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Author Topic: Bitcoin-Central, first exchange licensed to operate with a bank. This is HUGE  (Read 117482 times)
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December 07, 2012, 04:55:07 PM
 #201

In a grocery store I pay with dollars coz noone accepts bitcoins. In 20 years the situation will be the same. Because some guys made a bridge between dollars and bitcoins. Because they hid a wallet with coins in a bank vault and gave ppl paper money. Because they made Bitcoin an instrument to store wealth.

Baby steps. First the merchant accepts a card that converts BTC into dollars. From there it's just a tiny step for the merchant to use his own service that accepts BTC and converts it into dollars (like BitPay). This would be good for the merchant, because instead of being locked into VISA or MasterCard, the merchant can accept almost-fee-free BTC transactions, and chose from a very large selection of competing exchange services to convert the money for him. After that it's just another tiny step to simply keep BTC.

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December 07, 2012, 04:59:46 PM
 #202

i thought while davout is still reading this thread i might as well make a proposal for a very simple functionality. its really very simple so its probably already planned anyway, but maybe not  Smiley

so, what i would like to have is the option to do transfers in all supported currencies directly without converting btc manually first. say, for example i need to pay someone 27€. i just fill out a standard (sepa?) form with the account information and 27 in the value field, select euro as the currency and there is an automatically updating field somewhere saying
"this will deduct 2.554345679 btc form your account (exchange rate 1 : 10.5423408)"
click ok, done. one step, no euro dust on my account, no extra hassle. its basically like euro doesnt really exist or is just a unit like converting feet to meter.

doing it like that without prior manual calculation and conversion would make it really fast and convenient and cool.

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December 07, 2012, 05:05:31 PM
 #203

I guess you are pretty busy right now I'd like to know how long your KYC verification takes?
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December 07, 2012, 05:07:56 PM
 #204

In a grocery store I pay with dollars coz noone accepts bitcoins. In 20 years the situation will be the same. Because some guys made a bridge between dollars and bitcoins. Because they hid a wallet with coins in a bank vault and gave ppl paper money. Because they made Bitcoin an instrument to store wealth.

Baby steps. First the merchant accepts a card that converts BTC into dollars. From there it's just a tiny stem for the merchant to use his own service that accepts BTC and converts it into dollars (like BitPay). This would be good for the merchant, because instead of being locked into VISA or MasterCard, the merchant can accept almost-fee-free BTC transactions, and chose from a very large selection of competing exchange services to convert the money for him. After that it's just another tiny step to simple keep BTC.

I largely agree, except that the final step isn't tiny and in my opinion won't happen on a global scale until exchange rates stabilize (which will take a long time). Of course there will be more enthusiastic merchants and people that value and keep the BTC, but I think most merchants will not risk the exchange rate volatility.

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December 07, 2012, 05:11:49 PM
 #205

i sure hope this goes global, they say first step is hardest, well bitcoin did it.
awesome news!

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December 07, 2012, 05:13:54 PM
 #206

I largely agree, except that the final step isn't tiny and in my opinion won't happen until exchange rates stabilize (which will take a long time).
Stabilization of the exchange rate comes through increased adoption.

Once a business is using Bitpay (or an equivalent service) to convert instantly convert BTC sales into local currency they will start asking their suppliers to accept BTC directly so the business can benefit from the lower fees associated with keeping the sale in BTC. These suppliers will probably also start using a service like BitPay because their costs are still in local currency.

BTC use then moves up the supply chain one layer at a time, by the time nobody needs national currencies any more the exchange rate will be dominated by the supply and demand for commerce instead of speculation so it will be stable enough to use directly.

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December 07, 2012, 05:21:06 PM
 #207

If you don't see value here too bad, just don't use us.
DONE! So, now that you are in with the banks, how does one close her account at bitcoin-central?  Kiss

I call on all who agree with Satoshi's and the non-hypocrites among the early adopters' original stance on the banks, to practice what you preached, and close your accounts at Paymium and bitcoin-central, and not use these companies in the future.
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December 07, 2012, 05:23:49 PM
 #208

i thought while davout is still reading this thread i might as well make a proposal for a very simple functionality. its really very simple so its probably already planned anyway, but maybe not  Smiley

so, what i would like to have is the option to do transfers in all supported currencies directly without converting btc manually first. say, for example i need to pay someone 27€. i just fill out a standard (sepa?) form with the account information and 27 in the value field, select euro as the currency and there is an automatically updating field somewhere saying
"this will deduct 2.554345679 btc form your account (exchange rate 1 : 10.5423408)"
click ok, done. one step, no euro dust on my account, no extra hassle. its basically like euro doesnt really exist or is just a unit like converting feet to meter.

doing it like that without prior manual calculation and conversion would make it really fast and convenient and cool.
We already have this feature, it's only available through undocumented API calls yet but the brand new Paytunia iOS app will take advantage of this to transparently funnel EUR through the Bitcoin network. More to come on this in a little while Smiley

I guess you are pretty busy right now I'd like to know how long your KYC verification takes?
We're going through our backlog (the news brought a *massive* influx of new registrations). But unless your account was explicitly flagged for KYC you can start using it right now.

