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Author Topic: CoinPal beta - Buying bitcoins with PayPal  (Read 150801 times)
mndrix
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December 31, 2010, 10:32:24 PM
#1

I just opened a new service, CoinPal, for buying bitcoins with PayPal.  The site is currently in beta testing, so purchases must be between 10 and 20 BTC.  Once my current stock of bitcoins is exhausted, the beta closes.  The site will tell you when that's happened.  There's a YouTube video walking through a complete order.

To reduce the likelihood of fraud, you must have a verified PayPal account and provide a phone number during PayPal checkout.  Trade volumes are limited to 20 BTC per payer per week (for now).  Both US and International PayPal accounts are accepted.

I've combed the forum for suggestions on avoiding PayPal fraud and implemented as much as I could.  If you spot any fraud vulnerabilities in the current design, I'd love to hear about them.  Fraud can't be eliminated, but hopefully I can reduce the risk enough to keep the service available.
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December 31, 2010, 10:53:26 PM
#2


Well, it's good you presented it as a beta.  Because I've failed passing through the first step twice.  With two different browsers :  Arora and uzbl.
mndrix
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December 31, 2010, 11:02:09 PM
#3

Well, it's good you presented it as a beta.  Because I've failed passing through the first step twice.  With two different browsers :  Arora and uzbl.

In what way did it fail?  I didn't see anything unusual in the server logs.  Did you get the "Please come back later" message?
mndrix
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December 31, 2010, 11:12:55 PM
#4

Well, it's good you presented it as a beta.  Because I've failed passing through the first step twice.  With two different browsers :  Arora and uzbl.

Thanks for the report.  I was able to reproduce the problem in Arora.  It's fixed now.  Let me know if it persists for you.
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December 31, 2010, 11:38:25 PM
#5

If you are using verified accounts you might want to also use paypal mass pay. Its a bit cheaper than standard paypal transactions as well as less prone to rorting. This is because its not reliant on credit cards. It uses the money already in your account.

The problem is the credit card companies.
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January 01, 2011, 12:14:12 AM
#6

Thanks for the report.  I was able to reproduce the problem in Arora.  It's fixed now.  Let me know if it persists for you.

Nope.  I tries to load during half a sec, and then it stops without changing anything in the page.

I'm using Arora 0.10.2 with libQT 4.6.3 on Debian Sid.
Anonymous
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January 01, 2011, 01:42:39 AM
#7

One thing you might run into is paypal sending you a threatening letter about trademark violation in that you are a payment processor and you have "Pal" in your name. Especially since you are using paypal to process your transactions - they could say you might give the impression Paypal condones the use of their trademarks by third parties.
There is a reason there is not a proliferation of "Pal" sites out there accepting payment. These companies are pretty vicious in protecting their name recognition. They have to take action to protect their shareholders.

Might be easier to change your name now then later on when you are established.

Im not saying I support the existence of these things .





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January 01, 2011, 07:02:41 PM
#8

nice service
bad the fees are ...
mndrix
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January 01, 2011, 08:00:45 PM
#9

Nope.  I tries to load during half a sec, and then it stops without changing anything in the page.

I'm using Arora 0.10.2 with libQT 4.6.3 on Debian Sid.

It works for me with Arora 0.10.1 and QT 4.6.0 on OS X 10.6.  I don't have access to a Debian machine with X, so I can't test it further than that.  Maybe try with Firefox or Chrome, which should be available on Linux.

I've had a few more successful orders come through, so it appears not to be a problem generally.
mndrix
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January 03, 2011, 03:39:47 PM
#10

There were a couple questions about the exchange rate, so I've updated the site's Prices page to make it clearer that I use the lowest ask price on Mt. Gox as the exchange rate.

All paid transactions this weekend were successful, so I've added more bitcoins to extend the beta.  I also applied for PayPal's micropayments rate which should reduce PayPal fees for these transactions.  Once that's done, I'll update the site and post here.

If you are using verified accounts you might want to also use paypal mass pay. Its a bit cheaper than standard paypal transactions as well as less prone to rorting.

I plan to accept mass pay in the future.  With a maximum fee of $1 and many fewer chargebacks, I think it's a great way to buy bitcoins.  Thanks for the suggestion.
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January 03, 2011, 06:04:12 PM
#11

The word "international" is not a synonym for non-USA. International means cross-border.

A payment can be international, but an account cannot be. For example, when a US American buys a bitcoin from a Chilean, the transaction is international but that does not make the US American's account international.

US Americans are the only people who make this mistake, and frankly, it's only one of the myriad ways they make themselves look stupid. So, in the interest of protecting your image, I suggest you correct the terminology on your site.

More important than that, I don't expect you will be able to succeed in this endeavor. Unfortunately soft money spoils hard money and the internet reaches out to millions of immoral people who relish a chance to steal. Paypal account verification will not protect you from chargeback liars and phished accounts. Observe what happened to Mt Gox in November.

You might be new to currency exchange and unfamiliar with the risks. Aside form being robbed by liars or having your funds frozen by Paypal for month or years, other dangers await your being noticed.

I suggest you look into the cases of the US based digital currency exchangers who have been defrauded out of their business, robbed by the owners of the US government, accused and convicted on trumped up charges, in prison, in hiding, or in exile.

The banksters stole the US government and now direct the many federal police agencies. They strenuously resist privately issued money because it spoils their carefully crafted illusion of monopoly. They use the tacit agreement created by their target's use of their property, the fiat money, as legal basis for directing the pwnd police against their rivals, no matter how small they might be. Paypal is not a digital currency, it is a payment processor carrying the property of the issuing governments. Paypal is therefore under the thumb of those who defrauded the citizens out of their democracies.

Currently the best ways to get into Bitcoin are to either trade product or service in the market, or to trade fiat for Liberty Reserve to take to Mt Gox. Forget using soft fiat, such as credit cards or Paypal. Use only non-reversible vectors for transmission of fiat.

https://www.nanaimogold.com/ - World's first bitcoin exchange service
mndrix
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January 03, 2011, 06:22:03 PM
#12

The word "international" is not a synonym for non-USA. International means cross-border.

Thanks for the suggestion.  I'll change the wording when I promote the next bug fixes

Quote
More important than that, I don't expect you will be able to succeed in this endeavor. Unfortunately soft money spoils hard money and the internet reaches out to millions of immoral people who relish a chance to steal. Paypal account verification will not protect you from chargeback liars and phished accounts. Observe what happened to Mt Gox in November.

You might be new to currency exchange and unfamiliar with the risks. Aside form being robbed by liars or having your funds frozen by Paypal for month or years, other dangers await your being noticed.

I appreciate your concern and willingness to warn me of the danger.  I'm aware of the risks I'm taking on.  I'm probably just arrogant, but believe I can succeed where others have failed :-)  Time will tell.
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January 03, 2011, 06:46:58 PM
#13

I appreciate your concern and willingness to warn me of the danger.  I'm aware of the risks I'm taking on.  I'm probably just arrogant, but believe I can succeed where others have failed :-)  Time will tell.

mndrix, kudos to you, man!

Discouragement and failure are two of the surest stepping stones to success. - Dale Carnegie

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January 03, 2011, 06:47:53 PM
#14

I would like to see you succeed but years of bad experiences have made me very skeptical of any currency trades using soft money.

Your Paypal account is tied to a bank account and your gov issued ID, your real name, you home addresss and all your other contact vectors are on file for the pwnd police forces to access at any time.

You cash out a gaming winner and you have commited a felony in USA. But I expect you will get broken by the fraudsters before then.

BTW, the owners of the US gov are known to organize fraud and dos attacks and other crimes when that is easier than lying in court. You are facing a very dirty enemy.  This is why I don't think you know the risks.

Make us a list of all the US based digital currency exchangers.

https://www.nanaimogold.com/ - World's first bitcoin exchange service
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January 04, 2011, 01:30:55 AM
#15

I have to agree with nanaimogold. Accepting PayPal for Bitcoin is a very bad idea.

It is just a matter of time before you are scammed into oblivion.

I wish I had better news for you, but I've seen it happen way too many times. Sad

The Madhatter
mndrix
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January 04, 2011, 03:06:41 AM
#16

I fixed a bug when submitting the initial order form which caused some browsers to download a gzipped file instead of displaying the proper HTML page with pricing details.  Thanks to hacim for help testing a few relevant fixes.  If any of you were prevented from ordering because of this bug, give it a try again.
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January 04, 2011, 05:15:47 AM
#17

Just putting a quick testimonial out there - worked fine for the transaction I made.  Hoping it doesn't get hit by scammers, would be a shame to lose such an easy-to-use exchange. 
mndrix
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January 04, 2011, 01:41:39 PM
#18

The beta is closed for a couple days.  A steady stream of orders yesterday bought all my coins just in time for me to leave town.  When I get back later this week, I'll restock and try to keep the service up as permanently as possible.  The site is still up for browsing, you just won't be able to place orders.
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January 04, 2011, 11:02:29 PM
#19

It's nice to see someone step up and run an experiment like this.  Regardless of whether or not it ultimately succeeds, I believe it will provide valuable information.   Others will be able to learn from the inevitable bureaucratic and fraudster attacks.   

It will also be very interesting to see what if any legal precedents are set with regards to paypal-to-bitcoin businesses meeting the legal definition of a money handling service.   Will bitcoin be classified as "money" or "currency" or whatever the feds need to call it so they now have an excuse neuter the threat with regulation?
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January 05, 2011, 05:12:26 AM
#20

The beta is closed for a couple days.  A steady stream of orders yesterday bought all my coins just in time for me to leave town.  When I get back later this week, I'll restock and try to keep the service up as permanently as possible.  The site is still up for browsing, you just won't be able to place orders.

Thanks mndrix, let me know when you're back and if you get some new inventory, I'd love to try it out.
mndrix
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January 06, 2011, 04:41:01 PM
#21

The service is open for business again.  PayPal approved me for their micropayments fee structure which amounts to a 26% decrease in PayPal fees on a 20 BTC order.

I made a few adjustments to fraud detection.  If things continue working well for the next week or so, I'll increase the maximum order limit.
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January 06, 2011, 05:03:01 PM
#22

The service is open for business again.  PayPal approved me for their micropayments fee structure which amounts to a 26% decrease in PayPal fees on a 20 BTC order.
cool! Smiley

Quote
I made a few adjustments to fraud detection.  If things continue working well for the next week or so, I'll increase the maximum order limit.
best be very careful with that.

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January 06, 2011, 05:52:55 PM
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Bravo..... on having the courage to keep trying.    Smiley

Wishing you Success.

( I just now added you to http://bitcoincard.com )
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January 08, 2011, 05:05:32 AM
#24

Hey, mndrix
I want to thank you for making my first USD to BTC transaction a breeze  Cheesy

As a total newb, and as someone who gets a little put-off by the charts and graphs and puzzling exchange-rate numbers that are sometimes thrown in people's faces upon visiting some other sites ... I totally appreciate what you're doing.

mndrix
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January 08, 2011, 02:53:33 PM
#25

I just fixed a bug with email addresses using capital letters.  If you got an error message about email addresses not matching when placing an order, it should work now.

This has turned out to be much more popular than I anticipated.  I'm restocking coins as fast as I can, but it looks like I'll run out again this weekend.  Could be mid-week before I have a substantial inventory again.  Eventually I'll implement dynamic pricing to keep supply and demand in balance, until then it could be on again, off again.  Thanks for all the feedback.
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January 08, 2011, 03:36:52 PM
#26

Just to confirm that I successfully purchased 20BTC on CoinPal.

Good luck with that.
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January 08, 2011, 05:06:53 PM
#27

works great. thanks.
mndrix
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January 10, 2011, 03:23:43 PM
#28

Coins sold out last night.  I'm working on a deal that should get me coins to reopen later today.  I'll post here when I'm open again.

I also fixed a bug in my volume limit calculations which caused some people to be told they had exceeded their weekly volume limit when they actually hadn't.  That bug is fixed now.

Thanks for the feedback and patience during the beta.
mndrix
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January 10, 2011, 05:01:22 PM
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Open again with about 3x the inventory.  Thanks to morpheus for the pleasant MTGUSD trade.  I should have about 10x the inventory by the end of the week.  Hopefully that can meet demand for a little while.

A few people have asked me about the volume limits.  I'll raise them when I can.  Selling 200 BTC spread across 10 customers gives 10 people a taste of Bitcoin which is probably better for the community.  It also reduces fraud likelihood and gives me more data points for my fraud prediction model.
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January 11, 2011, 05:24:59 AM
#30

Just a heads-up, in case you weren't already aware ... IRS 6050W:

Quote
If you meet the stated thresholds [at least 200 trxs/year and at least $20K gross sales], you will be required to verify your identity by adding a SSN/TIN/EIN to your existing account.

Quote
If you are currently using a Personal or Premier account, you will be required to upgrade to a Business account.

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

i.e., PayPal will be reporting the gross revenues you received on a 1099-K sent to you and to the IRS.

http://federalregister.gov/a/2010-20200
http://www.irs.gov/pub/irs-news/reg-139255-08.pdf

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January 12, 2011, 03:21:03 PM
#31

First CoinPal transaction (and first forum post) a resounding success. Thanks mndrix
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January 13, 2011, 06:21:44 PM
#32

This is why we need a Bitcoin-for-Cash dealer on every corner of every village, every town, every city, in every country.   Email me to list yourself as a Bitcoin-for-Cash contact in your own town.... on http://bitcoinbuy.com     Every one of us should be a volunteer bitcoin-for-cash person wherever you live.....  Contact me to get listed.  My email is:  email@bitcoinme.com
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January 13, 2011, 09:50:09 PM
#33

This is why we need a Bitcoin-for-Cash dealer on every corner of every village, every town, every city, in every country.   Email me to list yourself as a Bitcoin-for-Cash contact in your own town.... on http://bitcoinbuy.com     Every one of us should be a volunteer bitcoin-for-cash person wherever you live.....  Contact me to get listed.  My email is:  email@bitcoinme.com


The problem with that is some people have very little bitcoins.
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January 14, 2011, 03:57:44 AM
#34

This is why we need a Bitcoin-for-Cash dealer on every corner of every village, every town, every city, in every country.   Email me to list yourself as a Bitcoin-for-Cash contact in your own town.... on http://bitcoinbuy.com     Every one of us should be a volunteer bitcoin-for-cash person wherever you live.....  Contact me to get listed.  My email is:  email@bitcoinme.com


The problem with that is some people have very little bitcoins.

