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Author Topic: What does this do to BitPay?  (Read 1228 times)
Manticore (OP)
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April 11, 2013, 03:07:37 PM
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Does BitPay freeze for 12 hours? Do they accept coins at a rate which may change dramatically when we resume trading?

There are several different types of Bitcoin clients. The most secure are full nodes like Bitcoin Core, but full nodes are more resource-heavy, and they must do a lengthy initial syncing process. As a result, lightweight clients with somewhat less security are commonly used.
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April 11, 2013, 03:32:10 PM
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Does BitPay freeze for 12 hours? Do they accept coins at a rate which may change dramatically when we resume trading?



Bitpay will keep doing exactly what they've been doing. They have no reason to stop or freeze just because the price is going down. Since most items' prices are tied to USD, Bitpay will recieve the same percentage no matter what the exchange rate is.

My soap bars that I sell are tied to USD. So now that the exchange rate has gone down the amount of BTC it cost goes up. Bitpay will still receive the same USD percentage.

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April 11, 2013, 03:34:57 PM
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They file bankrupcy and bitcoin crashes to $0.01

WOOOOOOOO!
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April 11, 2013, 03:46:31 PM
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Does BitPay freeze for 12 hours? Do they accept coins at a rate which may change dramatically when we resume trading?



Bitpay will keep doing exactly what they've been doing. They have no reason to stop or freeze just because the price is going down. Since most items' prices are tied to USD, Bitpay will recieve the same percentage no matter what the exchange rate is.

My soap bars that I sell are tied to USD. So now that the exchange rate has gone down the amount of BTC it cost goes up. Bitpay will still receive the same USD percentage.

But isn't bitpay basicly taking the price info from retailer in USD, converting that info to BTC and then taking BTC in payments and selling this at market price and then moving this to retailer?

But if they can't sell the BTC where do they get money? And if the exchange race drop don't they have potential for large losses?

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April 11, 2013, 04:15:10 PM
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Bitpay will keep doing exactly what they've been doing. They have no reason to stop or freeze just because the price is going down. Since most items' prices are tied to USD, Bitpay will recieve the same percentage no matter what the exchange rate is.

Not likely. Bitpay may be be massively overexposed since they were acting as an exchange on behalf of their clients.

Customer pays BTC. Bitpay credits customer account in USD. Bitpay then sell their BTC at the relevant rate.

The problem is the time lag between them crediting a customer in USD and them selling the BTC in USD. If they were holding onto too many BTC, given the meteoric rise in recent days, it's quite likely. In which case they may not have enough USD to cover merchant payouts.

I would most worry if I were a merchant waiting to be paid out.































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April 11, 2013, 04:17:29 PM
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Bitpay will keep doing exactly what they've been doing. They have no reason to stop or freeze just because the price is going down. Since most items' prices are tied to USD, Bitpay will recieve the same percentage no matter what the exchange rate is.

Not likely. Bitpay may be be massively overexposed since they were acting as an exchange on behalf of their clients.

Customer pays BTC. Bitpay credits customer account in USD. Bitpay then sell their BTC at the relevant rate.

The problem is the time lag between them crediting a customer in USD and them selling the BTC in USD. If they were holding onto too many BTC, given the meteoric rise in recent days, it's quite likely. In which case they may not have enough USD to cover merchant payouts.

I would most worry if I were a merchant waiting to be paid out.

And the people who start these bitcoin companies tend to be true believers.. which makes me think they
held onto as much btc as possible as it was making money for them over the last months...

this should be awesome to watch unfold over the next few days.
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April 11, 2013, 04:21:48 PM
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And the people who start these bitcoin companies tend to be true believers.. which makes me think they
held onto as much btc as possible as it was making money for them over the last months...

this should be awesome to watch unfold over the next few days.

Alternative scenario: the $5m trade figure was a load of bullshit and they did very little business. nobody complains because they had barely any customers.

If the $5m figure was REAL, then the only conclusion I can come to is that they are HEAVILY overexposed, since they would have to be dumping those coins very quickly, and I just don't think they would have. I don't know what their payment policies are but most payment merchants can be 14-30 days for a payout. So maybe they were betting on the market and thinking if they wait a few weeks before cashing out they will have twice as much money.... and now they are in big trouble.
































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Bees Brothers
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April 11, 2013, 04:22:56 PM
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Customer pays BTC. Bitpay credits customer account in USD. Bitpay then sell their BTC at the relevant rate.


Not all of BitPay's customers get USD. 

We keep all our sales in BTC.  But we are a really small business.

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April 12, 2013, 10:13:19 AM
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We are fine.  We have already moved nearly all of our trading off Gox, because we max out their monthly limits in 5 days.  All of the exchanges we use are fully operational with no delays in trading or withdrawals.

BitPay : The World Leader in Bitcoin Business Solutions

https://bitpay.com

Does your website accept bitcoins?
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April 12, 2013, 10:19:51 AM
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We are fine.  We have already moved nearly all of our trading off Gox, because we max out their monthly limits in 5 days.  All of the exchanges we use are fully operational with no delays in trading or withdrawals.

