Circle is a Disaster waiting to Happen !!!

[Totscha]

Yeah I'm pretty sure they've considered all of this. After all you do have to login using a one time password via text message. An extra burden for the thief.

This will obviously stop criminals because it is so hard to go to the local kiosk and pay $10 cash for a pre-paid SIM card.

On top of that the CC companies (if they haven't already) will force Circle to use 3D Secure. Sites using 3D Secure CC payments require an additional password to be entered when initiating payment. And 3D Secure is also starting to implement OTPs on top of that. And when using this there's a nice clause in the TOS. Basicaly it's the customers fault for having his CC number and 3D Secure password compromised. Ergo, no chargebacks... I mean, very hard to get one...

I am not familiar with "3D Secure" but I am totally all for any working solution to the problem of "How to use credit cards safely on the Internet".

Yeah it's pretty easy to get a pre-paid SIM. That's why I said 'an extra burden'.

3D Secure: http://en.wikipedia.org/wiki/3-D_Secure

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[jbrnt]

I think credit charge back is going to be a problem. It doesn't mean there is no solution. They are have id and address checks, or place a limit on the first transactions, to minimise their risk of chargebacks. I think Circle is an ambitious project and there will be kinks to sort out along the way.

[blumangroup]

The same could be said about ANY merchant that accepts credit cards.  They pay for chargebacks out of their pocket, and they can abuse their customers' private information at any time.

This is true but the situation is very different. I can visit a website from a proxy or VPN or Tor and give them made-up information and a stolen CC and they are none the wiser. If I go to a webshop and buy a TV then I do need to provide an additional piece of information which is somewhat (but not impossible) harder to "fake": a delivery address. You can use a friend or drug addict or something like that to take delivery so this does not prevent fraud but it does make it harder: You have to tie a real-world location to the transaction.

I believe that using a VPN/Tor with coinbase is almost automatically a red flag to have a purchase get cancelled. I don't believe this is the case with circle and is a major security hole. It is not difficult to tell if someone is using a VPN or not and there is no real reason to use one because they know what your identity "should" be anyway as you give it to them and your bank/cc details

[justusranvier]

Whatever happens to Circle, just remember this:

If you decide to use them to buy bitcoins, always immediately withdraw those bitcoins to a real wallet.

Same thing applies to any other service of this kind.

[ruggedman_dan]

Whatever happens to Circle, just remember this:

If you decide to use them to buy bitcoins, always immediately withdraw those bitcoins to a real wallet.

Same thing applies to any other service of this kind.

Exactly. frank1 got it right too.

They set up circle to operate as a "bitcoin bank." And what do banks do? Play with your money. Once everyone starts using this as a quick buy service and never let their coins sit, Circle will crumble. It will happen gradually. First, the instant buy thing will stop. Then they will start trying to sweeten the pot for people who keep their BTC in Circle wallets. Then, more fees will be introduced. The customer service will begin to suffer.

Watch.

[justusranvier]

frank1 got it right too.

The only disagreement I have with frank1's posts regards the definition of scam.

It's not an immediate, or maybe not even a premeditated, scam.

It's something more subtle: "you can trust us to hold your bitcoins."

Anybody who makes that claim is perpetuating a future scam, whether or not they intend or know this.

[oyvinds]

If you decide to use them to buy bitcoins, always immediately withdraw those bitcoins to a real wallet.

They set up circle to operate as a "bitcoin bank." And what do banks do? Play with your money.

I think some people who do not understand technology will like the idea of a Bitcoin bank. They do not get the idea that you can and should be your own bank.

If you do not have the private key for your Bitcoin then you have no Bitcoin - you do have, at best, a Promise to Pay (an IOU).