Bitcoin Forum

http://techcrunch.com/2014/09/08/paypal-braintree/

I just read this one in cointelegraph. Paypal will surely get a hold of bitcoin action anytime now.

If this is such great news, then why the drop in BTC price? Granted, the volume is low, so it could mean that people are waiting to decide what to do.. but you would think that there would have been a price spike, but we got the opposite...

Disappointing but true. Maybe it's some big player(s) pushing the price down as much as possible while they can to increase profits later on.

bitcoin will put pp out of business...

...or Paypal will introduce many mainstream businesses to Bitcoin.   :)

It may depend on how they implement the system. If it automatically converts to fiat, then it's not a good news in the short term. For bitcoin to work, everyone needs to accept bitcoin, e.g. You can pay your suppliers with bitcoin,  people take bitcoin as a part of their salary. Paypal could very well make or break bitcoin, depending on the public adoption.

Let's hope so  :)

I don't think it's going to be Paypal making or Breaking Bitcoin but the other way around.  Paypal is the one that needs Bitcoin, if it's not Paypal it will be someone else taking advantage of the opportunity that clear as day.  People don't see Bitcoin for the innovative technology that it is and that is simply underestimating the potential for growth it has in many different ways. 

Braintree is a subsidiary of PayPal. It doesn't mean PayPal completely embrace BTC. There are many factors to be considered, such as state regulation, security etc.

Well this is true for any money transmitter, and considering the size of the paypal network I have a good feeling that they will know how to comply with all applicable laws (and if they don't already, they can sure afford the lawyers to figure it all out).

Hopefully paypal will allow people to accept bitcoin and add bitcoin as an alternative currency in their account (much like international seller accounts) with an option to turn that bitcoin into whatever currency they like for a fee. That way in the beginning people can accept bitcoin and turn it into fiat if they wish. Then little by little as they deal more and more in bitcoin they will just keep the bitcoin balances in their account so that they can bypass the fiat exchange fee.

It takes time for bitcoin to be accepted universally. When more people use bitcoin, they will keep some and not use all, so the user base will increase, hence the value will also increase. Just be patient.

Indeed. They just need to shift to a different way of making business, which may not be easy, but is still better than being replaced. Every corporation needs to grow bigger, acquire new things anyway to remain competitive.

Actually one sentence from Coinbase CEO says it all:
“We had a lot of developers tell us they’d love to add Bitcoin,” said Coinbase CEO Brian Armstrong. “But Braintree would handle all of their payments and they didn’t want to add another SDK. They would say that if Braintree added it, they would add it.”

Hopefully others (braintree clients) will use it as well. Braintree works with: * Uber * AirBnB * Github * HotelTonight * TaskRabbit * Animoto * Scripted

Yes, everyone wants to accept bitcoin, but that's not news. The real question is why me as a user would want to pay with bitcoin? When I pay with credit card, I get 2% cash back. When I pay with bitcoin I have to pay Coinbase 1% fee and I get zero cash back. In addition, I need to make sure the price of bitcoin hasn't moved between the time I bought them on Coinbase till I make the purchase. It's just a complete no-brainer that I should use my credit card whenever I can, instead of bitcoin.
A
nd just to clarify, the businesses are not really accepting bitcoins, they are only accepting them temporarily so they can immediately convert 100% into dollars.

Once PayPal finally do bring this accepting of bitcoin in I believe it's going to be a good thing in the end once they iron out any problems. It's going to be one way I feel to help bring more businesses on board and hopefully encourage them to want to accept.

What is this? like testing the waters before paypal adoption?

They indeed said this was just their first step into cryptocurrencies, so they have further plans they still have to announce.

I would doubt this. If they were to allow this then the buyer protections would likely be lost. Paypal would have little to no way of reversing a transaction that is later determined to be fraudulent. I would envision that paypal would allow people to convert their bitcoin to fiat in their paypal account and the fiat could be used/spent as normal.

Bitcoin remains the best and most liquid savings vehicle over the last five years of its existence. Assuming savings = holding currency for over 1 year.
On 98% of the days that you could have purchased Bitcoin you would have realized an increase in purchasing power in a year's time. In those 2% of cases where you could have purchased Bitcoin and seen a loss over one year, you would have still seen an increase in purchasing power in another 300 days. (This is mostly dealing with the June 2011 bubble)
There has never been a time where you could hold Bitcoin for 2 years and lose purchasing power. On the contrary, holding Bitcoin brings on average a 5x per year return in purchasing power.
Past performance, future gains, blah blah. Judgement is about taking into consideration the facts we have now and comparing them against past performance. There are very good reasons why Bitcoin is valued around $6billion now and very good reasons to think it will be valued higher in the future.
You should be placing your life savings in Bitcoin, and only purchasing the USD that you require and holding it for as short of a period as possible. This would have been the best strategy for 98% of 1 year periods over the last five years, and 100% of 2 year periods over the last 5 years.
Debit cards that draw on Bitcoin balances and allow you to use the VISA and Mastercard networks should be the most interesting products -- because they allow you to expose yourself to the dollar's periodic collapse against Bitcoin for the shortest period of time.
I'm sure I'll be downvoted and that people will tell you that Bitcoin is super risky and that you should only invest what you can afford to lose -- but shouldn't that be the case for the dollar and not Bitcoin?
The dollar loses 90% of its purchasing power against Bitcoin on semi-regular schedules, and people keep purchasing more after each collapse. This routine should get old after a while, but that's what happens when you don't use Bitcoin as your unit of account!

