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OKCupid starts accepting Bitcoin using Coinbase

189 points by FredEE 13y ago

deleted 13y ago
[deleted]
hkmurakami 13y ago
Do businesses that accept bitoins for payments typically immediately cash it out on exchanges or do they actually carry the "FX" risk? edit: since MtGox only charges a fixed %age fee for transactions, automating a conversion into USD wouldn't cost any more than doing periodic larger transactions (other than the development and maintenance cost of such a system
- deleted 13y ago
  [deleted]
- barmstrong 13y ago
  See "instant exchanges" https://coinbase.com/docs/merchant_tools/payouts https://coinbase.com/docs/merchant_tools/payouts
  - hkmurakami 13y ago
    Thx for the info! It'll be interesting to see how the model and fees develop, as Btc exchanges move from the current x% model to the inevitable x% + $y, $y, or $y/share model.
  - spoiledtechie 13y ago
    Did anyone else read the fees? 1% and 15cents? That's incredible.... Compared to the 2.9% and 30 cents most other payment processors charge. I will be migrating my start up soon!
    - hkmurakami 13y ago
      I think it's just a reflection of the underlying transaction facilitators (CC processors vs Bitcoin exchanges). The CC processors charge the % + fee, and the services that build on top of that tack on their cut. MtGox charges a % cut (I forget what it is, but it's below CC rates by a lot) and so you tack on your cut on top of it to end up with a lower cost than CC processors. I really do feel that MtGox will move to a higher fee schedule as Bitcoin volume increases, so it'll be interesting to see the convergence of Bitcoin fees vs CC/Stripe/Paypal fees and how processors reconcile the two and balance growth (driven by lower cost) vs immediate profits.
      - mahyarm 13y ago
        That might not happen, credit card fees are usually broken down as so: 1. Receiving Bank Fee 2. Sending Bank Fee (most of the charge) 3. Network fee (visa, mastercard, etc) And a good amount of fraud built into those fees. Fees often vary by fraud risk, with internet and telephone charging ~3% and supermarkets getting around %1 already. Debit cards can be flat fee also.
      - codeulike 13y ago
        I think it's just a reflection of the underlying transaction facilitators (CC processors vs Bitcoin exchanges). And thats one of the reasons Satoshi started Bitcoin to begin with - transactions within the traditional money network have become very complex and expensive. One of the aims of bitcoin is more economically efficient transactions: The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non- reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party
      - rmc 13y ago
        As bitcoin volume increase, miners will probably start charging transaction fees themselves. So that'll increase.
    - vidarh 13y ago
      You just wait until they have to take dispute resolution and fraud seriously or face losing business - the fees will increase.
    - makomk 13y ago
      Bear in mind that there are also going to be fees paid by the customer in order to get Bitcoins, unless they're one of the tiny number of people who mine Bitcoins profitably. Those fees are probably going to be enough to bring the total cost close to that of a normal payment processor even with the cheapest options. Also, right now the value of their bitcoins will probably drop by more than 2.9% in the time between them buying the coins and being able to send them.
- mseebach 13y ago
  Generally (I can't speak for the concrete case), when a business accepts payment in different currencies, it's because they intend to hold that currency, typically because they can settle liabilities in that currency. Pure speculation, but this could simply be a case of OKCupid wanting to support the Bitcoin ecosystem by providing a service that can be paid for directly in Bitcoin, thus raising the attractiveness of accepting Bitcoin as payment, further strengthening the system. To do this, they'll probably have to put the long-term net value of their Bitcoin holdings as zero, but they can probably afford that.
  - Evbn 13y ago
    It is far far more likely that they are doing this as a PR/marketing effort: they can get exposure, and new customers who want to spend BTC on something. Not because OKC/Match wante to invest in the BTC system.
- goodside 13y ago
  Right now, we (OkCupid) don't hold assets in BTC. It's converted immediately to USD, in which we denominate the original prices. The BTC price fluctuates with the exchange rate.
- patio11 13y ago
  Do businesses that accept bitoins for payments typically immediately cash it out on exchanges or do they actually carry the "FX" risk? People in the Bitcoin community believe that these options are mutually exclusive, but they're not. If you're doing a dual currency transaction in a period of high volatility, somebody is paying for that exchange risk. It's either the customer, the payment processor, or the merchant, or possibly two of them, but it certainly isn't no-one. There were multiple periods today in which Bitcoin fell more than 10% in 15 minutes. If I were insane enough to sell Bingo Card Creator for Bitcoin, and then gave an elementary schoolteacher a quote for 0.42785714285714285714285714285714 BTC ($29.95 at 70 to the dollar), it's entirely possible that in the five minutes of thinking it took to process everything on the screen, the 0.42785714285714285714285714285714 BTC that I received would be worth only $27.81 at market prices. Hmm, that's funny, I just paid 7.1% in transaction fees before paying the transaction fees. (We're obviously operating in a perverse hypothetical world where elementary schoolteachers would both understand that option, have BTC available to spend, and be happy spending them, and where I would consider actually implementing this.) It's possible that the payment processor I was working with would absorb this risk for me, because they hope to keep my business. That would be an extraordinary dangerous decision for them, because they're now running their merchant payments operation as a sideline to currency speculation. (Which I suppose makes them a perfect fit for the Bitcoin community.)
