Bitcoin Forum

This is an interesting development if true, I'm trying to reach Bitpay now to confirm. :'(

http://puu.sh/kmSrn/6ff27ed316.png

https://www.reddit.com/r/Bitcoin/comments/3m7rj1/did_bitpay_lay_off_most_remaining_employees_today/

Interesting story. Let's all first wait for evidence before we jump to conclusion. I have no idea why they would lay off people today because the day has no particular meaning. I hope that this turns out to be false news, else we would need another company to take their place as soon as possible.

This is nothing more but speculation at this point but it's important to remember that it'c coming from the guy that 'announced' that bitpay will be halting their free service a month before it was official.

hopefully that is just a rumor. it is a great company (with a great wallet by the way: Copay!)

I tried calling their offices multiple times, but no one is answering the phone?

http://puu.sh/kmUBh/b19faeb532.png

And this was just posted on Reddit a little while ago ...

http://puu.sh/kmUDR/607682eeba.png

https://www.reddit.com/r/Bitcoin/comments/3m7rj1/did_bitpay_lay_off_most_remaining_employees_today/cvd0fsr

I'll update this thread if I learn more. 8)

--

EDIT: Yet another 'source': http://qntra.net/2015/09/eyewitness-people-walking-out-of-bitpay-office-in-tears/

He is not a 'stupid' at all. He has done it intentionaly. Their plan was to cry foul for hack and get the money back through insurance coverage. Now, as the insurance company is denying, they're in trouble.

Well pretty sure those were proposed to make someone cover the loss ,by the way has the fight over ?The dispute to recover the money lost,before when bitcoin started i would believe that were easy to scam but now with soo many securities systems why a ceo make a milionaire transaction and the boss isnt around ,makes no sense hey deposit 2000 bitcoins at xxx account i confirm .

Let's say your company had ten obsoleted typewriters. You put them up for sale and someway, somehow, some dude swooped and conned you out of a hundred bucks that you were asking for the typewriters. You're out the hundred bucks, but still maintain possession of the of obsolete typewriters. You sell the typewriters anyway regaining that hundred bucks lost.

Now, instead of a hundred bucks worth of obsolete typewriters that still had some value, the scenario above played out for ~$1.8M worth of typewriters.

Now, replace the word "typewriters" with "Bitcoin Magazine". All that was lost was an asset that had some value which increased over the years, of which at one point wasn't worth much.

The hopeful revenue that was lost shouldn't have put BitPay in dire straits, but if they truly needed to liquidate Bitcoin Magazine for $1.8M+ to stay afloat, then I'm beside myself, for even though I'm been somewhat critical of BitPay, I really love/d this company and praised their name every chance I could off- and online.

Coindesk finally chimes in: http://www.coindesk.com/bitcoin-processor-bitpay-reduces-staff-in-cost-cutting-effort

This would be an interesting story. Will try my sources also.

edit: http://www.coindesk.com/bitcoin-processor-bitpay-reduces-staff-in-cost-cutting-effort/

News like this again and again. And people wonder why there's no mass adoption...

It seems like there are no success stories.

Gloomy

There are no success stories in broken business plans indeed.

The writing was on the wall as to BitPay's eventual demise.

They could only ride to coattail of the 2013 bubble for so long until people realized there was no point to buying stuff with BTC and everyone with brains recognized that the whole retail mass adoption was never happening. Why you ask? Well obviously because Bitcoin has a piss poor value proposition from a mainstream consumer standpoint.

With coindesk covering we can be more than certain that this is no longer speculation. What's up with BitPay though? Did the 30m USD investment they received more than a year ago start running out? Just too much bad news for them lately.

looks like bitcoin companies are loosing everything little by little.

bitcoin needs a new edge to get e better foot.

The problem for them is a two years bear market. No one can be bothered spending Bitcoin right now hence they have no business.

The more general concern is that it is pretty clear by now that mainstream consumers are not interested in Bitcoin and perfectly fine with their fiat and credit cards.

well who wouldn't  since fiat and credit cards are easier to use at the moment. 
bitcoin still has a long way to go form buying and selling instantly.   ???

Fortunately commercial retail adoption is a marginal aspect of what makes Bitcoin great and useful and is absolutely not necessary for it to succeed.