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December 07, 2012, 05:27:49 PM
 #209

Mike Hearn... you're such a smart guy, but everything you say depresses me  Sad

It upset me, too, but can you imagine the level of international bickering among banks that this has the potential to create; especially in a rapidly globalizing economy?

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December 07, 2012, 05:32:21 PM
 #210

I am confused as to how exactly a US resident could participate.  Can I open an account with your exchange?  Can I withdraw USDs from an ATM here in the US?  Or could I use the IBAN to transfer USD from my account with you to my home bank account?  Could I deposit USD from my home bank account to my account with you?  What fees would be involved with doing any of this?

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December 07, 2012, 05:34:33 PM
 #211

BBC is on it now Smiley

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December 07, 2012, 07:42:36 PM
 #212

I'm not familiar with European banks, so could someone please explain the implications of being able to get an account here. I don't quite get what SEPA is or what the big deal of having IBAN numbers is.
Anyone in Europe (the civilized part) can transfer Euro to you for free or minimal charge.  You can do the same the other way.  SEPA transfers are quite fast.  The regulations say maximum D+1 (banking days), and in my experience same day transfer is quite common if you send early.  D is either the day you issue the transfer, if you do it before an afternoon deadline published by your bank, or the first bank day afterwards.

SEPA bank transfers are not harmed by weird USAnian regulations which forbid you to send money where you want (e.g. to companies with relations to Cuba).  Some bank I tried for one day refused to send money to Intersango because of some issues with an USA based intermediary bank, and I guess you must have a lot of these problems if you are trading all over the world.  (I filed a complaint to my national regulators.  The bank called me the day after with a lot of excuses and sent me a compensation because they hadn't specified the restrictions imposed by the intermediate bank in their terms of service.  Tried the bank once due to free international transfers, but I would rather pay a fee than cope with unreliable service.)

So, SEPA sounds like a fast ACH. Most people in the US don't know what ACH is though. If I say to a European customer, "The best method to pay me will be probably making a SEPA transfer; here's my IBAN number.", are they going to know what I am talking about and not be reluctant to do it?

The FATCA stuff is scary and I expect it to be a problem once davout looks into it. I guess it is too early to say what us US people can do with this and I feel I will need to have some real presence in Europe by making a real company there. Right now, the only credit card processor I can get without huge % fees only takes US cards so it is so hard to get international payments and most people don't want to pay $10-20 Western Union fees for a $100 order.

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December 07, 2012, 08:29:32 PM
 #213

If I have a business idea and need a bank account, but my idea encroaches into the other bitcoin services you provide will you still be happy for me to use your banking services?
Could mt.gox open an account with you for banking services if they felt uncomfortable with their current banking arrangements?
mtgox could open an account with us, but not to store their user's funds. to store their own funds would be OK.


This is a good point,was wondering about that. You should be offering bitcoin-business bank accounts!
That is a whole new can of worms though.
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December 07, 2012, 08:31:45 PM
 #214

Not sure if this has been answered yet, but is there an official statement from Aqoba confirming this news?

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December 07, 2012, 09:21:46 PM
 #215

I largely agree, except that the final step isn't tiny and in my opinion won't happen on a global scale until exchange rates stabilize.
There will be no stabilization: bitcoin value will always go up in respect to fiat  Wink

So, SEPA sounds like a fast ACH. Most people in the US don't know what ACH is though. If I say to a European customer, "The best method to pay me will be probably making a SEPA transfer; here's my IBAN number.", are they going to know what I am talking about and not be reluctant to do it?
SEPA is the standard way to transfer money between banks in Europe: not only it's known to everybody (maybe with a different name in every country) but the law forces the cost of the transaction to be the same for in-country or between countries.

So if you have a contract with your bank which gives you free bank transfers in your country, by law the bank must give you free transfers in all the EU zone (like mine).

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December 07, 2012, 09:50:46 PM
 #216

So, to recap:

  • Not a bank.  Not a PSP.  "Partnered with a PSP."
  • Bitcoins still not regulated.  Services that hold and transmit fiat money for others regulated.  Just as before.
  • Bitcoins not insured.
  • Still supporting US and UK users, only now without any USD/GBP exchange.

Ironically, your first act after becoming "licensed" is to make a public announcement insinuating that you are a "bank" and that Bitcoins are regulated and insured.  None of which, apparently, is true.