  - minimax 13y ago
    To play the devil's advocate, I'll point out that anyone selling in multiple currencies has to deal with hedging fx risk. For example, USDJPY has been pretty nuts thus far in April (not BTC nuts, but intraday swings of 1-2%). If you were 1) very determined to sell in BTC and 2) could buy USDBTC options you could probably sell in BTC and limit your exposure to the fx risk.
    - patio11 13y ago
      I'll point out that anyone selling in multiple currencies has to deal with hedging fx risk Yes, and anyone whose business involves juggling chainsaws has to pay an awful lot for workplace insurance, but Bingo Card Creator doesn't involve chainsaws. Bitcoin proponents love to say "No transaction fees! Can your credit card processor do that?" while perhaps forgetting to mention that the actual mechanism for achieving this involves you juggling chainsaws.
untog 13y ago
Fedoras, everywhere
lbarrow 13y ago
This seems like a great idea, since people who are into BitCoin are likely to use online dating services.
- deleted 13y ago
  [deleted]
- jmtame 13y ago
  Honestly, I would be surprised if more than 1% of OkCupid's user base switched to BitCoin. Back in the 90s, the nerds dominated online dating. Same story with the Bulletin Board Systems of the 70s (The Matchmaker) and the punch cards at Stanford in the 60s (Happy Families Planning Services, used on the IBM 650) for the purposes of online dating. Today, it's much more pervasive with 75% of singles in the U.S. having tried online dating. Most of the women I've talked to on OkCupid are not technical, and when I setup a fake account to see what types of messages girls would receive, none of the people who initiated contact were hackers. I still don't think the mainstream understands what BitCoin is, or why it's valuable. They hear things like "anonymous" and then wonder what they'd need that for, not seeing that the earliest users of BitCoin were hobbyists, hackers, and Silk Road members. If anything, hopefully this will push people to become BitCoin users, assuming the sign up process is easy enough and the price difference is enough to make them switch.
  - sneak 13y ago
    Don't overthink the joke.
    - jmtame 13y ago
      I must have missed the sarcasm. Plenty of people mistakenly believe that online dating is still used mainly by nerds. It was true at one point in time. Edit: I find it strange that you deleted your previous comment after you wrote a reply to my comment, which said you've enjoyed using OkCupid for 8 years. That comment was part of what prompted me to respond initially, and why I didn't think it was sarcasm.
thinkcomp 13y ago
Same question as always. Money transmission license?
DigitalSea 13y ago
Until Bitcoin normalises it sadly doesn't matter who accepts it, the currency is experiencing so much instability you're better off buying a prepaid Visa debit card and using that for paying for online dating services. It;s good to see more services accepting the currency but it doesn't change the fact it's a hotbox for hacker attacks, old fashioned bank-running when the price rises and all of the investors it has attracted looking to make a quick buck.
- deleted 13y ago
  [deleted]
rdl 13y ago
I wish there were a simple-as-Stripe way to outsource multiple payment options for customers (BTC, cards, ACH, etc.). I guess technically you could use PayPal or maybe Amazon Payments for that, but I don't think they're particularly likely to support Bitcoin anytime soon.
- jeffasinger 13y ago
  Spreedly comes pretty close to this actually, and they're much more likely to support working with something like CoinBase for BTC soon.
codeulike 13y ago
Wait, since when did OKCupid start charging? They were free when I was on there (before the match.com takeover)
- jmtame 13y ago
  It was after their acquisition by IAC in 2011. Match.com is owned by IAC, so technically it was taken over by IAC. The CEO said multiple times they'd never charge, but plans tend to change after you get acquired.
  - Sidnicious 13y ago
    Paying (for A-List) is entirely optional and gets you extra, nonessential features (like no ads and extra search parameters). It's been around since 2009, long before IAC bought us. Using OkCupid is still, and will stay, free.
    - codeulike 13y ago
      Oh I see. Thanks for correcting
    - jmtame 13y ago
      My mistake. I originally prefaced my comment with "I think" and should have left that in there, because I didn't know for sure. I misread a Mashable article that said OkCupid would never charge in 2011.
- publicfig 13y ago
  They just charge for some extra features, such as anonymously browsing other peoples pages while seeing who visited yours and organizing search results by attractiveness.
Trufa 13y ago
This is interesting, I'm all for bitcoin, but I think if I am meeting someone over the internet, I'd like at least some part of the process to not be anonymous. I know that doesn't necessarily make me safe, but it is one more step.
netcan 13y ago
This is interesting but really more in the cool/cute/novel category than the practical needs one. I'm pretty hopeful and positive about bitcoin but that's one of the things that makes me still very suspicious of it. Seems that the places adopting it are doing so for fun, ideological or theoretical reasons rather than to solve some problem they have. I'm waiting to see online retailers requiring bitcoin payments for high risk transactions (eg sending mobile phones to nairobi). Something that demonstrates it solves a problem and (ideally) enables commerce where it wasn't possible before.
- eric_bullington 13y ago
  There are more large, recognized businesses coming online soon. I'm talking to a start-up right now that is fairly well-known among HNers that is working on setting up Bitcoin payment options (and have asked them if I can share their plans -- waiting for a response).
JosephRedfern 13y ago
The entire blog seems to be 404ing now.