That's why we need it, so people can buy more of them.

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|      FACEBOOK      |      SLACK      ▀▀▀▀      WHITEPAPER      ▀▀▀▀      TWITTER      |      TELEGRAM      |
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January 14, 2011, 02:07:09 PM
#35

This is why we need a Bitcoin-for-Cash dealer on every corner of every village, every town, every city, in every country.   Email me to list yourself as a Bitcoin-for-Cash contact in your own town.... on http://bitcoinbuy.com     Every one of us should be a volunteer bitcoin-for-cash person wherever you live.....  Contact me to get listed.  My email is:  email@bitcoinme.com

I suppose I'd be up for that here in Manchester, CT, but all I'd be doing is reselling from Bitcoin Gateway. Why wouldn't potential buyers just go to my Bitcoin Gateway in the first place?

Use my Trade Hill referral code: TH-R11519

Check out bitcoinity.org and Ripple.

Shameless display of my bitcoin address:
1Hio4bqPUZnhr2SWi4WgsnVU1ph3EkusvH
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January 14, 2011, 03:15:58 PM
#36

Using bitcoin means your bitcoin dealer can be on the other side of the world. It brings people together from everywhere and breaks down barriers.

mndrix
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January 14, 2011, 06:19:27 PM
#37

I've increased CoinPal purchase limits to 40 BTC per week.  Past customers who hit the old limit can immediately place orders up to the new limit.

Depending on typical order size and future BTC exchange rates, I may change my PayPal account back to the standard fee structure.  The standard fee structure gives lower fees for payments over $11.90.  I'll post here if/when that happens.

I anticipate current order limits staying in place until the end of February or March.  That gives the initial transactions enough time to mature past the PayPal dispute deadline (45 days) and to approach the credit card chargeback deadline (~90 days).  Which gives me better data for my fraud prediction model. I'd rather go slowly and keep the service open than rush to a hasty demise.
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January 14, 2011, 06:34:39 PM
#38

I've increased CoinPal purchase limits to 40 BTC per week.  Past customers who hit the old limit can immediately place orders up to the new limit.

Depending on typical order size and future BTC exchange rates, I may change my PayPal account back to the standard fee structure.  The standard fee structure gives lower fees for payments over $11.90.  I'll post here if/when that happens.

I anticipate current order limits staying in place until the end of February or March.  That gives the initial transactions enough time to mature past the PayPal dispute deadline (45 days) and to approach the credit card chargeback deadline (~90 days).  Which gives me better data for my fraud prediction model. I'd rather go slowly and keep the service open than rush to a hasty demise.

i wouldn't hurry too much to raise the limits. you'll get plenty of volume due to high number of customers, while keeping fraud risk from any individual account low.

you have a great service there, i'd hate to see it go bust due to one or two large frauds.

Join #bitcoin-market on freenode for real-time market updates.
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January 14, 2011, 10:33:37 PM
#39

Set the maximum purchase to $11.90 to make it profitable on the micropayment fees.

http://images.onbux.com/banner.gif
I then use the money to buy BitCoins. You can too!
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January 14, 2011, 10:36:54 PM
#40

This is why we need a Bitcoin-for-Cash dealer on every corner of every village, every town, every city, in every country.   Email me to list yourself as a Bitcoin-for-Cash contact in your own town.... on http://bitcoinbuy.com     Every one of us should be a volunteer bitcoin-for-cash person wherever you live.....  Contact me to get listed.  My email is:  email@bitcoinme.com


Bruce--Thanks so much for making bitcoinme.com.  That's a site I can actually send people to and expect them to be attracted to bitcoin without needing a degree in math, as opposed to the comparatively noob-unfriendly bitcoin.org!  I've been wanting to do a big pitch for it to my social network contacts, but I've been waiting for the images to start working again so it looks proper professional.  Any idea when that might be?  Is it something I could send you some donations towards?  I'd love to have that be a reliable place I can just send people when they ask me what bitcoin is.

Sincerely,
eMansipater

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
mndrix
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January 14, 2011, 11:18:23 PM
#41

As some have requested, I've added a rudimentary API (I hesitate to even call it that).  It lets you pre-populate a CoinPal order form with a bitcoin address and an optional amount.  It also lets you show a recipient name instead of the full Bitcoin receiving address.

For example: donate 10 BTC to the EFF.  Of course, there's no authentication on who the Bitcoin address really belongs to, so you can also donate to The Human Fund on my behalf
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youtube.com/ericfontainejazz now accepts bitcoin


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January 15, 2011, 12:03:39 AM
#42

I'm worried that "CoinPal" will get sued by "PayPal" for trademark violation.  I've heard so many nasty stories about companies like "Facebook" suing any social networking site with "Face" or "Book" in the url.  And I remember the Liberty Dollar was ultimately taken down under the pretense that it violated the US trademark on "Dollar"...

"We will not find a solution to political problems in cryptography, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

Governments are good at cutting off the heads of a centrally controlled networks, but pure P2P networks are holding their own."
mndrix
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January 15, 2011, 02:40:57 AM
#43

I'm worried that "CoinPal" will get sued by "PayPal" for trademark violation.

I haven't been able to find specific information about PayPal having a trademark on *Pal, but enough people have expressed concern, that I'm going to change the name.  Any suggestions?

I'm leaning toward Copal, which portmanteau-ishly suggests what the service does, is an existing word so it can't be trademarked and goes well with the name Cowalla (the planned name for a future Dwolla->BTC service).
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January 15, 2011, 03:18:50 AM
#44

There used to be a service called Gunpal.

I dont think they ever got sued by paypal so we might be wrong about this.

I suppose you could always approach paypal and ask about it. If they dont respond or send a form letter you will have the out that you told them but they ignored it.

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January 15, 2011, 04:43:17 AM
#45

I'm worried that "CoinPal" will get sued by "PayPal" for trademark violation.

I haven't been able to find specific information about PayPal having a trademark on *Pal, but enough people have expressed concern, that I'm going to change the name.  Any suggestions?

I'm leaning toward Copal, which portmanteau-ishly suggests what the service does, is an existing word so it can't be trademarked and goes well with the name Cowalla (the planned name for a future Dwolla->BTC service).

i might suggest to stay away from 'pal' completely. how about something nice and generic, like 'bitcoinsource' Smiley
then you can use the same site for paypal, dwolla, $anything else.

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January 15, 2011, 05:06:35 AM
#46

I'm worried that "CoinPal" will get sued by "PayPal" for trademark violation.

I haven't been able to find specific information about PayPal having a trademark on *Pal, but enough people have expressed concern, that I'm going to change the name.  Any suggestions?

I'm leaning toward Copal, which portmanteau-ishly suggests what the service does, is an existing word so it can't be trademarked and goes well with the name Cowalla (the planned name for a future Dwolla->BTC service).

i might suggest to stay away from 'pal' completely. how about something nice and generic, like 'bitcoinsource' Smiley
then you can use the same site for paypal, dwolla, $anything else.

+1

I like bitcoinmeter but someone already owns it.... Wink
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January 15, 2011, 01:02:16 PM
#47

I would stick with CoinPal. It's a great name! If and when you get a nasty letter from PayPal's lawyers, that's when you need to consider changing the name. Not before.

That doesn't seem wise.  Planning ahead is one of the great abilities us humans have.  We should use it to anticipate potential problems so we can avoid them.

"We will not find a solution to political problems in cryptography, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

Governments are good at cutting off the heads of a centrally controlled networks, but pure P2P networks are holding their own."
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January 15, 2011, 01:03:49 PM
#48

I would stick with CoinPal. It's a great name! If and when you get a nasty letter from PayPal's lawyers, that's when you need to consider changing the name. Not before.

That doesn't seem wise.  Planning ahead is one of the great abilities us humans have.  We should use it to anticipate potential problems so we can avoid them.
Agree with you. You may be forced to pay damage fees bo PayPal if they enforce it.

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January 15, 2011, 01:12:12 PM
#49

I would stick with CoinPal. It's a great name! If and when you get a nasty letter from PayPal's lawyers, that's when you need to consider changing the name. Not before.

Pay Pal will sue for profits, which have likely already been spent.

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January 15, 2011, 04:04:41 PM
#50

CoinBuddy? CoinChum? Smiley
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January 16, 2011, 07:07:26 PM
#51

But changing the name is such a minor thing that it might as well be done to be on the safe side.  It will have little impact on the operation and traffic of the site, whereas in your example if Mt Gox had chosen not to accept PayPal, that would have been a severe change in the operation of the site.  Here, it's just a name.  Perspective is key.

As for the name itself, Nanotube's suggestion of Bitcoin Source sounds good to me.
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January 18, 2011, 03:59:57 PM
#52

The bigger and more established a business and/or trade name is, the more painful it usually is to change. 

If the above premise is true, and the coinpal name is more or less guaranteed to draw legal fire from Paypal down the road, it would stand to reason that the earlier a name change "course correction" is made, the better. 
mndrix
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January 18, 2011, 07:02:30 PM
#53

Thank you all for your thoughts on the CoinPal name.  As suggested above, I've contacted PayPal for clarification on their trademark policy.  Until I get official notice, I'll retain the current name in the spirit of avoiding premature optimization.

A few more people have contacted me about increasing volume limits for specific buyers.  I'm testing a feature which could increase limits for buyers who provide sufficient proof that they are the rightful owners of the associated PayPal accounts.  I agree with nanotube and am in no hurry to increase the limits if it has any risk of shutting down the service because of fraud.  Aside from my one beta tester on this identity verification feature, no one else is likely to get a higher limit until at least March.
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January 19, 2011, 02:45:55 AM
#54

I know it's too early but here's a feature request: Sending micropayments to PayPal users using BitCoin.
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January 19, 2011, 03:25:33 AM
#55

I know it's too early but here's a feature request: Sending micropayments to PayPal users using BitCoin.

Good idea.  Something similar is on the drawing board.  It'd work roughly like this:

  • user populates a form with a PayPal address and preferred currency
  • CoinPal responds with a new Bitcoin address
  • Any Bitcoins sent to that address are automatically converted into a PayPal payment to the associated PayPal address

The PayPal payment would use Mass Pay so the fee would be 2% but never exceed $1.  That's the lowest PayPal fee I know of for automated transactions and it should work decently for microtransactions.
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January 19, 2011, 04:54:37 PM
#56

the fee would be 2% but never exceed $1.

Yes, this is an additional benefit for all of us who pay very high fees when sending. I can't wait to use it. Cheesy

Though, I, for instance, would use it to send money to arbitrary addresses, therefore, instead of generating a new address for each transaction, being able to deposit directly to CoinPal and taking it from there would suit me most. However, the way you plan to implement it obviously addresses the majority use case, so I'll just hope it will be implemented in the far future.

EDIT: I just realized that a payment option via a service like MyBitcoin is almost the same in effect.  Smiley

Thanks for this great service.
mndrix
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January 24, 2011, 02:38:24 PM
#57

The scammers have arrived.  CoinPal will be closed for the next few days while I analyze a batch of fraudulent orders from this weekend and make any necessary changes to the site.  Any financial losses were well within expected ranges, so this is actually good news for CoinPal.  It's hard to build fraud-prevention measures without experiencing some fraud.
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January 24, 2011, 03:23:49 PM
#58

The scammers have arrived.  CoinPal will be closed for the next few days while I analyze a batch of fraudulent orders from this weekend and make any necessary changes to the site.  Any financial losses were well within expected ranges, so this is actually good news for CoinPal.  It's hard to build fraud-prevention measures without experiencing some fraud.

I am saddened to hear that. My condolences, but I agree with your conclusion and positive attitude.

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January 25, 2011, 10:45:14 AM
#59

Could you, please, publish the addresses where the bitcoins from the fraudulent transactions were sent?

+1
Not that it will change much right now, but it would be good to develop such practice.

18rZYyWcafwD86xvLrfuxWG5xEMMWUtVkL
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January 25, 2011, 12:32:59 PM
#60

I honestly hope you defeat these douchebags




mndrix
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January 25, 2011, 03:07:40 PM
#61

Could you, please, publish the addresses where the bitcoins from the fraudulent transactions were sent?

For those who are curious, here's a sample of addresses to which bitcoins were sent based on fraudulent PayPal payments.  It'd be a fun project to see where the "dirty" coins go.  Presumably, they're laundered rapidly:

  • 1FH274XRPhbiiSnT6hJXaqHnJwvWtsgWDU
  • 16WRE4GjnwEv35ZAvJ87MKQV86GJxyDips
  • 19ppPM6Vu4DNPbqtvDT5fUvKB1MwmQu7aB
  • 1CqRu4kwsTB7MgT9t25qt8eSDnRDVxpZL3

I won't publish the full list.
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January 25, 2011, 03:14:56 PM
#62

You got that many scammers? I expected just a few. I wish we could at least find one or two of them and teach them a lesson.

I don't think tracing the coins will be relevant, they could have just sold them on mtgox or somewhere to someone who didn't have a clue where they originated from. :/
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January 26, 2011, 08:45:39 AM
#63

At least anyone saying bitcoin is not anonymous enough can try to prove it.