The Bitcoin price is still getting pushed downwards , I am betting its because all of those early adopters spending tens of thousands of dollars on products from overstock, tigerdirect, dell etc as well as those early holders are cashing out every now and then - they have PLENTY of it and have nothing to loose as they are still in heavy profit --  they mined or possibly acquired  thousands @ $5-30,  as time goes by and they spend more and more they will have less to spend and Miners rewards will drop, meaning less minted BTC being sold off daily to pay for mining equipment.

From this point on it is just  going to take time and patience and things will level out.

Serious question:

If one is engaged in entirely legal activities - no money laundering, no drugs, no illegal weapons, no tax evasion, no slipping around international monetary controls - why would one want to use Bitcoin? With the volatility of Bitcoin's price, transfer costs of traditional payment methods (1-3%) are totally dwarfed by the risk of holding Bitcoins for even a short period of time. Maybe there is some opportunity for arbitrage in currency conversion rates, because of the low daily trading volume? But that doesn't seem like a likely profitable investment when you can lose 4% of your value at 3am because of a cascading margin call on a single exchange. Other than currency speculation and the ease of evading the law, why would anyone want to exchange a reasonably stable national currency for bitcoin?

You're absolutely right. It doesn't make sense right now.
But I will say this...you should be grabbing a piece of pie right now!

2% cash back = merchants raise your price by 2% because they get higher fees

The price is volatile today, however it is less so then it has been in years past. I would predict that volatility will decrease over time.

Traditional payment methods have more costs then 3% as this is just the cost of processing the transaction, however the merchant will have costs associated with charge backs which increase overall costs.

The cost associated with sending a bitcoin transaction is essentially free (at most it will generally be no more then $0.05

Not throwing your private key at everyone and having to deal with credit card fraud paper work every 6 months? that seems like a pretty good reason but maybe it's just me...

Well, with bitcoin you won't have to fill any paperwork, since once they are stolen, they are stolen forever and you can't do much about it. At least with credit cards you can have limits and most credit cards have pretty sophisticated fraud-detection systems that limit the damage.

I checked out Braintree's website, and I'm a bit confused how everything works. I think it's mainly for developers? What I understand looking around, is that all the services they offer are plugins to existing companies or payment processors?

I would wish walmart would accept btc more then paypal they will nerf it somehow. (with fees)

Well it's about time they yield to Bitcoin.

Name me 10 currencies you'd be comfortable holding. It'll probably be very difficult. Fact is, billions use currencies with high inflation rates and with relatively short lifespans. And it's not just places like Zimbabwe that have many problems besides insane inflation the past decade. It's also relatively developed countries like Argentina that suffer from insane inflation. It's also small stable countries with a nice standard of living ($27k GDP PPP) with an educated population like Cyprus where many lost their savings as bank deposits were frozen or seized.

And that's just protection from governmental malfeasance that hundreds of millions have to be aware of. But it's also the fact that billions are unbanked. We at HN know more than anyone that providing a physical service (like mail delivery) is 1 million times more expensive than a digital service (like e-mail). Same for banking, for vaults, for ATMs, for services like lending, payments, remittance or money transfer. A digital version can be much cheaper, as well as more accessible. (for a bank you often need proof of identity, residence and employment. Good luck when you have no birth certificate, when you live in a slum, when you have an off-the-record job like selling fruit on the corner of the street). Digital banking can bring cheap financial services to hundreds of millions who don't have it, yet have (intermittent) access to networks as simple as SMS or radio, which can plug in to gateways to the bitcoin network.
Next up is us, the wealthy who enjoy relatively nice financial services. Bitcoin can save 1-3% in fees on any transaction. Imagine that there's a 1-3% tax on everything, not value added, everything, every transaction, whether B2C or B2B, and you have a way to remove that. That's very significant. Entire industries run on margins of 1-5%. Amazon's 2013 margin was 0.35%, imagine they could shave off even 0.5%.

Now that doesn't mean we all should actually buy and hold bitcoin. As you say, the volatility dwarfs this percentage. But volatility can be exclusive to investors. For example, Bitreserve (founded by the founder of CNET) lets you lock in the price. That means you can buy $100 of bitcoin, and see $100 on your account, as if it was Paypal. And then you can spend that $100 anytime you want, and it'll always be worth that much. On the backend the service then lets investors create a market to lock in that price, where various investors make short or long bets, a derivatives market can take out the volatility for the customer, thereby allowing people to use bitcoin, save costs, yet be shielded from volatility. That means business to business payments, too.

Besides that there's lots of other things. Like the fact it can be much more secure. Creditcard fraud is rampant as your password is essentially on the card and you have to share it everytime you pay, it's crazy. Chargeback fraud is an issue. Identity theft is therefore an issue. And you can envision crazy things like a Google driverless car paying, on the fly, to another driverless car infront of it, to move away, so that it can take that lane and go faster, because the one in the back is willing to pay extra for speed, and the one in front is okay with arriving a little later. Those kinds of thing can almost only be built on a global, permissionless protocol layer. So indeed none of us may use bitcoin, it may just be a machine to machine currency, it's too early to tell, it can have an impact in many different ways.

This is one reason that merchants like digital coin. It will increase their margin.