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Author Topic: Internal transactions on eWallet provider, such as MyBitcoin  (Read 1928 times)
Stephen Gornick
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January 11, 2011, 11:42:41 PM

With Bitcoin being both pseudonymous and non-reversible (i.e., no chargebacks), there is little evidence to help you make an argument that you've truly sent a payment.  At most, you would be able to show that an amount matching the amount you claim to have sent appears in a certain block (with a timestamp) and that the amount was sent to the Bitcoin address that you claim is where your payment was sent.

However, for transactions made using bitcoins and sent from one account on an eWallet provider to another account on the same provider, that transaction will not appear in the blockchain (i.e., the transaction won't cross the Bitcoin P2P network).

Here's an example.  The Bitcoin address on the "Ways you can help EFF" donation page ( ) appears to be one that is for an account on MyBitcoin.  So if I send bitcoins from my account with MyBitcoin to the EFF's donation address, I cannot then see that transaction using
  (I will see other transactions, but not mine.)

Some eWallet providers allow amounts below 0.01 BTC to be sent if the transaction is to another account holder on the same service. This allows an inexpensive and immediate method to detect if the recipient is using the same eWallet provider.

For example, MyBitcoin will report an error when attempting to send an amount smaller than 0.01 BTC to a Bitcoin address that is not for another MyBitcoin account:
Payment amount is too small for a Bitcoin P2P payment! Try a BC0.01 or higher!

Thus there are two conclusions I make:
  • If you are concerned about being able to have evidence that you truly did send a payment, use Bitcoin with a local wallet to ensure that your transaction crosses the wire.
  • Using an eWallet provider to send money to another account on the same provider may provide even less visibility than sending the transaction from your own wallet.  In my example above, only myself, the EFF and MyBitcoin know that any bitcoins were sent to that Bitcoin address -- my transaction doesn't show externally.
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