What marvelous value licensing thus brings to the Bitcoin community!  The value of marketing bullshit under color of law!

Of course, as demonstrated by this thread, none of this makes the least bit of difference to the uncritical legalists in the Bitcoin community.  All you have to do to gain their unwavering trust and support, apparently, is to say magical words like "regulated," "legal," "institution," "funds," and "insured" enough times to cause their higher faculties to shut down due to authoritative goodness overload, and they begin signing up for your service and handing over all their Bitcoins.

Ah well, regardless, good luck in whatever it is you are attempting to accomplish, I suppose.  Perhaps it will provide some value to someone.

Quoted for the vitriol, it's like...on my level. Well done.

The second way is far nastier and more insidious. They are planning to impose a recursive "passthru" 30% withholding tax. That means if you do business with the USA you must follow US law and if you don't, your US assets will be taxed at 30% (essentially bankrupting you or making you uncompetitive). But any business that comes into line because of that must also impose the 30% tax on any other financial institution they deal with, even if that institution does not interact with the US in any way shape or form! Because the financial system is a fully connected graph, this essentially means that US law spreads through it like an infection and eventually every financial institution will be forced to comply or face crippling sanctions from other financial institutions they interact with. This happens even in cases where US law conflicts with local law.

Dave, as you're the one exposed to this stuff, please make super sure you have fully researched this topic. The US will force you to follow its rules whether you like it or not and the French government will not save you - this is not a paranoid hypothetical but a phenomenon that is already happening. Your best bet is to do what all other financial institutions are doing and deny access to "US persons"  (citizens, residents and people who have held a green card in the last 10 years, iirc). This doesn't exempt you from FATCA but it minimizes the amount of paperwork and reporting to the IRS you'll have to do.

Very good points, and a large part of why many people don't want to touch "legitimitizing" BTC with a ten foot pole.

I'm thrilled with this new development in Europe, it's amazing news, and wonderful precedent.

And further shows the center of BTC gravity is EU not US based.  Tongue

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December 07, 2012, 10:07:03 PM
 #217

Roll Eyes  Nothing has been "bought out by the current banking system."  To even suggest that Bitcoin can be bought out betrays a gross misunderstanding of how it operates.
Roll Eyes To suggest that it can't be done betrays a gross misunderstanding of human nature and short-sightedness.
 
We'll see when most large exchanges and >51% of the commercial miners "partner" with the banks and their government regulators in their respective countries.  Not only are they going to be "bought out", but there will be no way to prevent the banks and governments from changing the fundamental rules of the Bitcoin software, and making it into a p2p PayPal with their usual rules. Cheesy

And as we can see here with banking, most of the masses will cheer or won't even care about bank/regulator "partnered" mining also, led by self-serving "integrators" like you and davout.

Quote
This French exchange, to the extent that it has partnered with a banking institution (again, not the same as being "bought out") has simply given you one more option in the manner by which you utilize Bitcoin. No options have been taken from you, only given to you.
We'll see for example, how many "partnered" exchanges continue to allow anonymous accounts, the way bitcoin-central did.

Quote
And as I said before, integration with the traditional financial world is A) inevitable, B) important, and C) not something to be feared.
...
By this point, Bitcoin will have won, and we can all open a bottle of champagne (paid for with BTC) and celebrate, because the fiat system will have  collapsed.
We should be encouraging integration wherever possible, and indeed that is what I spend much of my days trying to accomplish (90% of what BitInstant does is build these integrations).
I bet you do! Thank you for your honesty. Wink We  should be honored, because we are getting a rare chance to interact here personally with evorhees and davout - the rising stars of international bankers/payment-middlemen class, which includes the the current banking and credit-card system elite.

In a few years, we'll only be able to message with their secretaries, while they are busy opening  "a bottle of champagne" (paid for with OUR BTC) and celebrating at the country club with their old banking system "partners"... Cheesy 

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December 07, 2012, 10:11:24 PM
 #218

What I learnt today- the US beuracrats should be boycotted.

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December 07, 2012, 10:19:44 PM
 #219

I'm thrilled with this new development in Europe, it's amazing news, and wonderful precedent.

And further shows the center of BTC gravity is EU not US based.  Tongue

Really? Judging by bitcoincharts.com mtgoxUSD 30d volume of 844k to EUR's 96k, I would have guessed it was US based.

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December 07, 2012, 10:24:45 PM
 #220

We'll see when most large exchanges and >51% of the commercial miners "partner" with the banks and their government regulators in their respective countries


Wouldn't they just have >51% of the mining power of their respective countries, not of the whole Bitcoin network? Or do you expect peace on earth to break out, and countries like Iran, North Korea, and Pakistan to partner with North America, Europe, and India? Or China with any of them?

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