Good to hear, if the rest of the community is as sane as you are perhaps we will see stable prices within a reasonably timeframe.
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April 12, 2013, 10:52:14 AM
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We are fine.  We have already moved nearly all of our trading off Gox, because we max out their monthly limits in 5 days.  All of the exchanges we use are fully operational with no delays in trading or withdrawals.

What exchanges are you using out of interest?

I am also interested in whether the recent chaos has impacted the volume of trading for you and other bitcoin-based businesses.
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April 12, 2013, 11:43:33 AM
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Yes, definitely share which exchanges you support. This will provide confidence to others to show there are alternatives, plus add liquidity which can only be a good thing for you too.
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April 12, 2013, 12:48:02 PM
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We are fine.  We have already moved nearly all of our trading off Gox, because we max out their monthly limits in 5 days.  All of the exchanges we use are fully operational with no delays in trading or withdrawals.

Could you please Help me here

Lets take a example scenario

your customer ..say a bicycle vendor ... quotes a bicycle as = 1 BTC on his website. that time BTC is = $70.

This bitpay Customer (cycle seller) Sells 10 bicycles to Mr. CoinCrazy.... that time BTC is = $75.

You (bitpay) receive BTC from the Mr. CoinCrazy (bicycle buyer) ..that time BTC is=  $77

You credit your customer total of $ Huh it could be $700 or $ 750 or $770 ... still I am ok with you crediting him the least bcause uptill here it its ok

You go to your NON mtgox exchange 10 minutes later and sell these 10 BTC when BTC = $ 50 !!!!

what happens ??

alternatively IF you say you will only credit customer after selling BTC in your exchange, customer will get $ 500 which is way below his selling price ...so its just a matter of time before he folds up ??



TIA & regards
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April 12, 2013, 01:24:42 PM
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We are fine.  We have already moved nearly all of our trading off Gox, because we max out their monthly limits in 5 days.  All of the exchanges we use are fully operational with no delays in trading or withdrawals.

What exchanges are you using out of interest?

I am also interested in whether the recent chaos has impacted the volume of trading for you and other bitcoin-based businesses.


+1
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April 12, 2013, 01:31:03 PM
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If the $5m figure was REAL, then the only conclusion I can come to is that they are HEAVILY overexposed, since they would have to be dumping those coins very quickly, and I just don't think they would have. I don't know what their payment policies are but most payment merchants can be 14-30 days for a payout. So maybe they were betting on the market and thinking if they wait a few weeks before cashing out they will have twice as much money.... and now they are in big trouble.

It is pretty easy to see what their payment policies are ... they payout next day.  Would have taken you less time to just lookup their policy then come up with your wild fantasy.
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April 12, 2013, 01:37:04 PM
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We are fine.  We have already moved nearly all of our trading off Gox, because we max out their monthly limits in 5 days.  All of the exchanges we use are fully operational with no delays in trading or withdrawals.

Could you please Help me here

Lets take a example scenario

your customer ..say a bicycle vendor ... quotes a bicycle as = 1 BTC on his website. that time BTC is = $70.

This bitpay Customer (cycle seller) Sells 10 bicycles to Mr. CoinCrazy.... that time BTC is = $75.

You (bitpay) receive BTC from the Mr. CoinCrazy (bicycle buyer) ..that time BTC is=  $77

You credit your customer total of $ Huh it could be $700 or $ 750 or $770 ... still I am ok with you crediting him the least bcause uptill here it its ok

You go to your NON mtgox exchange 10 minutes later and sell these 10 BTC when BTC = $ 50 !!!!

what happens ??

alternatively IF you say you will only credit customer after selling BTC in your exchange, customer will get $ 500 which is way below his selling price ...so its just a matter of time before he folds up ??



TIA & regards


Why not look at their website.  The bicycle merchant would set a price in USD.  Say $700.  Bitpay collects BTC and the merchant gets $700 (minus fees).  Not $750, not $770, not $632.388382989839289.  $700.  Bitpay is then long the equivelent BTC.   You guys really have no imagination do you.   Bitpay can do a nearly unlimited amount of business by just having BTC exposure equal to one hour of business for the entire month.

How?  Bitpay is long some amount of BTC.  They are always long some amount of BTC.  This is unavoidable however the BTC they are long are ALREADY on the exchanges.  So bycicle merchant sells a bike for $700.  Bitpay quotes customer an amount in BTC.  Say 10 BTC.  As soon as customer pays (0-confirm), Bitpay immediately (within seconds) sells 10 BTC (which are already on the exchange).  When customer payment has 1-confirmation they transfer it to the exchange.

Come on people start thinking outside the box.  If you want Bitcoin to grow (real growth in terms of number of users, transactions, merchants) it will take more outside the box thinking. 


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April 12, 2013, 02:06:26 PM
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(a) They are always long some amount of BTC.  This is unavoidable however the BTC they are long are ALREADY on the exchanges.  .....

(b) ...... it will take more outside the box thinking.  



(a) thanks. I was on this line ...oh.... without much thinking outside the box.

(b) I see

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