Bitcoin doesn't need a "killer app". It will grow organically as it has since its inception. The greatest driver of adoption will be socioeconomic and geopolitical events.

I guess we can expect more downside in the price?

Pretty big news that bitpay layed off 20 employees on pretty much 0 notice.

If they got a bunch of funding you would think that they would be good to go for a while no?

Or did the squander it somehow?

The CEO fucks up and the staff gets laid off... how typical... punish someone else for his incompetence and lack of a proper business procedures. They have to make up for the

$ 2 000 000 they lost, and the easiest way is to trim the least important people in the business. Their main problem is not the $ 2 000 000 ...It's their reputation that is

shattered and how this once again taints the Bitcoin community with another scandal.  ???

This has nothing to do with Bitcoin. I thought we had moved away from such broken logic after Mt.Gox.

Fiat businesses go bankrupt and squander money all the time, this is no an indictment on the form of money itself.

Yea, the main difference being that fiat is a established currency and Bitcoin the new technology trying to disrupt it. Every time a MtGox or a BitPay happens, the shills and

the media jump onto this like flees on a dog. This definitely has a impact on the community.. like it or not... it's a fact.  ::)

It's a fact that intelligent people who would consider Bitcoin as an investment can see this drama for what it is: market participants incompetence.

If that scares a couple of Jims & Sallies on the street from buying Bitcoin that does not bother me one bit because they wouldn't be buying for the right reasons in the first place and it is likely the value they would bring to Bitcoin wouldn't move the needle one bit anyway.

Well, you can't nessecerely blame the CEO for wanting to cut costs. It seems as though the profit wasn't enough, he alone probably couldn't stop this from coming. I'm sure that laying off people was the last resort, probably investors played a role in this.

this exactly. I still don't get how a company dealing with crypto currency is too incompetent to use the most basics like PGP encryption/signing of emails. I would never trust bitpay for a single cent.

It's kinda sad on the part of the employees whether this news is true or not. Losing almost $2m in one instance is a big blow to the company. Saying it is hacked by someone or whatsoever shouldn't be enough on the part of the CEO--he should give more thorough explanations as to why this happened.

This news is true,
http://www.coindesk.com/bitcoin-processor-bitpay-reduces-staff-in-cost-cutting-effort/
Also this is effected to merchants: http://www.coindesk.com/bitpay-cut-free-unlimited-processing-merchants/

Well who needs merchants anyway?


http://nakamotoinstitute.org/mempool/im-hoarding-bitcoins-and-no-you-cant-have-any

So the article that I've read about BitPay's employees crying is true? No wonder they'd be crying because they lose their jobs and it's hard to find a new job nowadays. What I'm doubting is that whether they're really hacked or not (but I know there is much more than just 'hacked').

It has been confirmed that they have lost 2M$ in an email phishing scam/hack.

Although this definitely did not help their cause this obviously is not the reason for the current layoff.

always when you think there won't be anymore bad news from important bitcoin companies or exchanges, you'll realize that we'll never have a year or at least 6 months without troubles. i hope it won't damage the reputation of bitpay.

I've also read that they reduced the number of their employees to 'cut costs' and I wonder how would they still deliver an effective operation given that they have less numbers of employees compared to what they have before. By any means, do you have a link on where you've read that they lost $2M because of the scheme you posted above?

This is a shame, it's always hard to see people losing their jobs and from the sound of it there wasn't any prior notice although after the recent hack news people may have been thinking that there would be some cutbacks.

I hope this is just to save some cash and streamline their workforce and not the downfall of this company, it is true that cutbacks happen in non Bitcoin companies, but I am sure this will get some media attention and a negative spin put on Bitcoin.

http://www.bizjournals.com/atlanta/blog/atlantech/2015/09/atlantas-bitpay-got-hacked-for-1-8-million-in.html

The hack itself damaged BitPay more than anything else. This proves that even though how secure a service can be, there would certainly be some exploits available to be performed on such a service.

Well this is a pity. Not sure about their business model, but their open source contributions have been great. Can't help but think this is all because of the "hack".

So what would happen to all of the companies that accept Bitcoin through Bitpay if Bitpay is to cease its existence? Would we all of the sudden stay without almost half of our merchants? This would suck and it would surely cause the blow to whole Bitcoin economy!

