in the position to add an established security system and reliable brand to online wallets. Newcomers to the bitcoin ecosystem would feel comfortable storing funds in PayPal, making it a great avenue for keeping a small amount of money available for day to day transactions.
Escrow for large transactions
Bitcoin is inherently a great method for international purchases; however, the one-way nature of bitcoin transactions requires a minimum amount of trust. This creates a significant barrier to using bitcoin for large transactions like buying a house, or international transfers like buying bulk merchandise from a Chinese distributor. PayPal has an established conflict resolution network and would be in a perfect position to provide an escrow service for these transactions. This would significantly reduce the initial barriers to wider adoption that bitcoin currently faces, and act as an important stepping stone until bitcoin transaction systems become more mature.
Acceptance by merchants
The first question any merchant ask is “how can I accept bitcoin on my website?” Adding a BTC option to PayPal’s established payment network would significantly improve ease of adoption. Theoretically a merchant could add a “pay with PayPay” button, enable the bitcoin option, and accept BTC for payments. The main question here would be whether PayPal would offer the option of converting to USD immediately to reduce exchange volatility. This feature would require them setting up automatic conversion through Mt. Gox – and opening themselves up to Mt. Gox’s vulnerabilities – or acting as directly as an exchanger, which would require leveraging their status as an MSB.
Bitcoin exchange
The most significant question if PayPal joins the bitcoin scene is whether they will go all-in and become a bitcoin exchange. Anyone trying to buy bitcoin with USD recently has no doubt experienced the tribulations associated with getting verified and moving currency into Mt. Gox or one of the smaller exchanges. If PayPal were to leverage their MSB certification, they would revolutionize the dynamic of the BTC/USD exchange market. They would have the resources and technical expertise to operate a proper exchange. They have an established reputation with international banks. They know how to build a proper back end that can handle thousands of trades in a short period of time, and have the resiliency to last through the DDoS’s that have been targeting every banking institution. This last business model is probably the least likely in the short term, but don’t be surprised to see them move into this arena if their other three services see mass adoption.
Will PayPal turn from bitcoin’s pariah to it’s newest innovator? We will find out soon if PayPal is agile enough to beat the stealth bitcoin startups that recently received VC injections.
The post PayPal could forever change the way we use bitcoin appeared first on The Genesis Block.
Today, BitPremier launched its new business and services with the goal of, “redefining the Bitcoin …
The post Bitcoin Magazine Congratulates BitPremier on Their Site Launch appeared first on Bitcoin Magazine.
Today, BitPremier launched its new business and services with the goal of, “redefining the Bitcoin marketplace like never before.” BitPremier provides an opportunity for merchants to sell upscale products and real estate to the Bitcoin community. On day one, BitPremier is featuring a Bahamas Resort Ocean View Condo, Trump Soho Hotel Condominium, paintings such as LeRoy Neiman Basketball Stars, and designer watches as jewelry such as a Ulysse Nardin GMT Perpetual Watch. One of the best features of the site is the continuously updated BTC price along with the USD price.
The overall imaging of the site is conducive to sale of high quality products: a black and white color scheme, leaving the rest of the space up to each merchant to fill in with a vibrant picture of their real estate, art work, or upscale product. The simple design allows merchants to highlight their luxurious products and sites. As BitPremier’s mission is to provide Bitcoin currency holders access to unique, high-end luxury items, each merchant has a generous feature page to highlight their product. The site also has built-in features to safeguard merchants and customers through keeping both parties anonymous until the transaction is near completion. Due to the higher prices associated with merchandise, BitPremier does offer escrow services to secure payment on items until both parties have fully signed off on the purchase. In addition to ad placement on the BitPremier website, merchants can also be featured on BitPremier’s Twitter and Facebook pages.
Bitcoin Magazine had the opportunity to interview Alan Silbert of BitPremier.
Bitcoin Magazine : When did you first hear about and get involved in the Bitcoin currency?
Alan Silbert: Earlier this year Bitcoins were brought to my attention as something that could have enormous potential. I started digging in, and became more and more intrigued with the concept. I now firmly believe that Bitcoins are going to be a game-changer and a big disruptor in finance.
BM: How did you first get involved in the Bitcoin currency?
AS: Outside of schooling myself on Bitcoin 101 day and night, I started as an investor in the currency. I made a point to test drive the different exchanges to understand the complexities of Bitcoin.
BM: When did you first get the idea for BitPremier and what inspired you to create the site?
AS: The idea has been in the works for a couple months. There is really nothing out there quite like BitPremier, so we were glad to jump in and fill the void. We want to open the door to unique items for the Bitcoin community that people don’t have access to today. There are a lot of Bitcoins out there, and people need somewhere to spend them. We think BitPremier.com will fill that need by providing a central go-to marketplace for these higher-end goods and services.
