"but it is unclear to them how this currency is supported"

[herzmeister]

http://www.betabeat.com/2012/02/13/banking-partners-force-paxum-to-drop-bitcoin-due-to-potential-risk/

Although Bitcoin is not illegal, Paxum’s partners consider the cryptocurrency “high risk,” Paxum explained. “We simply must cease all business with Bitcoin based on our banking partners/Mastercard etc. We don’t have a choice in the matter I’m afraid,” Ruth Blair, a representative for Paxum, told Betabeat via Skype.

“The main fears had to do with the fact that it’s a decentralized currency and as such there isn’t much control over it,” Paxum said in a statement to Betabeat. “In the end, it is converted to a legal tender (generally USD), but it is unclear to them how this currency is supported and who pours actual money into it, and more importantly, why.”

sometimes i don't understand that either 

[Gabi]

So much fail

/facepalm

and as such there isn’t much control over it

Yup, you can't pick up the phone, call the government and "ehi friend, i have some debts, can you print some trillions and bail me out? Bye!"

[old_engineer]

“The main fears had to do with the fact that it’s a decentralized currency and as such there isn’t much control over it,” Paxum said in a statement to Betabeat. “In the end, it is converted to a legal tender (generally USD), but it is unclear to them how this currency is supported and who pours actual money into it, and more importantly, why.”

The trifecta of Fear, Uncertainty, and Doubt at its finest.  Are they intentionally working from the FUD playbook?

I remember these exact same arguments about Linux and other open source software back in the late 90s. "How can you rely on software when you can't call anyone for support?" and other such concerns.  And we all know how well Linux has turned out: in 2011, "Netcraft, which surveyed more than 485 million websites this month, credits Apache with 65.05 percent of Web servers compared to 15.73 percent for Microsoft’s IIS (Internet Information Services)."  source

The software world has become comfortable with decentralized projects, where the project is judged on merits rather than on the pedigree.  The financial world, not so much.

[gewure]

So much fail

/facepalm

and as such there isn’t much control over it

Yup, you can't pick up the phone, call the government and "ehi friend, i have some debts, can you print some trillions and bail me out? Bye!"

they are really either failing hard or doing great work in surpressing bitcoin.

they are afraid, hehe

[herzmeister]

well with tradehill suspending, "we" are afraid as well i'm afraid, hehe 

[M4v3R]

How this ended up in speculation subforum?

[RyNinDaCleM]

Although Bitcoin is not illegal, Paxum’s partners consider the cryptocurrency “high risk,” Paxum explained. “We simply must cease all business with Bitcoin based on our banking partners/Mastercard etc. We don’t have a choice in the matter I’m afraid,” Ruth Blair, a representative for Paxum, told Betabeat via Skype.

“The main fears had to do with the fact that it’s a decentralized currency and as such there isn’t much control over it..."

Someone is scurred of a little competition!  

[stochastic]

How this ended up in speculation subforum?

no moderators

[gewure]

How this ended up in speculation subforum?

Wasn't paxum a way to move money in and out of the exchanges? Seems relevant.

no. he is right, i think.

buying/selling bitcoin via paxum != speculation

[phorensic]

The trifecta of Fear, Uncertainty, and Doubt at its finest.  Are they intentionally working from the FUD playbook?

I remember these exact same arguments about Linux and other open source software back in the late 90s. "How can you rely on software when you can't call anyone for support?" and other such concerns.  And we all know how well Linux has turned out: in 2011, "Netcraft, which surveyed more than 485 million websites this month, credits Apache with 65.05 percent of Web servers compared to 15.73 percent for Microsoft’s IIS (Internet Information Services)."  source

The software world has become comfortable with decentralized projects, where the project is judged on merits rather than on the pedigree.  The financial world, not so much.

I'm going to nitpick on this just a little bit.  Yes, Apache dominates the web server market, however it is also run on Windows Server OS'es.  It's not purely on Linux.  I'm forced to run it in our enterprise environment on Windows, for example.  Still, that doesn't invalidate your point--you have a good point.

Oh, just to throw a tiny side thought onto your point, however.  RedHat dominates the enterprise sector in the Linux world, and yes you can call support for their OS.  In fact I think you must pay licensing fees in order to do that.  On the flip side, I don't think most web servers are running RedHat, I think they are running truly free distributions.  I know, I just muddied up your whole point, sorry!

[Raoul Duke]

Best news on 2012 so far.

Now, how much time until OKPAY* releases a similar statement?

*who has a Matercard debit card that you can incidentally fund with bitcoin

[intersango]

well with tradehill suspending, "we" are afraid as well i'm afraid, hehe  

We have had the same problem with a bank essentially playing politics and in my opinion discriminating against us. We are very lucky to have not found good banks and banking solutions though.

It is understandable that banks at the moment see Bitcoin at high risk due to the exchange history. The reason Intersango.com entered the market was just that. To have an exchange built run and owned by core bitcoin developers. This is why we have never suffered a hack despite being now the 2nd longest running exchange and the 2nd highest volume exchange.

I suspect with time, and more reliable bitcoin exchanges like ours, eventually payment gateways will begin seeing bitcoin businesses as too lucrative to pass up.

That being said, I personally hold some bit of reluctance thinking Paxum's statement may not be representative of the actual reasons for exiting the bitcoin market.

[herzmeister]

How this ended up in speculation subforum?

sry 


actually the whole paxum thing is already well covered in the main discussion forum. I wanted to emphasize the part I quoted and where they wonder where Bitcoin gets its value from, which is ultimately unregulated supply and demand dynamics, i.e. essentially "speculation".

[ineededausername]

It is understandable that banks at the moment see Bitcoin at high risk due to the exchange history. The reason Intersango.com entered the market was just that. To have an exchange built run and owned by core bitcoin developers. This is why we have never suffered a hack despite being now the 2nd longest running exchange and the 2nd highest volume exchange.

That's a ridiculous reason... "magic the gathering online exchange got hacked, and they deal with bitcoins, so you will be hacked too."  It's almost like they think bitcoin causes security holes. 

Of course, we all know the real reason they're suspending accounts everywhere...

[rebuilder]

So, we seem to be seeing the exchange squeeze that's been proposed as a weakness for BTC. It will be interesting to see how this goes.

[coraz]

but it is unclear to them how this currency is supported and who pours actual money into it, and more importantly, why

Meh. To me the bitcoin system is much more clear than, say, United States Dollar. I doubt that anyone who is not an economist fully understands how USD works. Bitcoin is pretty simple in this regard.

[realnowhereman]

Why on Earth should Paxum have to understand Bitcoin anyway?

If I buy a smartphone with paxum does that mean they have to know how to build a smartphone?

Their justification is nonsense.

(Is anyone else willing to bet that bitcoin transactions made up a significant portion of their business?  Does anyone else even accept paxum?)