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January 26, 2011, 10:50:39 AM
#64

At least anyone saying bitcoin is not anonymous enough can try to prove it.
i think "pseudo anonymity" describes it pretty well.
anyone who did her homework can access bitcoin network in a way that protects her true IP and identity
+ paypal fraud included most probably stolen id information + account into.

all that we can find out is barely patterns how the dirty bitcoins moved until they they were laundered.
assume IP addresses are found -> unusable if i2p or tor were used or a zombie botnet pc was used as exit point
assume we trace bitcoins through a chain of addresses -> they end up in a laundry / pool and become untraceable



I don't think all of those scammers would be smart enough to go through Tor or i2p - perhaps they just cracked someone's password for their email and used their paypal account (which, knowing some people's level of security awareness, had identical password to the email account password).

On a side note, it's just pathetic that they are ruining the good service for the sake of 40 BTC. Gordon Gekko would laugh hard. Smiley
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January 26, 2011, 11:01:28 AM
#65

At least anyone saying bitcoin is not anonymous enough can try to prove it.
i think "pseudo anonymity" describes it pretty well.
anyone who did her homework can access bitcoin network in a way that protects her true IP and identity
+ paypal fraud included most probably stolen id information + account into.

all that we can find out is barely patterns how the dirty bitcoins moved until they they were laundered.
assume IP addresses are found -> unusable if i2p or tor were used or a zombie botnet pc was used as exit point
assume we trace bitcoins through a chain of addresses -> they end up in a laundry / pool and become untraceable



I don't think all of those scammers would be smart enough to go through Tor or i2p - perhaps they just cracked someone's password for their email and used their paypal account (which, knowing some people's level of security awareness, had identical password to the email account password).

On a side note, it's just pathetic that they are ruining the good service for the sake of 40 BTC. Gordon Gekko would laugh hard. Smiley

It is pathetic, but they didn't ruin the service, as mndrix said he was expecting and is going to learn from it. There will be a better service in the end.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
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January 26, 2011, 11:25:41 AM
#66

It is pathetic, but they didn't ruin the service, as mndrix said he was expecting and is going to learn from it. There will be a better service in the end.

Yeah, what I meant was they're causing some (hopefully minor) hassle.
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January 26, 2011, 03:44:12 PM
#67

At least anyone saying bitcoin is not anonymous enough can try to prove it.
i think "pseudo anonymity" describes it pretty well.
anyone who did her homework can access bitcoin network in a way that protects her true IP and identity
+ paypal fraud included most probably stolen id information + account into.

all that we can find out is barely patterns how the dirty bitcoins moved until they they were laundered.
assume IP addresses are found -> unusable if i2p or tor were used or a zombie botnet pc was used as exit point
assume we trace bitcoins through a chain of addresses -> they end up in a laundry / pool and become untraceable



I don't think all of those scammers would be smart enough to go through Tor or i2p - perhaps they just cracked someone's password for their email and used their paypal account (which, knowing some people's level of security awareness, had identical password to the email account password).

On a side note, it's just pathetic that they are ruining the good service for the sake of 40 BTC. Gordon Gekko would laugh hard. Smiley

You think someone willing to commit credit card fraud/identity theft to buy Bitcoins isn't familiar with Tor or i2p?? That's being a bit naive imo
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January 26, 2011, 03:57:35 PM
#68

You think someone willing to commit credit card fraud/identity theft to buy Bitcoins isn't familiar with Tor or i2p?? That's being a bit naive imo

You're probably right there... I would just love to be able to catch at least one of these f*ckers.
mndrix
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January 26, 2011, 10:45:53 PM
#69

The service is open again for those few beta testers with privately increased purchase limits.  Our current inventory is reserved for them, so anyone else will see the out of stock page when placing an order.

PayPal finished switching my account back to the standard fee structure.  That reduces PayPal fees by 10% on a 40 BTC order.  The savings are higher for larger orders.

I'm still working on fraud-related changes to the site as time permits.  It may still be a few days until the site's open to the public again.
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January 27, 2011, 02:38:41 PM
#70

Could I get in on this as well? I've only got a couple bucks so it'd be a small order but I'd like to build some trust so I can use the service later  Grin (when I finally acquire some monies)

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January 28, 2011, 08:32:37 PM
#71

Was this your scammer?
Quote
i've got a premier, verified, account with a WaMu checking and a Mastercard attached. i want to clean it out.

i've got access to the email address and the paypal. i'm tempted to find somewhere to buy bitcoins with pp, then send the bitcoins to another account, one more account, then to liberty reserve (through, say, MtGox).

how traceable is this?
  http://www.zoklet.net/bbs/showthread.php?p=2441858

Scary stuff.

mndrix
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January 28, 2011, 09:32:36 PM
#72

Was this your scammer?

Fascinating.  I don't know if he was involved, but it seems this sort of thing is far more common than I had imagined.  Thanks for sharing.
mndrix
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January 28, 2011, 10:16:17 PM
#73

CoinPal is open to everyone again for the next hour.  If you've been waiting to buy some Bitcoins with PayPal now's your chance.  I'm about half-way done with anti-fraud changes I want to make to the site and thought it was a good point to open up again for a little while.
mndrix
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January 28, 2011, 11:00:37 PM
#74

CoinPal is open to everyone again for the next hour.

The test is going well so far.  I'll leave it open until the coins run out.  That'll probably happen later tonight or tomorrow morning, depending on order sizes.
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January 31, 2011, 05:54:26 PM
#75

I love this service. So much easier than any other way to get BTC.

Suggestion: Have three-tiers of purchasing

Lowest level: Can only purchase a very small number of BTC, using your current structure.

Middle level: Can purchase more once you send them a letter containing a password to their confirmed paypal address. For the cost of a stamp, you can prove that a paypal account is not stolen. This could even be automated using a mailing service like l-mail.com

Highest level: Can purchase large quantities of bitcoins, which are "shipped" to the confirmed address using a password inside a USPS padded envelope (with additional padding to make it is just large enough to qualify for a tracking number). Shipping with a tracking number qualifies the shipper for seller protection in case of fraud. People sell gold all the time using Paypal, so I would imagine that selling BTC should be possible too. Note that you have to get signature verification on shipments worth more than $250.

The biggest risk is that fraud will occur on the highest-level tier, and PayPal will investigate and decide that you are breaking their user agreement somehow and shut you down.

You might be able to get additional protection by doing more of your communication through paypal (for instance, if the buyer gives you their bitcoin address through paypal, you could then prove that you transferred the bitcoins to the address they provided). However, that would rely on the support folks at PayPal not being lazy and incompetent, which may not be a good bet based on some things I have read.

Since you are building a reputation for honesty, you could probably also offer to buy bitcoins using paypal, making it easier for people to sell them as well.

I was saving this idea for possibly using it myself someday, but I decided to give it away to whoever wants it. Hopefully this information won't push up the value of bitcoins too quickly, since I haven't finished buying the ones I want yet. If anyone benefits from this idea, feel free (but not obligated) to tip me here: 19hMEAaRMbEhfSkeU4GT8mgSuyR4t4M6TH

mndrix
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January 31, 2011, 06:23:50 PM
#76

I love this service. So much easier than any other way to get BTC.

Thanks.

Quote
Suggestion: Have three-tiers of purchasing

Thanks for the suggestions.  I have one beta tester testing an address verification system similar to what you suggest for the middle level.  If testing goes well, this will be available more widely.  I'll definitely consider implementing something like the highest level.
mndrix
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January 31, 2011, 06:27:49 PM
#77

CoinPal is open to everyone again for the next hour.

The test is going well so far.  I'll leave it open until the coins run out.  That'll probably happen later tonight or tomorrow morning, depending on order sizes.

Brief update: this weekend's tests went well.  They turned up a couple bugs in my new code which I've fixed.  I'll keep working on anti-fraud measures so I can open to the public again.  Thanks for your patience.
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January 31, 2011, 11:26:33 PM
#78

Middle level: Can purchase more once you send them a letter containing a password to their confirmed paypal address. For the cost of a stamp, you can prove that a paypal account is not stolen. This could even be automated using a mailing service like l-mail.com
Are you suggesting people would email their paypal password to the coinpal maintainer? I doubt you'd find anyone willing to do this.
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January 31, 2011, 11:28:47 PM
#79

The suggestion was for the seller to mail a password to the buyer who would then communicate it to the seller to receive the bitcoins. That was fairly clear, don't see how you missed that.

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February 01, 2011, 12:30:51 AM
#80

The reason for mailing something is to get seller protection from paypal, as well as ensure that the paypal account hasn't been hijacked.

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February 01, 2011, 12:31:54 AM
#81

The suggestion was for the seller to mail a password to the buyer who would then communicate it to the seller to receive the bitcoins. That was fairly clear, don't see how you missed that.

seller is already using email to send a piece of information to the buyer to continue to the transaction.
(not a password but a link, that the buyer must visit to compete the buy process)

the problem with attackers is that they control both paypal and email, making the anti fraud protection difficult.
any other checks you can think of? (can not automate phone calls, phone calls would rise the costs for exchange up even higher than they're now)
let us assume that the attacker has compromised the buyer identity in all possible ways (control of pc, email, paypal - all usernames & passwords). that really sucks.

Quote
send them a letter containing a password to their confirmed paypal address. For the cost of a stamp

So I believe he means that rudimentary form of communication of old, back from when fog prevented efficient communication using smoke signals, or background noise degraded the quality of whistle based conversations... I think they call it "snail mail", probably because it leaves a trail of goo or something Smiley
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February 01, 2011, 02:09:31 AM
#82

good point here. i do not see a similarity with smoke signals and other archaic methods. this is a legit requirement for new customers
to finish a registration including snail mail.

And once again my attempt at sarcasm goes completely unnoticed... I really suck at this! Smiley
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February 01, 2011, 12:42:57 PM
#83

This forum account was not created for anonymity, nor was the corresponding freenode IRC nick, "knotwork".

WHOIS knotwork.com and WHOIS knotwork.net are also not intended to be anonymity tools.

Until I develop a means for hosting to pay for itself neither of these domains are actually hosted. I registered them through, and keep them at, networksolutions mainly because it seemed to be the direct descendant of the original NIC and I figured if it actually is CIA NSA etc crony then at least maybe it inherits classic U.S. freedom of speech traditions as well as the military backing of the U.S. Marine Corp.

The PayPal address I use for making money purposes is at a subdomain of knotwork.com thus does not actually work for email, but PayPal, happily, does still allow it to work for PayPal transactions.

I might have some e-gold rotting (storage fees) in an e-gold account if it hasn't already rotted to nothing but PayPal balances might rot faster due to inflation so this thread came to my attention in the process of wondering whether I might be better off moving my seldom used PayPal balance(s) over to BitCoin. So figured I might as well at least start toward such a potential future by introducing myself.

-MarkM-

Browser-launched Crossfire client now online (select CrossCiv server for Galactic  Milieu)
Free website hosting with PHP, MySQL etc: http://hosting.knotwork.com/
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February 01, 2011, 05:44:10 PM
#84

. . . Hopefully this information won't push up the value of bitcoins too quickly, since I haven't finished buying the ones I want yet . . .

Bitcoin values have shot up since I posted these ideas. I wonder if speculators are betting that ease of buying bitcoins through coinpal is going to result in lots more people trying to buy them. What have I DONE??

I'm taking credit for the jump, whether or not I had anything to do with it Smiley

mndrix
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February 03, 2011, 11:29:06 PM
#85

I finished some more changes, so CoinPal is open to the public again.  I'll try to keep it stocked and open for the next couple days.  Please let me know if you encounter any problems.

If you see the "out of stock" message, try back after 1500 UTC, which is usually when I replenish the server's bitcoins.
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February 04, 2011, 05:21:44 AM
#86

mndrix: a suggestion for you
you should also offer to buy bitcoin in exchange for paypal.
no risk for you, plus way to refill your bitcoin stock.

there has been some talk on #bitcoin-otc about demand for ability to sell bitcoins at a fixed price without having to deal with forex trading on the markets.

Join #bitcoin-market on freenode for real-time market updates.
Join #bitcoin-otc - an over-the-counter trading market. http://bitcoin-otc.com
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My trust rating: http://bitcoin-otc.com/viewratingdetail.php?nick=nanotube
mndrix
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February 04, 2011, 03:25:47 PM
#87

mndrix: a suggestion for you
you should also offer to buy bitcoin in exchange for paypal.
no risk for you, plus way to refill your bitcoin stock.

Thanks for the suggestion.  I'm definitely interested in implementing a service along those lines. It'd be a perfect complement to CoinPal.

Incidentally, all this anti-fraud effort on CoinPal has reminded me how important Bitcoin is.  I can't imagine how many thousands of hours of productive effort is currently wasted on fraud prevention for credit card and PayPal payments.
mndrix
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February 07, 2011, 03:15:13 PM
#88

The server ran out of coins on Sunday, but I've restocked now.  I'll try to keep it stocked all week.  I'm away from the computer on Sundays and since anti-fraud changes are still in early testing, I'm hesitant to carry large inventories when I'm away. Hopefully this restriction will only last a couple more weeks.
mndrix
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February 12, 2011, 03:17:42 AM
#89

I just fixed a bug on CoinPal which caused some customers to see an error about a "malformed email address" during PayPal checkout. If you got this message, you might have better luck now.
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February 12, 2011, 10:36:49 AM
#90

Hi, i'm just placed my first order on your website, and also have a suggestion on the API:

Could you please make a field with description (like, Order ID), and hit (from your server) a shop URL with the customer's chosen details (I understand not everyone is willing to share their email) and that ID, to make automated purchases possible?

Oh, wait, I could (and should) issue new BC address for every transaction. That would fix it.
But I'll post it anyway, in case somebody has the same idea...
mndrix
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February 12, 2011, 01:53:56 PM
#91

Oh, wait, I could (and should) issue new BC address for every transaction.