I am sure this is all connected to the recent news on how they have been hacked for almost $2 million. Nothing good will come out of this I am afraid!

Nonsense. Pure nonsense

Bitcoin doesn't exist to buy game credits on Microsoft store.

The reason why they have to cut costs is that barely any of their merchants are seeing any sale from Bitcoin acceptance and therefore they aren't generating any revenue whatsoever.

It's quite a coincidence they decided to cut costs by sacking most of their staff straight after news of the hack got out. They must know they will lose business because some merchants will lose their trust in Bitpay. Its reputation has been damaged so badly I wonder if it can survive in the long term. According to coindesk the average daily volume of Bitpay was $435,000 in 2014. However, I can't find any information on what the average daily volume of Bitpay was in 2015, but they must still have been generating some volume before the hack was exposed.

http://www.coindesk.com/bitcoin-on-the-dark-web-the-facts/

They have been laying off employees for some time now, this is not the first occurrence nor is it the last.

It's obvious their business is struggling. The recent move to depart from the "always free, forever" transaction fees model is another example of this. I can't prove any numbers but I'm confident their 2015 numbers must be miserable.

It's a business after all. I don't mind them raising the fees as long as they are able to keep it fair and well below the fees of Visa, MasterCard and so on. This only opens the doors to new services to convert Bitcoin sales into fiat for merchants. The more companies we have like BitPay, the better. It's a free market, so let them try to snoop a certain percentage of the market with a better business model that suits both the company itself and the merchants.

I appreciate core devs haven't beeing caught in the GavinHearn trap "we need better payment features for customers/merchants so we can compete with PayPal !". Core devs are not compromising security, privacy and censorship-resistance, for user-experience, and I fully agree with them. User experience should be entirely handled by wallets and upper layer protocols.

Good, after the "hacking" incident they proved being huge morons. I still didn't understand the point of Bitpay.
The point of Bitcoin is a decentralized economy, then someone tell me why do I need some third party to deal with my money? If I want to get paid i'll just get an address and share it with whoever has to pay me? Whats the point of Bitpay, it only turns Bitcoin into paypal 2.0

The only thing these guys seem to be good at is raising venture capital and burning through cash. If I had been running the company, I would have placed equal focus on payroll integration and kept costs at a minimum. The executive that sent $1.8 million to the wrong person should have resigned/been forced out immediately.

Here's the RT show: https://www.youtube.com/watch?v=E5rVjD1XCHE

I can't see any possible way this company can survive under its current management. The company's co-founder was on RT.COM just a few days before this announcement. He should have been at the helm of a company war room instead of jetting around having fun.

Your company is about to crash into an iceberg - not the best time to be traveling around doing interviews.

Oh this is bad news. Bitpay is the only major payment processor after coinbase.
Let's hope that it won't get down. We don't want to give coinbase the monopoly.

you must be new to 'capitalism'

bitpay's new business model: https://bitcointalk.org/index.php?topic=1190505.0 :-X

I don't think it'd give coinbase the monopoly but rather open up the space for newer and better competitors. Likely those competitors wouldn't get social engineered into handing out 2 million dollars too.

coinbase is goldman sachs.. hopefully they fail too.

I don't think that'd be the case. Coinbase hadn't had a history of making headlines with bad news.

I think they have a more viable and accessible business model with their exchange and wallet service. I think it's good to have them around, having an easy to use service might introduce more people to bitcoin's fundamentals after they do some research of their own.

Well spotted there MicroGuy. I think the "Couple of thousands of transactions per day" they saw then, will decline to "a couple of hundred transactions per day" after this

fiasco. Tony and Marcel must focus on saving the sinking Titanic, not dancing with the band while it's sinking. Any company would suffer with a $ 1.8 million knock, and

hopefully they will be able to pull it out of the fire. Accept responsibility and publicize the changes that was done to prevent this in future.

https://www.youtube.com/watch?v=E5rVjD1XCHE

@20:09 mark, BitPay processes ~2,000 transactions a day, up 30% from 6 months ago. Based on them numbers, I'd love to see what was presented when seeking VC funding to successfully garner $30M+ in capitals.

EDIT: This post was penned prior to me reading the post directly above this one.

