CoinPal beta - Buying bitcoins with PayPal

[mndrix]

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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[grondilu]

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]

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]

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.

[Anonymous]

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.

[grondilu]

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]

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 .

[goldcoin]

nice service
bad the fees are ...

[mndrix]

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]

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.

[nanaimogold]

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.

[mndrix]

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

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.

[Stephen Gornick]

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

[nanaimogold]

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.

[The Madhatter]

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.

The Madhatter

[mndrix]

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.

[Ricochet]

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]

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.

[srf21c]

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?

[jescro]

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.