This is one of my favorite Bitcoin tricks.  I'll update the API page to mention it since others may have the same use case.  Thanks for the suggestion and the purchase.
mndrix
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February 14, 2011, 03:15:01 PM
#92

Once again I kept Bitcoin inventory low on Sunday when I was away.  The server has plenty more Bitcoins now.  If you were unable to place an order this weekend, you can place one now.
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February 14, 2011, 07:27:58 PM
#93

Once again I kept Bitcoin inventory low on Sunday when I was away.  The server has plenty more Bitcoins now.  If you were unable to place an order this weekend, you can place one now.

I ordered 40 btc 4 hours ago and nothing so far.....

CENTRA

            ▄▄▄██████████▄▄▄
        ▄▄████████████████████▄▄
      ▄███████▀▀         ▀▀███████▄
    ▄█████▀                  ▀██████
   █████▀      ▄▄▄█████▄▄      ▀█████▄
  █████     ▄██████████████▄     ▀████▄
 █████     ██████▀▀  ▀▀██████▄    ▀████
▐████     █████          █████     █████
█████    ▐████                     ▐████
█████    █████                     ▐████
█████     █████          ▄████▌    █████
 ████▌    ▀█████▄▄    ▄▄█████▀    ▄████▌
 ▀████▄     ▀██████████████▀     ▄████▀
  ▀█████▄     `▀████████▀▀     ▄█████▀
   `██████▄                  ▄██████
     ▀███████▄▄          ▄▄███████▀
       ▀██████████████████████▀
           ▀▀▀█████████████▀▀

.
.
.
.
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February 14, 2011, 07:30:06 PM
#94

Once again I kept Bitcoin inventory low on Sunday when I was away.  The server has plenty more Bitcoins now.  If you were unable to place an order this weekend, you can place one now.

I ordered 40 btc 4 hours ago and nothing so far.....

You can check if transaction was done, putting your receiving address here :
http://blockexplorer.com


If you don't own the private keys, you don't own the coins.
mndrix
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February 14, 2011, 08:49:16 PM
#95

I ordered 40 btc 4 hours ago and nothing so far.....

Responded with details by PM
mndrix
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February 14, 2011, 09:55:17 PM
#96

I just spent 20 minutes on the phone with PayPal's anti-fraud department.  They were fully aware what Bitcoin is and essentially, they're fine with CoinPal operating as long as I keep fraud levels low.  They're OK with me increasing the purchase limits if I ever feel comfortable doing so.  Overall, the tone of the conversation was very positive.  They offered suggestions for reporting fraud to them and for lowering my PayPal fees.

They requested that I not explicitly show the PayPal fees during the order process.  To comply, I'll change that during the next couple days.
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February 14, 2011, 10:15:08 PM
#97

By the way, I have made very good experiences with Paypal lately as well. Their customer service was immaculate.

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February 14, 2011, 11:12:10 PM
#98

mndrix: a suggestion for you
you should also offer to buy bitcoin in exchange for paypal.
no risk for you, plus way to refill your bitcoin stock.

Thanks for the suggestion.  I'm definitely interested in implementing a service along those lines. It'd be a perfect complement to CoinPal.
I sure hope you do it. I've been trying to figure out how I can withdraw money to my country if I sold them through mtgox. After registering an account there and at Liberty Reserve and then realizing I would need at least one more middle man, I gave up. I would sell them noticeably lower than market price to you if I could get the money directly to my PP account. Because you run this as a business it would also be a lot easier to trust you, so I would have no problems sending the Bitcoins before receiving the money.
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February 14, 2011, 11:30:56 PM
#99

Just used your service for my first purchase of bitcoins. Despite having my order manually reviewed and having to go through some additional steps the entire order was resolved in around 10 to 15 minutes and went very smoothly. Great service will certainly use your service again in the future. Wish you continued success!
mndrix
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February 14, 2011, 11:32:13 PM
#100

mndrix: a suggestion for you
you should also offer to buy bitcoin in exchange for paypal.
no risk for you, plus way to refill your bitcoin stock.

Thanks for the suggestion.  I'm definitely interested in implementing a service along those lines. It'd be a perfect complement to CoinPal.
I sure hope you do it.

I started coding this a few days ago, but the current surge in Bitcoin interest has kept me really busy with CoinPal orders.  I'll continue working on the project this week, as time permits.
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February 16, 2011, 04:54:04 AM
#101

I just tried CoinPal for my first non-faucet bitcoins, and I can confirm it worked well, and very speedily (if you have a verified Paypal account). Thanks very much for setting up this service, mndrix. I hope it works out for you.

I have one major security complaint about the service, which I think you could easily fix: Once I have typed my Bitcoin address in on the first screen, it is never displayed back to me. For starters, this means I have no way to verify that the account I have typed (which I am paying real money for) is actually an account under my control.

There is a real security problem here: a man in the middle could intercept my initial request and have the funds redirected to his account, without me being able to before purchase. First, there is no SSL (HTTPS) connection, so a man in the middle attack is possible. While using SSL would help, certificates are expensive and I'm not saying you need to get one. Just that in its absence, we have to assume someone is able to view and modify the HTTP traffic as it goes between my browser and ndrix.com. Now consider this scenario:

1. At http://coinpal.ndrix.com/, I enter my email address, amount and Bitcoin address.
2. A hacker intercepts the HTTP request, and modifies the bitcoin_address field to contain his address instead of mine. He leaves my email address and BTC amount as they are, and forwards the modified request on to ndrix.com.
3. On your server, this creates a new unique ID "534fxxxx", with my email address, my requested amount, and the hacker's Bitcoin address.
4. I am redirected to http://coinpal.ndrix.com/confirm/534fxxxx, which displays the requested number of BTC and conversion rate. I click "Continue" and am redirected to http://coinpal.ndrix.com/email_verify_instructions.
4. On your server, this creates another new unique ID "285xxxx" (I'm not sure what the second unique ID is, but neither contain my Bitcoin address).
5. I receive an email titled "CoinPal email verification (order 534fxxxx)" telling me to click the link "http://coinpal.ndrix.com/continue_order/2855xxxx". It contains both of the unique IDs for this transaction, but no Bitcoin address.
6. I click through to http://coinpal.ndrix.com/continue_order/2855xxxx, which tells me the number of BTC I am about to purchase and how much it will cost. I click "Buy Now".
7. I am redirected to Paypal (now on a secure connection) and asked to log in to Paypal. My order summary includes the number of BTC I am buying and the cost in USD. It also includes the first unique ID, "Item number: 534fxxxx". Nowhere does it say which Bitcoin address the funds are going to. I log in to Paypal and click "Pay now". The funds are removed from my Paypal account.
8. After the order is confirmed, CoinPal credits the hacker's Bitcoin account!.

(Note: This did not happen to me, it is just a hypothetical scenario. Ironically, the post-payment email I received did include my Bitcoin account.)

So there is a common theme here: The bitcoin address is never displayed throughout the process. Were it displayed, I could check in the final step that I am indeed transferring bitcoin to an account under my control. The address should be displayed in all of the following places:

The email and the Paypal description are the critical ones. For either the confirm or continue_order pages on your site, the hacker could keep up his spoofing, and relay back to me the address I entered, even though on the server it is planning to send the coin to his address. Therefore, these two pages should simply display the address, and not prompt the user to verify it (as it is untrustworthy). However, it will be much harder for the hacker to spoof the email (if he does, you will send one too, and I'll know something is up), and impossible to spoof the Paypal description, given that it is under heavy SSL. Therefore, both the email AND the Paypal description should not only display the Bitcoin address, but actively encourage the user to verify that this is the same address he requested. When I am about to click "Pay now", I should be able to do a final check.

I would be (and was) wary of using this system without the address at least appearing in the Paypal item description.

Some further feedback:
  • There is nowhere on the site that says that I am paying in US dollars, until I get through to Paypal. You should prefix all the "$" signs with "US".
  • The confirmation email contains the text "If you did not place an order with CoinPal, it's likely that your PayPal and email accounts have been hacked. Check PayPal for unauthorized transactions and change passwords promptly." I don't follow this logic. Anybody who knows my email address could have typed it into the order page and caused me to receive that email. It isn't a security risk, as it wasn't triggered from my Paypal account. There should be no problem unless I actually go through with it. So the message should read "If you did not place an order with CoinPal, you should ignore this email." (Unless there is some other cause for alarm?)
  • I am a bit confused as to why the transaction has two separate IDs. What is the purpose of having both the 534fxxxx and the 2855xxxx IDs?

I hope you can use this feedback to improve this great service.
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February 16, 2011, 05:05:04 AM
#102

<shameless plug>
If you only need a few BTC I am selling them on my website with no email verification or convenience fees.
</shameless plug>

1NEEFwHjXDhbLZ2RxM6qSDnNDByNZYCSKf

LVBX is down indefinitely, so use CoinPal. Sorry.
mndrix
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February 16, 2011, 03:14:40 PM
#103

So there is a common theme here: The bitcoin address is never displayed throughout the process. Were it displayed, I could check in the final step that I am indeed transferring bitcoin to an account under my control.

Thanks for the detailed feedback.  I'll see about showing the Bitcoin address on the PayPal checkout page.  I agree that it's useful information to see there.


Quote
There is nowhere on the site that says that I am paying in US dollars, until I get through to Paypal. You should prefix all the "$" signs with "US".

Good point.  I'll change this shortly.

Quote
The confirmation email contains the text "If you did not place an order with CoinPal, it's likely that your PayPal and email accounts have been hacked. Check PayPal for unauthorized transactions and change passwords promptly." I don't follow this logic. Anybody who knows my email address could have typed it into the order page and caused me to receive that email. It isn't a security risk, as it wasn't triggered from my Paypal account. There should be no problem unless I actually go through with it. So the message should read "If you did not place an order with CoinPal, you should ignore this email." (Unless there is some other cause for alarm?)

Past experience shows that someone unexpectedly receiving a verification email almost certainly has her PayPal account stolen.  This particular wording has caught two fraudulent transactions so far.  Considering those benefits, I'll probably leave the wording as is.

Quote
I am a bit confused as to why the transaction has two separate IDs. What is the purpose of having both the 534fxxxx and the 2855xxxx IDs?

If both URLs have the same ID, an attacker wouldn't need to receive the verification email since he could just copy and paste the first ID into the second URL.  This email verification step has stopped a couple more fraudulent transactions.

Thanks again for the excellent feedback.
mndrix
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February 16, 2011, 05:45:28 PM
#104

I just fixed a bug which caused some first time customers to be told they had exceeded their weekly purchase limit even though they had never placed an order before.  Sorry for the trouble.
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February 16, 2011, 06:12:05 PM
#105

I just did a purchase.  I have noscript running under firefox and I had to allow your site or receive a cross site scripting error.  

My coins were deposited quickly (3 mins).  After 25 mins I had 5/unconfirmed.

After 30 mins it was 7/confirmed.

Thanks!

mndrix
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February 16, 2011, 07:07:11 PM
#106

I just did a purchase.  I have noscript running under firefox and I had to allow your site or receive a cross site scripting error.  

I'll look into it.  Thanks for the report.

Quote
Thanks!

You're welcome
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February 17, 2011, 12:23:27 AM
#107

Quote
The confirmation email contains the text "If you did not place an order with CoinPal, it's likely that your PayPal and email accounts have been hacked. Check PayPal for unauthorized transactions and change passwords promptly." I don't follow this logic. Anybody who knows my email address could have typed it into the order page and caused me to receive that email. It isn't a security risk, as it wasn't triggered from my Paypal account. There should be no problem unless I actually go through with it. So the message should read "If you did not place an order with CoinPal, you should ignore this email." (Unless there is some other cause for alarm?)

Past experience shows that someone unexpectedly receiving a verification email almost certainly has her PayPal account stolen.  This particular wording has caught two fraudulent transactions so far.  Considering those benefits, I'll probably leave the wording as is.


Wow. Could you publish a fraud statistics at some point?

I have been told by security people at two large banks that the fraud percent for Visa is as high as 7.5-9%, do you get roughly the same numbers?
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February 17, 2011, 12:58:53 AM
#108

Past experience shows that someone unexpectedly receiving a verification email almost certainly has her PayPal account stolen.  This particular wording has caught two fraudulent transactions so far.  Considering those benefits, I'll probably leave the wording as is.
Fair enough. I guess there's no incentive to send it to someone else's email address anyway. I suppose the attack vector here is if you have compromised someone's PayPal, you need to request an email for their address, and then perhaps (somehow) read the email as it comes through -- maybe you have also compromised their Gmail or are MITMing them at a coffee shop.

If both URLs have the same ID, an attacker wouldn't need to receive the verification email since he could just copy and paste the first ID into the second URL.  This email verification step has stopped a couple more fraudulent transactions.
Of course! Silly of me not to realise that earlier.

Thanks again for the excellent feedback.
No problem. Yours seems to be the only automated service doing this (for small transactions). I think it's a valuable service so I want to make sure I can trust it (from a security point of view). You seem to have considered a lot of things.
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February 17, 2011, 03:35:33 AM
#109

Would there be a benefit to use two factor authentication such as sending an sms to the account holders phone with a login code ?

Someone might hack your  email but it would be unusual if they also stole your phone....

o
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February 17, 2011, 05:44:45 AM
#110

Note that they would have to simultaneously break into both your email and Paypal account. Just receiving the confirmation email doesn't let you steal money, because they can't log into your Paypal to complete the transaction.

There are thousands of online sellers who use Paypal, via an email confirmation. Selling Bitcoins is no different than selling anything else. It's perfectly secure the way it is (email and Paypal verification) without requiring a mobile phone confirmation. (Except for the man-in-the-middle problem I outlined above.)
mndrix
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February 17, 2011, 03:20:59 PM
#111

Wow. Could you publish a fraud statistics at some point?

I have been told by security people at two large banks that the fraud percent for Visa is as high as 7.5-9%, do you get roughly the same numbers?