BM: Were there any preexisting businesses that inspired you to create BitPremier?
AS: 1stdibs, James Edition, and the Dupont Registry are good models for luxury marketplaces. Those are great sites for unique purchases.
BM: Where do you see BitPremier’s services going in a year?
AS: We will of course firmly plant ourselves as THE Bitcoin luxury go-to site! I have a few ideas of where we are going. Stay tuned . . .
BM: What makes BitPremier stand out in comparison to other sites utilizing the Bitcoin currency?
AS: BitPremier is a one-of-a-kind site, so there is nothing similar in the market right now to compare us to. It opens up to the Bitcoin community a whole new realm of possibilities of where to spend their Bitcoins, and provides sellers of luxury items with a mostly untapped $1B+ market of buyers to sell to. We screen listings to provide buyers with the best experience possible, and act as escrow agent to facilitate a safe transaction where everyone is happy.
BM: What are your suggestions for individuals hoping to start a business like BitPremier?
AS: Research Bitcoins inside and out, because there is plenty to learn and a lot of tech-speak. But there are tons of possibilities. We are only at the beginning of the curve, so the opportunities out there for entrepreneurs to build out the Bitcoin ecosystem are endless.
BM: If I am a merchant looking to sell through your site, how can I get started?
AS: Sellers can check out the “How it Works” page on BitPremier.com to get acquainted with the site and review our listing criteria. Sellers can then register through our “Seller Signup” page to submit their listings. We reach out to the seller, verify the listing, edit it, and post it on the site. Or if they have questions or multiple listings, they can contact us at [email protected].
BitPremier received support from the NYC-based Bitcoin Opportunity Fund. The BOF has also invested in CoinLab, BitPay, BitSpend, OpenCoin/Ripple, Coinsetter, Tradehill, and Coinapult. We encourage you to check out BitPremier!
The post Bitcoin Magazine Congratulates BitPremier on Their Site Launch appeared first on Bitcoin Magazine.
By Aaron Lasher
Real Virtual Currency
Saturday, April 27, 2013
https://chralash.wordpress.com/2013/04/27/bitcoin-provides-an-opportunity-to-expose-financial-regulation-as-political-favoritism-and-not-consumer-protection/
Bitcoin is, at present, almost entirely unregulated, save for a few
vague guidelines from FinCEN. The only real regulations imposed upon
the exchange markets are those of supply and demand, at least for now.
This is not the case regarding the large conventional markets that we
are more accustomed to dealing with. Muddled among the actual consumer
sentiments are layers upon layers of structures, rules, and hidden costs
that obscure the information that the market is trying to convey.
In many ways, financial regulation for the sake of stability is like
damming a river. You may succeed in stopping the yearly flood that ruins
a couple of houses, but you also ensure that when it does eventually
flood, that the river will probably wipe out the whole village.
For lack of a better term, investors have been coddled into
complacency with regards to their financial decisions. When was the last
time that you checked the solvency of the bank where you leave your
deposits? Do you even care about its financial health? Of course not,
because your deposits are insured. Surely, you would never have to take a
haircut like our friends in Cyprus did. That is, of course, until the flood.
When you deal in Bitcoin, you have to wear your big-boy pants. Nobody
is there to help you if you make a poor decision. You have to do your
own research and sink or swim on those terms. For instance, I keep a
small but non-trivial amount of Bitcoins on the securities trading
platform Havelock Investments. Recently I reached out to the owner,
James, to inquire about his security precautions. He was gracious enough
to describe his protocols (by the way, they are top-notch) and put my
mind at ease. Conversely, I have no idea at all how imprudent that Bank
of America may or may not be with my US dollars.
When the markets go bonkers, and Mt. Gox begins to lag, remember that
people can only manipulate you if you let them. The panic selling that
ensues after a DDoS attack has become less and less pronounced because
Bitcoin owners are wising up. We don’t need an uptick rule, we just need
experience. We’re learning all sorts of things that we never could with
the Dow, the FTSE, or the Nikkei.
Take, for instance, the Bitcoin-only gambling game Satoshi Dice. It
pays a monthly dividend in the form of 13% of net profits. In the world
we are accustomed to living in, SD would be subject to all sorts of
reporting and insider trading regulations. But in the Bitcoin world, the
story is refreshingly simple. There are no rules to follow or break, no
guarantee that insiders won’t trade the stock for certain periods of
time. Personally, I love it. It means that I can trust the current price
a lot more assuming that people in-the-know have affected it already. I
get more information from the price and can therefor make better
decisions about whether I think it is a good time to buy or sell. As a
bonus, the absence of regulatory cost burdens means higher profits and
more money in my pocket.
If you follow the regulatory paper trail, you will often end up at
the doorstep of large banks such as JP Morgan Chase or Goldman Sachs.