I hear what you all are saying about how we don't need payment processors like Bitpay and how Bitcoin wasn't imagined to work with these processors but to work independently, and I agree with all of this.

But we have to remember one thing, not too many merchants out there would even touch us if there was none of these payment processors. We still need to earn trust, get our price under control, and build our own infrastructure in order to be able to live without Bitpay and others.

Sadly, this is our present and it's like that!

Wonder if Jeff Garzik will still have a job there, and for how long?

Also wonder where all that money went ... pay well I guess. I recall someone saying something along the lines of that BitPay was "creaming it" "an absolute money-making machine" (was that Trace Meyer who said that?).

I wouldn't be surprised considering how they managed to lose that huge sum of money purportedly through email hack? I doubt... but for whatever reason, I only felt sorry for the employee as these has really nothing got to do with them.

Most of the time the same thing happened in outside world corporate scenario when a wrong decision made by the top management will have the downline employees having to bear the burden and suffer the consequences of the loss. This goes to show how unfair things can get.

Maybe the "hack" was actually fake and an attempt at insurance fraud, that would be pretty bad. I like using coinbase as an exchange.

So are you saying that if this trend continues with other big bitcoin businesses laying off their employees that it is a bullish signal for bitcoin?

lol

I do believe so. Trace mayer had said something along the lines of bitcoin companies wasting resources on this block size debate and that is why people are being laid off...poor stewardship of investor funds.

You forget that bitpay themselves were keeping bitcoin on their end..

customers of bitpay could allocate a % of their revenue to keep in USD (or other fiat) and bitcoin.

So yeah bitpay did allow users to choose this. And it wasn't clear cut and dry about converting to fiat 100%.

SO I believe there is a VALUE added in having payment processors to bitcoin.

"who needs merchants anyway?"....<-------------- that is a closed minded way of thinking.

As long as the fiat system exists there will be always the opportunity to add value to the bitcoin ecosystem. The VALUE will not just magically appear into the bitcoin ecosystem. People need to be exposed to it by using bit coin in different ways.

How else are they going to understand how bitcoin work and why it is important if they dont have a viable way to put on TRAINING wheels for the transfer of value from the fiat system to the bitcoin system.

You can't have a clear cut dry merge to bitcoin. This process could take decades.

If the end goal is to have bitcoin be more widely accepted and be more main stream...it will take time and saying that "who needs merchants anyways" is stupid as merchants add value and they help spread the word to others who they know (family friends etc) and that can turn into press as well which is how bitcoin got noticed...through networking of people.

Merchants add value to the bitcoin ecosystem and to turn a blind eye to it saying "it doesn't matter we dont merchants"...is ignorant.

simple: everyone who now still works at bitpay now has to work that much harder/smarter or they will fail as a company.

I'm more convinced that the hack of $2million is the reason for the lay offs and cost cutting.

This is very bad news for the bitcoin industry. Hope the company can survive the disaster. Pray for the staffs who are being lay off...

The logical explanation of this is because the last hack they got , and they probably can't pay everyone now , thats all . (At least I hope)
I don't think there is anything to worry about , they should get back on their feets soon .

But one important thing is that they have to address the security problem. It is obvious that they do not have that process in place and rely on single email for such a big transfer from cold storage!

what does this say about their wallet, will it get shut down soon too?

They just flushed 32.5 million down a black hole. This quote pretty much sums up where the company is headed with its current team.

http://puu.sh/kpZfH/e70fc009ae.png

Best chance of survival would be to replace the guy that sent 1.8 million to the wrong person, and that Italian guy that flies around the world burning through cash telling everyone how great the business is doing. Step one in a turn-around must include replacing both these individuals.

Step two. Processing 2000 transactions a day can be handled by 1 or 2 employees, add one for sales and one for reception, and anything over a staff of 5 is overkill. Shift the focus to include payroll integration like bitwage and quit burning cash. That's the best way to right this sinking ship.

They will probably soon get another VC funding round and get back on track. I don't think that bitty will fail, they seem to be a big bitcoin player and I am sure that their investors won't let them "die" like that.

I really hope that they as an exchange service will continue to function, I rely on them.

alot of merchants also use the bitpay service to accept payments, they should build back up soon.

That's why I'm always excited when a new exchange service launches, we need more of them.