So far the fraud rate is about 4%.  However, the first sale is only 47 days old, so there are still 133 days before I know for sure if that payment was good.  That long time lag is the most troublesome part of accepting PayPal payments.

And people complain about waiting 30 minutes for a few confirmation blocks  Wink
mndrix
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February 17, 2011, 03:26:22 PM
#112

Would there be a benefit to use two factor authentication such as sending an sms to the account holders phone with a login code ?

Someone might hack your  email but it would be unusual if they also stole your phone....

I think it would help.  On risky orders, I manually send SMS verifications or call the customer on the phone.  That's caught a couple fraudulent transactions.  I have code in place to do automated phone verifications for risky orders, but haven't yet decided whether it's worth the cost, so I do them manually for now.
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February 19, 2011, 01:22:11 AM
#113

Great -- I just bought some more and I can confirm that CoinPal now displays the receiving address in the PayPal confirmation screen. Thanks, mndrix. That puts all of my security concerns to rest.
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February 19, 2011, 01:34:33 AM
#114

Wow. Could you publish a fraud statistics at some point?

I have been told by security people at two large banks that the fraud percent for Visa is as high as 7.5-9%, do you get roughly the same numbers?

So far the fraud rate is about 4%.  However, the first sale is only 47 days old, so there are still 133 days before I know for sure if that payment was good.  That long time lag is the most troublesome part of accepting PayPal payments.

And people complain about waiting 30 minutes for a few confirmation blocks  Wink

If you can only accept Paypal transactions as "Mass payment", they are not reversable.
And fee is only $1 max. But Paypal account must be funded, no credit card transaction allowed.


If you don't own the private keys, you don't own the coins.
mndrix
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February 21, 2011, 03:01:14 PM
#115

If you can only accept Paypal transactions as "Mass payment", they are not reversable.
And fee is only $1 max. But Paypal account must be funded, no credit card transaction allowed.

Thanks for the suggestion.  I've considered MassPay as a way of reducing the PayPal fees and shortening my chargeback risk timeline (from 180 days for credit cards to 45 days for PayPal).  Can you provide a link to PayPal documentation about MassPay not being reversible?  I've heard that before, but never found an official statement about it.  I suspect it's not true because scammers would then just use Mass Pay to transfer funds from stolen accounts to freshly-minted PayPal accounts where they could spend the money at their liesure.
mndrix
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February 21, 2011, 03:03:46 PM
#116

Over the weekend, someone discovered a clever timing attack to circumvent the volume limits.  For the next couple days, while I patch the vulnerability, only beta testers can purchase coins.  I've also restocked the server's coin inventory, so beta testers who couldn't get coins yesterday can get them now.

I'll post to this thread once the site is open to the public again
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February 21, 2011, 03:14:10 PM
#117

If you can only accept Paypal transactions as "Mass payment", they are not reversable.
And fee is only $1 max. But Paypal account must be funded, no credit card transaction allowed.

Thanks for the suggestion.  I've considered MassPay as a way of reducing the PayPal fees and shortening my chargeback risk timeline (from 180 days for credit cards to 45 days for PayPal).  Can you provide a link to PayPal documentation about MassPay not being reversible?  I've heard that before, but never found an official statement about it.  I suspect it's not true because scammers would then just use Mass Pay to transfer funds from stolen accounts to freshly-minted PayPal accounts where they could spend the money at their liesure.

You are absolutely right, there is no such official statement.
Only more difficult to open a dispute, but no protection on stolen accounts.

If you don't own the private keys, you don't own the coins.
mndrix
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February 22, 2011, 05:27:04 PM
#118

I've fixed the timing attack weakness, so the service is open to the public again.
mndrix
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February 25, 2011, 06:03:43 PM
#119

The CoinPal "opposite" service (called CoinCard) is now available.  It lets you sell Bitcoins for automatic PayPal payments.  The fee is 3% for payments under $50 and $1 + 1% for payments $50 or higher.
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February 25, 2011, 09:16:30 PM
#120

Today I bought my first Bitcoins and I got them through CoinPal. Just to say that the purchasing process was quite simple and despite the need to verify my transaction, I received my Bitcoins within an hour. Based upon my first experience, I can completely recommend CoinPal.
 Grin

Faith is believing what you know isnít true. For example, Global Warming.
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February 26, 2011, 10:34:37 AM
#121

This is just a heads up that CoinPal might be broken at the moment. I just tried to place an order and PayPal told me that there was a problem with the sellers email address that meant the transaction could not be processed.

Given mndrixs performance so far I'm sure this will be resolved shortly.
mndrix
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February 26, 2011, 02:21:45 PM
#122

This is just a heads up that CoinPal might be broken at the moment. I just tried to place an order and PayPal told me that there was a problem with the sellers email address that meant the transaction could not be processed.

Given mndrixs performance so far I'm sure this will be resolved shortly.

This problem should be resolved now.  [mike], thanks for the report.

For other users who may encounter this problem: this particular error intermittently affects only a few individual orders and for various reasons I've chosen to resolve the problem manually.  If you encounter the error, PM me your PayPal email address and I'll take care of the problem as soon as I can.  Sorry the inconvenience of the manual process.
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February 26, 2011, 03:52:03 PM
#123

Yes, the problem is fully resolved. It's a shame PayPal seems to be flaky but as expected mndrix provided exemplary customer service. He even added me to the beta testers list!

CoinPal is great and I look forward to doing business with Hendrix Solutions a lot more in future.
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February 27, 2011, 07:44:52 AM
#124

This is just a heads up that CoinPal might be broken at the moment. I just tried to place an order and PayPal told me that there was a problem with the sellers email address that meant the transaction could not be processed.

Given mndrixs performance so far I'm sure this will be resolved shortly.

This problem should be resolved now.  [mike], thanks for the report.

For other users who may encounter this problem: this particular error intermittently affects only a few individual orders and for various reasons I've chosen to resolve the problem manually.  If you encounter the error, PM me your PayPal email address and I'll take care of the problem as soon as I can.  Sorry the inconvenience of the manual process.

I just ran into the same problem about 90 minutes ago.  i tried using the link i received in email a while later, and got a message that my order had expired.  Upon attempt to re-order i received a message that i exceeded my weekly limit...

?help

thank you

-tom

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February 28, 2011, 12:28:37 AM
#125

Great service, I've used it several times already. Today was my first large purchase of 40 BTC. Is the weekly limitation of 40 BTC still enforced?

mndrix
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February 28, 2011, 04:13:10 PM
#126

Great service, I've used it several times already. Today was my first large purchase of 40 BTC. Is the weekly limitation of 40 BTC still enforced?

Thanks.  Yes, the 40 BTC limit is still enforced.  Once I have a better handle on fraud levels, I plan to increase the limit for returning customers.  It may be another month before that happens though.
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March 01, 2011, 01:09:47 AM
#127

I'm now getting an invalid bitcoin address message. I've not seen this before.
mndrix
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March 01, 2011, 01:42:08 AM
#128

I'm now getting an invalid bitcoin address message. I've not seen this before.

The bitcoin daemon on my server crashed causing the BTC address verification to fail.  I've restarted the daemon and test orders appear to be working fine.
mndrix
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March 01, 2011, 12:12:24 PM
#129

The bitcoin daemon hung again.  CoinPal is closed until I can figure out what's going on
mndrix
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March 02, 2011, 02:52:02 PM
#130

CoinPal is open again.

I wasn't able to pinpoint the bitcoind problem, but I did upgrade to 0.3.20.01, so we'll see if that fixes it.
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March 07, 2011, 01:56:00 AM
#131

Good work on CoinCard. I have been wondering for awhile how to get coins out of the Bitcoin system without doing a mass trade on MtGox. I just wrote up a blog post about CoinCard (but I haven't yet tried it myself).

The Domino's "proof of concept" was a good idea. Any idea whether Domino's gift cards work outside the United States? (Actually, given that last week I went to a Domino's store with one of their own vouchers and they told me it was invalid and I had to pay full price, I'm unlikely to try CoinCard on them. But I might try the PayPal approach.)
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March 07, 2011, 02:20:31 AM
#132

The Domino's "proof of concept" was a good idea. Any idea whether Domino's gift cards work outside the United States?

They are US only, excluding Hawaii and Alaska.
mndrix
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March 07, 2011, 02:42:35 PM
#133

Good work on CoinCard. I have been wondering for awhile how to get coins out of the Bitcoin system without doing a mass trade on MtGox. I just wrote up a blog post about CoinCard (but I haven't yet tried it myself).

Thanks for the write-up.  doublec's response is spot on about Domino's gift card validity.

For anyone who tried to buy coins through CoinPal yesterday, I've restocked my inventory.  I added a bunch more coins on Saturday night, but it still wasn't enough to see us through Sunday's purchases.
mndrix
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March 08, 2011, 05:09:55 PM
#134

PayPal approved me for one of their merchant rates.  I've passed the full savings through to buyers by decreasing CoinPal fees 0.4 percentage points.

I've also finished some analysis on past fraud rates and patterns.  As a result, I've increased purchase limits for customers 14 and 45 days after their first successful order.  This is a calculated risk and I may reverse this decision as more data comes in.  You can read details about the new limits.
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March 09, 2011, 01:18:26 AM
#135

PayPal approved me for one of their merchant rates.  I've passed the full savings through to buyers by decreasing CoinPal fees 0.4 percentage points.

I've also finished some analysis on past fraud rates and patterns.  As a result, I've increased purchase limits for customers 14 and 45 days after their first successful order.  This is a calculated risk and I may reverse this decision as more data comes in.  You can read details about the new limits.


Good deal! You can count on my orders increasing by around 0.4%   Grin
mndrix
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March 09, 2011, 06:16:46 PM
#136

CoinPal was down for a couple hours while I upgraded the server.  It's back now
mndrix
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March 23, 2011, 01:40:32 PM
#137

bitcoind crashed last night.  I've restarted it and the site is taking orders again.  If you placed an order before the crash and didn't get your coins, hang tight.  I'll send them shortly.  Sorry for the trouble
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March 24, 2011, 05:49:33 PM
#138

Did you get a core dump? It might be useful. There must be a memory corruption or race in there. Maybe time t break out Valgrind.
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March 24, 2011, 07:34:19 PM
#139

Did you get a core dump? It might be useful. There must be a memory corruption or race in there. Maybe time t break out Valgrind.

Not sure it'd be wise to post bitcoin coredumps online publicly, as it seems likely there might be private keys in them. This may not be obvious to everyone.
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March 24, 2011, 08:51:36 PM
#140

Sorry, I should have said "hung" rather than "crashed".  The daemon process was still alive and the debug log showed it was still involved in peer exchange, but it wouldn't respond to RPC calls.  This has happened enough, I'll post what I know in the developer channel.
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March 24, 2011, 09:11:21 PM
#141

Did you get a core dump? It might be useful. There must be a memory corruption or race in there. Maybe time t break out Valgrind.

Unfortunately c3f140033c531e9c5eae920c16fe2ecc80faa1a2 in bitcoin.git catches SIGSEGV, which means no more core dumps :/

Jeff Garzik, bitcoin core dev team and BitPay engineer; opinions are my own, not my employer.
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March 25, 2011, 07:09:55 PM
#142

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.
mndrix
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March 29, 2011, 03:59:46 PM
#143

PayPal reduced my fees again.  I'm passing on those savings, so customers should save about $0.10 in fees on a typical order.  This is probably the last fee reduction PayPal will give me for a while.  I'm still considering ways to reduce the 3% fee that I keep for myself.  Unfortunately, fraud rates have eaten most of that 3% so far.  Hopefully as I improve fraud detection mechanisms, I'll be able to do it.

I've also recalculated the fee range that I show on the Prices page.  Because of PayPal's fixed $0.30 processing fee per order, it's possible for some small orders paid with non-US PayPal accounts to reach  a 10% effective fee.

I'm planning to sell Bitcoins for Dwolla starting sometime this summer.  The fees will be substantially lower since they only charge $0.25 per transaction.  Of course, this will only help US customers.
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March 29, 2011, 04:03:49 PM
#144

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.
This is great!  For newcomers to the OTC web of trust, would it be possible to earn a few trust points through repeated purchasing?  I know I've used CoinPal relatively often since its inception, so as my initial purchases pass the maximum time for chargebacks that ought to be worth a point or two, no?

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
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March 29, 2011, 04:12:25 PM
#145

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.
This is great!  For newcomers to the OTC web of trust, would it be possible to earn a few trust points through repeated purchasing?  I know I've used CoinPal relatively often since its inception, so as my initial purchases pass the maximum time for chargebacks that ought to be worth a point or two, no?

Definitely.  Eventually, this will be automated.  Until then, link your GPG account to your CoinPal account (as mentioned above).  Then PM me on IRC asking that I rate you for CoinPal orders
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March 29, 2011, 04:17:46 PM
#146

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.
This is great!  For newcomers to the OTC web of trust, would it be possible to earn a few trust points through repeated purchasing?  I know I've used CoinPal relatively often since its inception, so as my initial purchases pass the maximum time for chargebacks that ought to be worth a point or two, no?

Definitely.  Eventually, this will be automated.  Until then, link your GPG account to your CoinPal account (as mentioned above).  Then PM me on IRC asking that I rate you for CoinPal orders
Cool, will do.

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
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March 31, 2011, 02:36:30 PM
#147

I had another wave of fraudulent orders last night.  CoinPal is down for maintenance until I can make some more anti-fraud adjustments.  Hopefully I'll be able to reopen later tonight.

CoinCard is still operating as normal
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March 31, 2011, 06:22:01 PM
#148

I had another wave of fraudulent orders last night.  CoinPal is down for maintenance until I can make some more anti-fraud adjustments.  Hopefully I'll be able to reopen later tonight.

Ugh. That stinks. How bad was it?