This is because they have very effective lobby groups that know how to
get legislation passed. Regulations are sold to the public as necessary
for the protection of consumers and the ferreting out of fraud and money
laundering. But you shouldn’t be surprised to notice that the side
effects of many bills serve to make large financial institutions larger
and to raise the barriers to enter and thus compete.
So how can we show the world that Bitcoin doesn’t need regulating? At
the very least, don’t ask for it. Don’t blame anybody but yourself if
you lose money trading, or your coins are stolen because you were
careless. Become your own financial advocate. Do your research, learn
about the companies you choose to trust with your money, and when the
trading bots start flittering around the Mt. Gox order book, or somebody
sells a big chunk of coins, go for a walk. You’ve got your big-boy
pants on, and big boys don’t panic.
If bitcoin works without regulation, then it will have the potential
to invalidate many claims that “regulation is for your own protection,”
leaving the alternative explanation that regulation in general is little
more than a blunt anti-competitive tool.
Reprinted with permission.
By Aaron Lasher
Real Virtual Currency
Saturday, April 27, 2013
https://chralash.wordpress.com/2013/04/27/bitcoin-provides-an-opportunity-to-expose-financial-regulation-as-political-favoritism-and-not-consumer-protection/
Bitcoin is, at present, almost entirely unregulated, save for a few
vague guidelines from FinCEN. The only real regulations imposed upon
the exchange markets are those of supply and demand, at least for now.
This is not the case regarding the large conventional markets that we
are more accustomed to dealing with. Muddled among the actual consumer
sentiments are layers upon layers of structures, rules, and hidden costs
that obscure the information that the market is trying to convey.
In many ways, financial regulation for the sake of stability is like
damming a river. You may succeed in stopping the yearly flood that ruins
a couple of houses, but you also ensure that when it does eventually
flood, that the river will probably wipe out the whole village.
For lack of a better term, investors have been coddled into
complacency with regards to their financial decisions. When was the last
time that you checked the solvency of the bank where you leave your
deposits? Do you even care about its financial health? Of course not,
because your deposits are insured. Surely, you would never have to take a
haircut like our friends in Cyprus did. That is, of course, until the flood.
When you deal in Bitcoin, you have to wear your big-boy pants. Nobody
is there to help you if you make a poor decision. You have to do your
own research and sink or swim on those terms. For instance, I keep a
small but non-trivial amount of Bitcoins on the securities trading
platform Havelock Investments. Recently I reached out to the owner,
James, to inquire about his security precautions. He was gracious enough
to describe his protocols (by the way, they are top-notch) and put my
mind at ease. Conversely, I have no idea at all how imprudent that Bank
of America may or may not be with my US dollars.
When the markets go bonkers, and Mt. Gox begins to lag, remember that
people can only manipulate you if you let them. The panic selling that
ensues after a DDoS attack has become less and less pronounced because
Bitcoin owners are wising up. We don’t need an uptick rule, we just need
experience. We’re learning all sorts of things that we never could with
the Dow, the FTSE, or the Nikkei.
Take, for instance, the Bitcoin-only gambling game Satoshi Dice. It
pays a monthly dividend in the form of 13% of net profits. In the world
we are accustomed to living in, SD would be subject to all sorts of
reporting and insider trading regulations. But in the Bitcoin world, the
story is refreshingly simple. There are no rules to follow or break, no
guarantee that insiders won’t trade the stock for certain periods of
time. Personally, I love it. It means that I can trust the current price
a lot more assuming that people in-the-know have affected it already. I
get more information from the price and can therefor make better
decisions about whether I think it is a good time to buy or sell. As a
bonus, the absence of regulatory cost burdens means higher profits and
more money in my pocket.
If you follow the regulatory paper trail, you will often end up at
the doorstep of large banks such as JP Morgan Chase or Goldman Sachs.
This is because they have very effective lobby groups that know how to
get legislation passed. Regulations are sold to the public as necessary
for the protection of consumers and the ferreting out of fraud and money
laundering. But you shouldn’t be surprised to notice that the side
effects of many bills serve to make large financial institutions larger
and to raise the barriers to enter and thus compete.
So how can we show the world that Bitcoin doesn’t need regulating? At
the very least, don’t ask for it. Don’t blame anybody but yourself if
you lose money trading, or your coins are stolen because you were
careless. Become your own financial advocate. Do your research, learn
about the companies you choose to trust with your money, and when the
trading bots start flittering around the Mt. Gox order book, or somebody
sells a big chunk of coins, go for a walk. You’ve got your big-boy
pants on, and big boys don’t panic.
If bitcoin works without regulation, then it will have the potential
to invalidate many claims that “regulation is for your own protection,”
leaving the alternative explanation that regulation in general is little
more than a blunt anti-competitive tool.
Reprinted with permission.