Remember my idea about using a physical letter to a physical address? All you need is to hook into a service like L-Mail and send the buyer a verification code to their mailing address, and you can have strong proof that the account isn't stolen.

I also think you should automate your SMS verification so you can run that before a new buyer places their first order.

mndrix
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March 31, 2011, 07:53:42 PM
#149

Ugh. That stinks. How bad was it?

I probably won't know the full extent for another couple weeks.  It's bad enough that I need to make some reasonable changes, but not bad enough to quit yet Smiley

Quote
Remember my idea about using a physical letter to a physical address? All you need is to hook into a service like L-Mail and send the buyer a verification code to their mailing address, and you can have strong proof that the account isn't stolen.

I also think you should automate your SMS verification so you can run that before a new buyer places their first order.

Thank you for the ongoing suggestions. I've been testing both of these techniques for the last couple months.  I don't yet have enough data to expand them to all purchases yet.
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March 31, 2011, 09:35:42 PM
#150

Anyone still looking to buy bitcoin with Paypal while mndrix's service is down can use my service: http://bitcoinmorpheus.tumblr.com/

I'm selling Mt. Gox USD and Bitcoin for cash, check or money order in the mail: http://bitcoinmorpheus.tumblr.com/

Check out my 100% decentralized P2P exchange: https://github.com/macourtney/Dark-Exchange
mndrix
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March 31, 2011, 11:16:59 PM
#151

I wasn't able to finish all the changes today.  I'll try and reopen the site for trusted buyers (those with a purchase limit over 40 BTC per week) tomorrow morning.  Until then, I can vouch for morpheus' service.  I've purchased from him before with excellent results.
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April 01, 2011, 01:57:26 AM
#152

mndrix, in my opinion your service is vital to the expansion of this community. I recently come back to Bitcoins after about a year out of touch and only stayed here because I was able to purchase some Bitcoins via CoinPal. I am sure morpheus' service is a viable option, but instantanious transactions is what today's public is expecting

One idea I had was - you could limit number of transactions/time period. I know you already have 40/a day, but I think it should be more restrictive. The amount could stay the same but lets say you only do 40/week/person. This would limit the damage in case of fraud while still allowing legit users to get their initial 40 Bitcoins and participate in the community, playing bitlotto or whatever. With time restriction could be lifted
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April 01, 2011, 02:06:08 AM
#153

Isn't the limit already 40 BTC per week, not per day?
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April 01, 2011, 02:10:27 AM
#154

yes, just checked. my mistake.

maybe it should be 40/2 weeks then
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April 01, 2011, 02:31:45 AM
#155

Last time I checked, most of PayPal's internal fraud detection took place within the hour after the transaction. And while they send an email in the case of such a suspicious transaction, I don't recall whether anything comes across the API. In any case, if it came down to it, I'd be willing to wait an hour versus not having the service at all.

15UFyv6kfWgq83Pp3yhXPr8rknv9m6581W
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April 01, 2011, 03:05:47 AM
#156

Thank you all for the suggestions and comments.  I agree that near-instant Bitcoin sales help the community.  I'm not sure I'd be working on Bitcoin if the old Bitcoin Gateway hadn't been open the night I read Satoshi's paper.  I'll do what I can to keep the site open.

The current plan is to reduce the purchase limit for first-time buyers back to approximately $20 (essentially what mewantsbitcoins suggested).  That was the limit when I started, but Bitcoin appreciation has pushed it closer to $40 recently.  I'll also be changing the purchase limits for returning customers based on the chargebacks I've seen.  There will also be some behind-the-scenes changes which I can't describe in detail.

error, PayPal does report chargebacks through their API.  I'll keep the 1 hour window in mind. Thanks.

I also plan to enhance integration with the #bitcoin-otc web of trust, for those who want to participate.  I think the WOT makes many exciting Bitcoin projects possible.  If it were strong already, my work at CoinPal would be much easier Smiley
mndrix
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April 01, 2011, 03:07:06 PM
#157

CoinPal is open again for trusted customers.  If you bought Bitcoins from the site more than 7 days ago, you fall into that category.  Of course, beta testers and those with OTC ratings are trusted as well.  I'm still planning to reopen to the public later today.
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April 01, 2011, 03:26:38 PM
#158

Being able to quickly and easily buy bitcoins is essential to their success, but the seller in such an enterprise is a HUGE fraud magnet.

Here's some other ideas:
 - Transfer the coins in installments, i.e. 10% of your order per hour
 - Bigger fees for first-time buyers
 - Add donation addresses to your forum post signatures and web pages so we can help support this essential service
 - Consider everyone a scammer until proven otherwise!

On Jan 7th, after some prodding by email, mndrix gave me this donation address, which I assume is still valid: 15VmbbyvpZQk7P4Vs7EvzYrGbtKTnW1f27

Obviously don't send anything there until he confirms it.

mndrix
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April 01, 2011, 10:03:55 PM
#159

CoinPal is open to the public again.  The donation address dacoinminster presented is correct.  I've put it in my signature in case others are inclined that way.

The only publicly visible change is that new customers can purchase only 20 BTC their first week.  After the first week, it goes up to 40 BTC.  After that, the old purchase limits apply.
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April 09, 2011, 07:04:15 PM
#160

- Bigger fees for first-time buyers
 - Consider everyone a scammer until proven otherwise!
These are a bit problematic for a service supposed to be an easy entry point for newcomers.

The donation address dacoinminster presented is correct.
I don't mean to imply dacoinminster is untrustworthy, but it's good practice to quote such things for preservation.

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April 11, 2011, 03:50:27 PM
#161

PayPal has placed a 5% reserve requirement on my account.  For each PayPal payment I receive, they hold 5% of the payment for 90 days.  This is a standard precaution for sellers of high-risk goods.  I'm a little surprised they didn't institute the requirement immediately after my initial discussions with them.  It reflects no dissatisfaction on PayPal's behalf.  They're just being cautious.  However, it is one more reason I'd love to see Bitcoin succeed Smiley

In the long-run, the reserve requirement shouldn't affect anyone but me.  It only translates to a $500 higher reserve than I had calculated for my own personal risk threshold.
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April 11, 2011, 03:53:04 PM
#162

ooo interesting, mndrix. Smiley

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April 12, 2011, 03:38:27 AM
#163

Hi there,

Forgive me ignorance as I'm new to the world of Bitcoin and CoinPal, but I have very recently purchased 12 Bitcoins, and was wondering how long it takes for them to appear in my Bitcoin account? Or have I missed something, it's definitely possible.

Thanks.
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April 12, 2011, 03:46:44 AM
#164

Hi there,

Forgive me ignorance as I'm new to the world of Bitcoin and CoinPal, but I have very recently purchased 12 Bitcoins, and was wondering how long it takes for them to appear in my Bitcoin account? Or have I missed something, it's definitely possible.

Thanks.

There is no bitcoin account. Anyway, it takes about 10 minutes for a transaction to be confirmed.

IF there's no bitcoin that appears in your client, you probably didn't complete the download of blocks.

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April 12, 2011, 03:51:44 AM
#165

Okey dokey. Well I meant that Bitcoin thing on my computer. It turns out I've been selected for a manual review by CoinPal. Thanks for the prompt reply though, this is all new territory for me, all this talk of blocks makes me think of Tetris...definitely need to do a little more research on all this.
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April 12, 2011, 08:11:27 AM
#166

@mndrix : How come I cant sell more than 82 BTC in your site mate ? it always display "insufficient fund in your account... blah blah"
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April 12, 2011, 09:44:37 AM
#167

@mndrix : How come I cant sell more than 82 BTC in your site mate ? it always display "insufficient fund in your account... blah blah"
He doesn't have enough $$ on his PayPal balance. Check back in a day or so and he'll probably have it.

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April 12, 2011, 12:42:27 PM
#168

@mndrix : How come I cant sell more than 82 BTC in your site mate ? it always display "insufficient fund in your account... blah blah"
He doesn't have enough $$ on his PayPal balance. Check back in a day or so and he'll probably have it.

Thx mate  Cheesy
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April 12, 2011, 02:13:28 PM
#169

Hi,

Is there anywhere particularly good or useful that I can read the basics of what is going on? I just paid for 12 Bitcoins from CoinPal and my Bitcoin address had mysteriously changed again, with my coins being sent to my old address...are they lost to the void now and have I lost my money? Why would the address change if there were no transactions taking place? Or do they do it randomly when generating coins as well? Sorry having some probably quite simple and silly complications here.

Thanks.
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April 12, 2011, 02:15:54 PM
#170

Is there anywhere particularly good or useful that I can read the basics of what is going on? I just paid for 12 Bitcoins from CoinPal and my Bitcoin address had mysteriously changed again, with my coins being sent to my old address...are they lost to the void now and have I lost my money? Why would the address change if there were no transactions taking place? Or do they do it randomly when generating coins as well? Sorry having some probably quite simple and silly complications here.

The GUI client will periodically present you with a new address, I think after a transaction is received at the one that was displayed before.  None of this matters though, because your client never discards secret keys.  In other words, as long as you have not lost your wallet, you will always be able to use coins that arrive at any address your client has ever created for itself.

Tips are always welcome and can be sent to 1CZ8QgBWZSV3nLLqRk2BD3B4qDbpWAEDCZ

Thanks to ye, we have the final piece.

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April 12, 2011, 02:17:26 PM
#171

EDIT:  Already answered by cdhowie while I was typing.  Oh well, posting anyway.

The client likes to make new addresses for you automatically.  I think it's supposed to happen only after you receive coins on a certain address (to encourage you to only use each address once) though I could swear it sometimes makes new ones just for the heck of it, lol.

Rest assured, as long as the address appears in your Address Book, it is valid and you will be able to accept coins on it as many times as you wish.  However, it is probably best to get into the habit of using each address only once, and clearly labeling each one so you know exactly where the coins came from.
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April 12, 2011, 02:23:50 PM
#172

Hey guys,

Many thanks for the very prompt replies. Yeah I think my address did just change for the hell of it, as the only previous transaction was my free 0.05 Bitcoins, and I've already had 3 different addresses. But my coins have come through now, think I'm new to the system and it takes a little while to get up to speed when you first start using it. Will definitely do some more reading around though.

Cheers.  Cool
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April 13, 2011, 10:01:54 AM
#173

Is there a problem with the site? I've been trying to use it and I keep getting the "invalid bitcoin address" message with several different addresses.
Looks like there is indeed a problem. I have used it successfully twice before, but now I get this message too.

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April 13, 2011, 02:17:43 PM
#174

bitcoind hung last night causing the errors you observed.  It's restarted now and orders are coming through again.  On Friday, I'll try and upgrade my bitcoind to a version with the deadlock patch to prevent this from happening again.
mndrix
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April 15, 2011, 08:54:12 PM
#175

Based on some calculations of the discount rate of credit card scammers, I've increased the purchase limits for returning customers more rapidly than I was doing before.  I've also added a slight purchase limit increase for customers three days after their first purchase.  This 3-day increase is experimental and I may remove it on short notice.

For OTC users who have linked their GPG key to CoinPal, I've increased the purchase limits further still.  You'll now get more credit for positive ratings and being well-connected in the web of trust.

I've also upgraded bitcoind to a nightly build that includes the deadlock fix.  Hopefully, the service can now operate uninterrupted.

As always, I welcome feedback.
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April 17, 2011, 06:36:53 PM
#176

Getting error when putting my Bitcoin address in.
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April 18, 2011, 01:27:21 AM
#177

Same, getting error when putting my receive address in.

tips: 1KY4hsybyqpTdxy8nSXh3KUKRi8jeGH8Jx
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April 18, 2011, 06:38:08 AM
#178

I get the same error, just postin to confirm other 2 posters' claims
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April 18, 2011, 01:09:56 PM
#179

yeah I tried 4 different addresses but it still says its wrong.
hope you can fix it  Smiley
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April 18, 2011, 02:06:13 PM
#180

Same, getting error when putting my receive address in.

I've restarted some server components and the site appears to be working fine now.  I'll investigate the failures later this morning.  Thanks for the reports.
mndrix
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April 18, 2011, 07:32:22 PM
#181

I've reduced fees for repeat customers by .5 percentage points.  This reflects my reduced costs for servicing such customers.  First-time buyers still pay approximately the same as they did before.
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April 18, 2011, 08:05:01 PM
#182

bitcoin address was accepted, thanks


e - just received, thanks
grue
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April 18, 2011, 08:10:08 PM
#183

I've reduced fees for repeat customers by .5 percentage points.  This reflects my reduced costs for servicing such customers.  First-time buyers still pay approximately the same as they did before.
repeat customer = same email, correct?

It is pitch black. You are likely to be eaten by a grue.

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April 18, 2011, 09:28:41 PM
#184

repeat customer = same email, correct?

Yes, that's right.
mndrix
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April 18, 2011, 09:37:20 PM
#185

I have to concentrate on some big projects that are coming up (not related to Bitcoin) and won't be able to devote much time to the forum for the next several months.  I'll still manage CoinPal as I have over the last few months.  I'll try to check in on this thread about once a week, usually on Fridays.  If you notice problems with CoinPal, please contact me at coinpal@ndrix.com so that I can fix them right away.
mndrix
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April 18, 2011, 10:20:45 PM
#186

For customers who have linked their PGP key to their CoinPal account, OTC ratings are now automatic.  Within an hour of linking your account, your OTC rating will be updated.  As you place new, successful orders, your rating will be updated if justified.  Likewise, chargebacks are automatically reported through negative ratings.

If CoinPal has already rated you for past trades, new trades may not give you a higher rating immediately.  The ratings are based on PayPal payment age and volume.  This is essentially the same formula I was using when rating OTC users manually.

Thanks to nanotube for making the automated ratings possible.
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April 20, 2011, 03:32:03 AM
#187

I have to concentrate on some big projects that are coming up (not related to Bitcoin) and won't be able to devote much time to the forum for the next several months.  I'll still manage CoinPal as I have over the last few months.  I'll try to check in on this thread about once a week, usually on Fridays.  If you notice problems with CoinPal, please contact me at coinpal@ndrix.com so that I can fix them right away.
Good luck with those projects. I hope managing CoinPal/CoinCard will include improvements to their automation, robustness, prices and limits.

Have you considered making an automated service for selling MoneyPak for bitcoins? These can't be chargebacked, right? If it's possible, it should really help with maintaining cash for CoinCard while obviating your need to buy MoneyPak on the forum.

For customers who have linked their PGP key to their CoinPal account, OTC ratings are now automatic.  Within an hour of linking your account, your OTC rating will be updated.  As you place new, successful orders, your rating will be updated if justified.  Likewise, chargebacks are automatically reported through negative ratings.
I'm confused about the "Order ID" part of linking PGP. Does it need to be the order ID of any one of my orders, the first one, all of them?

1EofoZNBhWQ3kxfKnvWkhtMns4AivZArhr   |   Who am I?   |   bitcoin-otc WoT
Bitcoil - Exchange bitcoins for ILS (thread)   |   Israel Bitcoin community homepage (thread)
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April 20, 2011, 02:35:20 PM
#188

Have you considered making an automated service for selling MoneyPak for bitcoins? These can't be chargebacked, right? If it's possible, it should really help with maintaining cash for CoinCard while obviating your need to buy MoneyPak on the forum.

I have considered something similar.  I may pursue it further once my schedule lightens up.

Quote
For customers who have linked their PGP key to their CoinPal account, OTC ratings are now automatic.  Within an hour of linking your account, your OTC rating will be updated.  As you place new, successful orders, your rating will be updated if justified.  Likewise, chargebacks are automatically reported through negative ratings.
I'm confused about the "Order ID" part of linking PGP. Does it need to be the order ID of any one of my orders, the first one, all of them?

Any order ID will work.  I'll try to clarify the instructions.  Thanks for the feedback.
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April 21, 2011, 01:34:15 AM
#189

@mndrix here's a driveby idea:  What about offering bitcoin subscriptions?  It would stabilise exchange rates during the inflationary period, reduce risk, and you could create an open futures market to fill them Smiley

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
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April 21, 2011, 11:33:21 AM
#190

@mndrix here's a driveby idea:  What about offering bitcoin subscriptions?  It would stabilise exchange rates during the inflationary period, reduce risk, and you could create an open futures market to fill them Smiley

Basically you could subscribe with paypal and automatically get coins sent each month or week ?
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April 21, 2011, 06:08:42 PM
#191

@mndrix here's a driveby idea:  What about offering bitcoin subscriptions?  It would stabilise exchange rates during the inflationary period, reduce risk, and you could create an open futures market to fill them Smiley

Basically you could subscribe with paypal and automatically get coins sent each month or week ?
Yup.

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
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April 22, 2011, 09:28:28 PM
#192

What about offering bitcoin subscriptions?

That's an interesting idea.  I'll consider it.
mndrix
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April 22, 2011, 09:37:28 PM
#193

Some CoinPal orders from first-time buyers are now verified with an automated phone call.  These orders were previously reviewed manually which required buyers to wait 2-48 hours for my attention.  The new system completes these orders immediately after verifying their phone number.  It should be a more pleasant experience for everyone Smiley

The phone number used is the one on your PayPal account.  The language used on the automated phone recording is one of 30 possible languages.  It's chosen based on your browser's Accept-Language header.

Some orders will still be reviewed manually.  Overall, I think this new approach provides more accurate order screening.  Hopefully it can help reduce fraud rates and labor costs so that I can further reduce CoinPal fees.
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April 23, 2011, 12:01:15 AM
#194

Heh, and Bitcoin once again forces me to check to see which phone numbers I have on file with various places.  The first time was when I was first buying Bitcoins through Bitcoin Gateway but realized my bank had my parents' home phone number on file instead of my own.  Wouldn't be surprised if I did that for PayPal too.
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April 23, 2011, 08:53:27 AM
#195

That's excellent. You really are doing a superb job mndrix.
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April 25, 2011, 06:06:33 AM
#196

That's excellent. You really are doing a superb job mndrix.
+1

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
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0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
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April 29, 2011, 04:47:43 PM
#197

I've been out sick for the last couple days and am just now catching up on emails.  I may continue to be slower than usual responding to emails over the coming few days.  Just so you know, I'm not ignoring you all on purpose Smiley
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April 30, 2011, 05:22:50 AM
#198

Welcome back. I hope you're feeling alright now.

mndrix
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April 30, 2011, 06:11:27 PM
#199

Because of recent Bitcoin appreciation and to keep fraud losses manageable, I've reduced the purchase limit for first time customers to 10 BTC.  All other purchase limits remain the same.

I may have to drop that limit to 5 BTC, if current prices and past fraud conditions remain constant.
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April 30, 2011, 08:32:21 PM
#200

ETA on when the site will be back up?
mndrix
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April 30, 2011, 10:25:16 PM
#201

ETA on when the site will be back up?

Funny that you should ask.  PayPal just froze my accounts.  I'll post more details shortly.
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April 30, 2011, 10:33:20 PM
#202

ETA on when the site will be back up?

Funny that you should ask.  PayPal just froze my accounts.  I'll post more details shortly.

That's not good, I hope it comes back up soon Sad.  I've enjoyed using your service as a fast way to cash out my BitCoins to pay for new hardware.
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April 30, 2011, 10:49:18 PM
#203


PayPal has frozen my account so CoinPal won't continue as we know it.  My funds (only about $5k) are tied up there for the next 180 days.  Read the huge wall of text below for all the details Smiley

History and details about the freeze

When I started coding CoinPal back in December 2010, I emailed compliance@paypal.com asking for permission to sell Bitcoins using PayPal.  I also emailed aupviolations@paypal.com seeking clarification on whether selling Bitcoins met their definition of "currency exchange".  After about two weeks, I received no response to either email. I decided to start operating the site, thinking they wanted to see something working before spending time on a response.

After operating for two months, PayPal's anti-fraud department called me to discuss some earlier chargebacks.  We spoke for 20 minutes and PayPal told me it was fine to sell Bitcoins as long as I kept chargebacks low.  Two months after that, PayPal placed a 5% reserve on my account.  I spoke with the high-risk goods department on the phone a few days later.  They were fine with me continuing business as long as I had a reserve on the account to cover any chargebacks that might arise.

Today PayPal called to say they were freezing my account because they consider Bitcoins an "ecurrency".  I told them that they had given me permission on two separate occasions to sell Bitcoins.  They responded, "that department isn't authorized to make those decisions."  The official statement in my account says "This limitation cannot be appealed."

During the entire time I operated CoinPal, my fraud rate was 1.5%  That includes the first wave of fraud when I was still learning how the scammers operated.  If that first weekend is excluded, my fraud rate was 0.9%  I obviously honored my end of the arrangement.

CoinPal was a success

During the four months that CoinPal operated, it helped introduce Bitcoin to 1,484 people by distributing 60,858 BTC (not counting MoneyPak trades).  It also helped 76 people bootstrap their OTC ratings.

My personal view is that PayPal freezing my account is a coming of age for Bitcoin.  Previous PayPal account freezes in the Bitcoin community were related to chargeback volume.  That was obviously not the problem here.  Someone inside PayPal specifically decided that Bitcoin was a big enough risk that it should be prohibited.  I see no greater compliment to a Hydra than cutting off one of her heads Smiley

CoinPal's future

I'm not entirely sure what CoinPal's future will be.  I have a nice long train ride from Denver to San Francisco next week (on my way to Google IO) which should give me plenty of time to consider.

I've thought of selling Bitcoins for Dwolla, but it sounds like Mt Gox has that under control.  I'd consider selling/donating the CoinPal source code but PayPal will certainly shutdown any official sucessor now that they've decided that Bitcoins are "ecurrency".  The fraud detection code is probably the most valuable component.  Perhaps I can leverage that in some way to help Bitcoin succeed.  I can't open source the anti-fraud code since most anti-fraud measures are "security through obscurity".  Of course, I'm open to any suggestions on CoinPal's future.

CoinCard will be easier to bring back, minus PayPal payments.  It only needs a debit card number to operate.  A possible PayPal freeze was one reason I focused on "gift cards" rather than PayPal exclusively.

This whole situation has reminded me once again why distributed, resilient systems like Bitcoin and OTC are so important.
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April 30, 2011, 10:55:53 PM
#204

That sucks. Good luck with your future endeavors and all the shiny new toys they'll give you at Google IO.

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April 30, 2011, 10:59:00 PM
#205

Damn PayPal! Sad
Now how im going to get my money i dont know. I sadly need paypal for now.
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April 30, 2011, 10:59:19 PM
#206

Well damn, really sorry to hear that.  Thanks again for your hard work.  
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April 30, 2011, 11:00:45 PM
#207

What a bunch of cunts!

What if this community decided to put their paypal accounts where their mouth is and gave you their own account to operate coinpal with. Is it even feasible? If so, how many frozen paypal accounts do you think it would take for them to reverse the policy?
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April 30, 2011, 11:06:16 PM
#208


I also heard from Bitcoin Morpheus that PayPal has shut him down from receiving PayPal Payments.  He is tied up on another unrelated project this weekend and won't have much time to get back to people about this until Sunday night or Monday, but he'll provide an update on his service then.

--Darrell


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April 30, 2011, 11:11:27 PM
#209

Anyone know an easy, still alive, service like this one to change bitcoins for paypal?
Im afraid of getting stuck now with my bitcoins, since the only way for me to get money at this time is this PayPal crap =/
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April 30, 2011, 11:12:29 PM
#210

Ah darn. What frustrating news! I definitely really liked this service.

Anyway, please check your coincard email, mndrix. I sent you 50 BTC for an order I made right before your site went down for maintenance. I now see why I haven't received the paypal funds.
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April 30, 2011, 11:21:59 PM
#211

Anyone know an easy, still alive, service like this one to change bitcoins for paypal?
Im afraid of getting stuck now with my bitcoins, since the only way for me to get money at this time is this PayPal crap =/

At this point, I'm guessing your best bet would be Bitcoin-OTC, which can be relatively low-key and fly under Paypal's radar.
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April 30, 2011, 11:30:32 PM
#212

How about AlertPay?
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April 30, 2011, 11:35:42 PM
#213

I don't know if this is possible, but could you replace the Paypal client with one that transfers to major Credit/Debit cards instead? There would be more trust involved here, but I know that wouldn't shy me away.
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April 30, 2011, 11:41:33 PM
#214

How about AlertPay?

Actually this might be a great idea. Also I think there's also some services that change alertpay money for paypal
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April 30, 2011, 11:43:26 PM
#215

Maybe you could try a payment processor like Plimus or 2Checkout as a "middleman" between you and Paypal?

Like my post(s)? 12TSXLa5Tu6ag4PNYCwKKSiZsaSCpAjzpu Smiley
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I just can't wait for fall/winter. My furnace never generated money for me before. I'll keep mining until my furnace is more profitable.
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April 30, 2011, 11:46:23 PM
#216

Transferring to eWallets like Neteller would be good as well, but I haven't looked on their terms to see if they accept this kind of transfers.

For foreign users, it would be great to withdraw the funds at the ATM using Neteller's prepaid Master Card.
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April 30, 2011, 11:51:27 PM
#217

I don't know if this is possible, but could you replace the Paypal client with one that transfers to major Credit/Debit cards instead? There would be more trust involved here, but I know that wouldn't shy me away.

For a while, Bitcoin Gateway exchanged Bitcoins for debit/credit card funds, and that's actually how I got my first coins.  The problem is that credit cards (and debit to a lesser extent) also have the same chargeback/fraud issues that PayPal has.  The only reason Bitcoin Gateway was able to work is because the guy manually called up the bank to make sure it was actually your card, and then called you personally to confirm the order, using the phone number on file with the bank.  It was a lot of manual labor and because of that, it couldn't scale to the size that CoinPal/CoinCard reached.
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May 01, 2011, 12:01:22 AM
#218

I don't know if this is possible, but could you replace the Paypal client with one that transfers to major Credit/Debit cards instead? There would be more trust involved here, but I know that wouldn't shy me away.

For a while, Bitcoin Gateway exchanged Bitcoins for debit/credit card funds, and that's actually how I got my first coins.  The problem is that credit cards (and debit to a lesser extent) also have the same chargeback/fraud issues that PayPal has.  The only reason Bitcoin Gateway was able to work is because the guy manually called up the bank to make sure it was actually your card, and then called you personally to confirm the order, using the phone number on file with the bank.  It was a lot of manual labor and because of that, it couldn't scale to the size that CoinPal/CoinCard reached.

I see. I do love how CoinCard is just a simple click of the mouse.
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May 01, 2011, 12:19:02 AM
#219

Wow this is really unfortunate. I just used coin card this morning and thought it was a great service and was easy to use.

Smiley  : 1LbvSEJwtQZKLSQQVYxQJes8YneQk2yhE3
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May 01, 2011, 12:21:17 AM
#220

No way with such a low fraud rate that PayPal just suddenly decided to cut you off. I'll bet good bitcoins that somebody (i.e. the admins at overclock.net) tipped them off.

15UFyv6kfWgq83Pp3yhXPr8rknv9m6581W
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May 01, 2011, 12:29:06 AM
#221

No way with such a low fraud rate that PayPal just suddenly decided to cut you off. I'll bet good bitcoins that somebody (i.e. the admins at overclock.net) tipped them off.

I basically live by OCN, but I know those mods, and if one of them tipped PayPal off I'm gonna be really mad. There was a huge thread about it with like 3000 replies on OCN.

EDIT: Yea it just go closed, http://www.overclock.net/other-software/1001123-earn-your-gpu-bitcoin-mining-guide-165.html
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May 01, 2011, 12:33:03 AM
#222

No way with such a low fraud rate that PayPal just suddenly decided to cut you off. I'll bet good bitcoins that somebody (i.e. the admins at overclock.net) tipped them off.

I basically live by OCN, but I know those mods, and if one of them tipped PayPal off I'm gonna be really mad. There was a huge thread about it with like 3000 replies on OCN.

EDIT: Yea it just go closed, http://www.overclock.net/other-software/1001123-earn-your-gpu-bitcoin-mining-guide-165.html

It was huge because of the incredibly large number of trolls and naysayers. I was hardly expecting the staff to be trolls and naysayers themselves.

15UFyv6kfWgq83Pp3yhXPr8rknv9m6581W
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May 01, 2011, 12:36:01 AM
#223

Well, with every major forum comes trolls, and trolls there are on OCN.

I don't really blame the nay-sayers though, who would believe that you can sell bitcoins and acquire them by doing basically nothing?
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May 01, 2011, 12:48:30 AM
#224

PayPal, owned by eBay, is in the middle of their third class-action for defrauding customers and freezing accounts.

Regardless of whether or not the department that gave you permission to trade BitCoins was authorized to, you have their permission.  In commerce law, this is referred to as "principal and agent".  The agent (say a teller at a bank) is understood to represent the principal (the bank manager) and vice-versa.  If they misrepresent, it's the bank that must keep its word to you - not you that must be inconvenienced by the bank.  Same goes here.

As for "This limitation cannot be appealed", they mean within PayPal's internal faux-court.  In PayPal's EULA, there is a proviso which requires you to agree that, in the event of a dispute with PayPal, you agree to forfeit your access to a real court and must instead seek remedy exclusively through a hearing comprised of PayPal staff.  In 1992 a real court ruled that PayPal couldn't include that proviso, because it fraudulently convinced Paypal users that they had no access to real courts as a result.  Last I checked a few months ago, the proviso was still in PayPal's EULA despite the court ruling.

You have a strong case, and PayPal has left itself wide open in its flagrantly abusive practices.  You might come out of this financially ahead given punitive damages, and what's more a lawsuit against PayPal would be effective material for a press release.  News coverage would certainly be free advertising, and in this case such a venture would actually make it advertising that paid you instead.

Submitted for your consideration.  Be well.

The Wolfpack Project: BitCoin + Crowdfunding = Political Accountability
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May 01, 2011, 12:56:25 AM
#225

I basically live by OCN, but I know those mods, and if one of them tipped PayPal off I'm gonna be really mad. There was a huge thread about it with like 3000 replies on OCN.
What would OCN tell Paypal that would make them shut down CoinPal? Bitcoins are goods traded by users for money and other services, so I don't see what Paypal can really do about this business. I'm don't know a lot about how the financial world works, but Bitcoins aren't "an actual currency", just virtual points that people buy/sell for real money.

PayPal, owned by eBay, is in the middle of their third class-action for defrauding customers and freezing accounts.

Regardless of whether or not the department that gave you permission to trade BitCoins was authorized to, you have their permission.  In commerce law, this is referred to as "principal and agent".  The agent (say a teller at a bank) is understood to represent the principal (the bank manager) and vice-versa.  If they misrepresent, it's the bank that must keep its word to you - not you that must be inconvenienced by the bank.  Same goes here.

As for "This limitation cannot be appealed", they mean within PayPal's internal faux-court.  In PayPal's EULA, there is a proviso which requires you to agree that, in the event of a dispute with PayPal, you agree to forfeit your access to a real court and must instead seek remedy exclusively through a hearing comprised of PayPal staff.  In 1992 a real court ruled that PayPal couldn't include that proviso, because it fraudulently convinced Paypal users that they had no access to real courts as a result.  Last I checked a few months ago, the proviso was still in PayPal's EULA despite the court ruling.

You have a strong case, and PayPal has left itself wide open in its flagrantly abusive practices.  You might come out of this financially ahead given punitive damages, and what's more a lawsuit against PayPal would be effective material for a press release.  News coverage would certainly be free advertising, and in this case such a venture would actually make it advertising that paid you instead.

Submitted for your consideration.  Be well.

This might be the greatest post I've ever read.
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May 01, 2011, 12:59:09 AM
#226

A solution would be to create a website, perhaps in Drupal, that would automatically purchase BitCoins from users who wanted to sell.  Users would log in, put their BitCoins up for sale, and the site would draw from a credit line to purchase them at current valuation.  Thus you could put cash in at one end, and accumulate a trickle of BitCoins as they came out of your site.  Your site could then also sell them to users by accepting credit card orders.  This would stimulate BitCoin usage by allowing users entry into the economy.  A minor transaction fee would probably be in order, to cover the hosting costs and credit card processing fees.

People would essentially be buying and selling with your site itself, and unlike a person it would be constantly available and always-on.

[EDIT: I recently compiled a comparison list of the top online credit card payment processing gateways, which you may find useful.]

Be well.

The Wolfpack Project: BitCoin + Crowdfunding = Political Accountability
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May 01, 2011, 01:01:21 AM
#227

Oh man, I just started getting into this. Coincard is by far the simplest, easiest and safest way that i've searched for to convert to paypal USD. It's so damn easy. I depend on you guys so much for BTC -> Paypal!!!


I dont know what/where to go now..
this sucks =(
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May 01, 2011, 01:02:09 AM
#228

PayPal, owned by eBay, is in the middle of their third class-action for defrauding customers and freezing accounts.

Regardless of whether or not the department that gave you permission to trade BitCoins was authorized to, you have their permission.  In commerce law, this is referred to as "principal and agent".  The agent (say a teller at a bank) is understood to represent the principal (the bank manager) and vice-versa.  If they misrepresent, it's the bank that must keep its word to you - not you that must be inconvenienced by the bank.  Same goes here.

As for "This limitation cannot be appealed", they mean within PayPal's internal faux-court.  In PayPal's EULA, there is a proviso which requires you to agree that, in the event of a dispute with PayPal, you agree to forfeit your access to a real court and must instead seek remedy exclusively through a hearing comprised of PayPal staff.  In 1992 a real court ruled that PayPal couldn't include that proviso, because it fraudulently convinced Paypal users that they had no access to real courts as a result.  Last I checked a few months ago, the proviso was still in PayPal's EULA despite the court ruling.

You have a strong case, and PayPal has left itself wide open in its flagrantly abusive practices.  You might come out of this financially ahead given punitive damages, and what's more a lawsuit against PayPal would be effective material for a press release.  News coverage would certainly be free advertising, and in this case such a venture would actually make it advertising that paid you instead.

Submitted for your consideration.  Be well.

This is VERY VERY interesting information. Ill be waiting for ndrix to respond, hopefully soon.
Also press free advertising would easily help bitcoin to spread out to the world Smiley
frycicle
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May 01, 2011, 01:05:29 AM
#229

Try Amazon Payments. It is almost the same as Paypal nad most people have Amazon accounts.

Buy Newegg Products with Bitcoin with 0% transaction fee! bitcoinredemption.com
RTJakarta
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May 01, 2011, 01:22:29 AM
#230

Just reason number #9,001 why PayPal is an awful establishment. Ugh. They've had an account of mine frozen for about 6 months now.

Which wouldn't be that bad if I didn't have a few thousand in my account. Idiots.  Undecided
Satori
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May 01, 2011, 01:42:10 AM
#231

No way with such a low fraud rate that PayPal just suddenly decided to cut you off. I'll bet good bitcoins that somebody (i.e. the admins at overclock.net) tipped them off.

Actually, PayPal does this with its merchants systematically.

The frozen funds all get pooled, and PayPal earns interest off the cash while the funds remain frozen.  So they have a certain motivation to freeze accounts, then require their users to justify their existence with all sorts of paperwork they never mentioned upon sign-up.  For instance, a utility bill that must be in your name.  Not all of us have that.

In short, they're not happy until you're not happy.

The primary reason people use them as the standard is because they heard about PayPal through the mainstream media outlets.  Those media outlets are essentially owned by the same few megacorporations, so what they hype vias the media determines what the majority of people use - until people can discover a better alternative.  Thus sites like Facebook and Google, both the bastard offspring of C.I.A.-based investment firm In-Q-Tel, have become what the mainstream use.  Never mind that they work closely with the Information Awareness Office, which actively compiles data on users and tries to keep it all cross-referenced in its own databases for easy domestic snooping of citizens.  It's the federal government's approach to using commercial entities to get around the Fourth Amendment safeguard against unreasonable search and seizure, with a fair amount of tycooning and market manipulation thrown in for good measure.

Well, I say "good" measure...   Roll Eyes

The Wolfpack Project: BitCoin + Crowdfunding = Political Accountability
demonofelru
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May 01, 2011, 01:45:27 AM
#232

No way with such a low fraud rate that PayPal just suddenly decided to cut you off. I'll bet good bitcoins that somebody (i.e. the admins at overclock.net) tipped them off.

Actually, PayPal does this with its merchants systematically.

The frozen funds all get pooled, and PayPal earns interest off the cash while the funds remain frozen.  So they have a certain motivation to freeze accounts, then require their users to justify their existence with all sorts of paperwork they never mentioned upon sign-up.  For instance, a utility bill that must be in your name.  Not all of us have that.

In short, they're not happy until you're not happy.

The primary reason people use them as the standard is because they heard about PayPal through the mainstream media outlets.  Those are essentially owned by the same few megacorporations, so what they hype determines what the majority of people use - until they can hear of a better alternative.  Thus sites like Facebook and Google, both the bastard offspring of C.I.A.-based investment firm In-Q-Tel, have become what the mainstream use.  Never mind that they work closely with the Information Awareness Office, which actively compiles data on users and tries to keep it all cross-referenced in its own databases for easy domestic snooping of citizens.  It's the federal government's approach to using commercial entities to get around the Fourth Amendment safeguard against unreasonable search and seizure, with a fair amount of tycooning and market manipulation thrown in for good measure.

Well, I say "good" measure...   Roll Eyes

QFT! That's why I don't use I'm out big money because a buyer said I shipped them a broken computer they shipped me back random pieces of wood.

Names do not matter; however, if you insist...id...
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May 01, 2011, 01:49:51 AM
#233

Just reason number #9,001 why PayPal is an awful establishment. Ugh. They've had an account of mine frozen for about 6 months now.

Which wouldn't be that bad if I didn't have a few thousand in my account. Idiots.  Undecided

PayPal was founded with such noble intentions.  It's a shame such assclowns are now in charge.

I have a feeling it will only get harder and harder to purchase/sell Bitcoins, the fees will rise as the risk level rises, and they drown the currency.  I am more committed than ever to make this work, though.  This mean WAR!
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May 01, 2011, 01:52:20 AM
#234

No way with such a low fraud rate that PayPal just suddenly decided to cut you off. I'll bet good bitcoins that somebody (i.e. the admins at overclock.net) tipped them off.

Actually, PayPal does this with its merchants systematically.

The frozen funds all get pooled, and PayPal earns interest off the cash while the funds remain frozen.  So they have a certain motivation to freeze accounts, then require their users to justify their existence with all sorts of paperwork they never mentioned upon sign-up.  For instance, a utility bill that must be in your name.  Not all of us have that.

Exactly. God. Then I'm sure when I have utilities in my name, I'll be asked to scan copy of my 4th grade report card...
Anonymous
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May 01, 2011, 02:10:54 AM
#235

They are scared. It means we are winning.

I hope it goes well for you mndrix.

tomcollins
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May 01, 2011, 02:13:10 AM
#236

They are scared. It means we are winning.

I hope it goes well for you mndrix.



It depends what they are scared of.  They have to avoid government scrutiny as well, and they have a lot on the line to lose if they piss off the government.  So it's not *entirely* their fault they suck.
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May 01, 2011, 02:22:39 AM
#237

mmmmm what about using some system like, Payoneer instead of paypal?

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kiba
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May 01, 2011, 02:24:19 AM
#238

Bitcoin is not the natural enemy of Paypal.

They just decide to be assholes a long time ago and end up making lot of enemies.

Satori
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May 01, 2011, 02:29:14 AM
#239


The frozen funds all get pooled, and PayPal earns interest off the cash while the funds remain frozen.  So they have a certain motivation to freeze accounts, then require their users to justify their existence with all sorts of paperwork they never mentioned upon sign-up.  For instance, a utility bill that must be in your name.  Not all of us have that.


Here's a thought.  What about a site which accepted credit card payments from users who sought to purchase BitCoins, and then bought BitCoins when other users sold them to the site?  It could then transfer its BitCoins to users who'd already paid, on a first-come, first-served basis.

You'd be enabling people to acquire BitCoins with cash.  You'd be earning interest off the cash in the meantime.  The availability of BitCoins would help the system thrive.  The steady demand for BitCoins would make them even more valuable, and cause an increase in their valuation.  BitCoins at once become more accessible to people, and yet also worth more.

You'd have legitimate interest earned off the funds, much as PayPal does but in this case legitimately, to fund the server costs and credit card processing.  The site would be providing quite a service to the BitCoin community, and potentially gleaning interest above costs, without having to charge users for the convenience.

The Wolfpack Project: BitCoin + Crowdfunding = Political Accountability
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May 01, 2011, 02:38:39 AM
#240

Today PayPal called to say they were freezing my account because they consider Bitcoins an "ecurrency".  I told them that they had given me permission on two separate occasions to sell Bitcoins.  They responded, "that department isn't authorized to make those decisions."  The official statement in my account says "This limitation cannot be appealed."

Well, on the bright side, now it's official, bitcoin is a currency.  Next up, Amazon.
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May 01, 2011, 02:39:59 AM
#241

"First they ignore you, then they laugh at you, then they fight you, then you win." - Mahatma Ghandi

Eventually PayPal will support BTC as a currency, just like they support USD or EUR.  Then we win.  Smiley

mewantsbitcoins</