189 points by FredEE 13y ago

deleted 13y ago

[deleted]

Do businesses that accept bitoins for payments typically immediately cash it out on exchanges or do they actually carry the "FX" risk? edit: since MtGox only charges a fixed %age fee for transactions, automating a conversion into USD wouldn't cost any more than doing periodic larger transactions (other than the development and maintenance cost of such a system

deleted 13y ago
[deleted]
barmstrong 13y ago
See "instant exchanges" https://coinbase.com/docs/merchant_tools/payouts https://coinbase.com/docs/merchant_tools/payouts
- hkmurakami 13y ago
  Thx for the info! It'll be interesting to see how the model and fees develop, as Btc exchanges move from the current x% model to the inevitable x% + $y, $y, or $y/share model.
- spoiledtechie 13y ago
  Did anyone else read the fees? 1% and 15cents? That's incredible.... Compared to the 2.9% and 30 cents most other payment processors charge. I will be migrating my start up soon!
  - hkmurakami 13y ago
    I think it's just a reflection of the underlying transaction facilitators (CC processors vs Bitcoin exchanges). The CC processors charge the % + fee, and the services that build on top of that tack on their cut. MtGox charges a % cut (I forget what it is, but it's below CC rates by a lot) and so you tack on your cut on top of it to end up with a lower cost than CC processors. I really do feel that MtGox will move to a higher fee schedule as Bitcoin volume increases, so it'll be interesting to see the convergence of Bitcoin fees vs CC/Stripe/Paypal fees and how processors reconcile the two and balance growth (driven by lower cost) vs immediate profits.
    - mahyarm 13y ago
      That might not happen, credit card fees are usually broken down as so: 1. Receiving Bank Fee 2. Sending Bank Fee (most of the charge) 3. Network fee (visa, mastercard, etc) And a good amount of fraud built into those fees. Fees often vary by fraud risk, with internet and telephone charging ~3% and supermarkets getting around %1 already. Debit cards can be flat fee also.
    - codeulike 13y ago
      I think it's just a reflection of the underlying transaction facilitators (CC processors vs Bitcoin exchanges). And thats one of the reasons Satoshi started Bitcoin to begin with - transactions within the traditional money network have become very complex and expensive. One of the aims of bitcoin is more economically efficient transactions: The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non- reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party
    - rmc 13y ago
      As bitcoin volume increase, miners will probably start charging transaction fees themselves. So that'll increase.
  - vidarh 13y ago
    You just wait until they have to take dispute resolution and fraud seriously or face losing business - the fees will increase.
  - makomk 13y ago
    Bear in mind that there are also going to be fees paid by the customer in order to get Bitcoins, unless they're one of the tiny number of people who mine Bitcoins profitably. Those fees are probably going to be enough to bring the total cost close to that of a normal payment processor even with the cheapest options. Also, right now the value of their bitcoins will probably drop by more than 2.9% in the time between them buying the coins and being able to send them.
mseebach 13y ago
Generally (I can't speak for the concrete case), when a business accepts payment in different currencies, it's because they intend to hold that currency, typically because they can settle liabilities in that currency. Pure speculation, but this could simply be a case of OKCupid wanting to support the Bitcoin ecosystem by providing a service that can be paid for directly in Bitcoin, thus raising the attractiveness of accepting Bitcoin as payment, further strengthening the system. To do this, they'll probably have to put the long-term net value of their Bitcoin holdings as zero, but they can probably afford that.
- Evbn 13y ago
  It is far far more likely that they are doing this as a PR/marketing effort: they can get exposure, and new customers who want to spend BTC on something. Not because OKC/Match wante to invest in the BTC system.
goodside 13y ago
Right now, we (OkCupid) don't hold assets in BTC. It's converted immediately to USD, in which we denominate the original prices. The BTC price fluctuates with the exchange rate.
patio11 13y ago
Do businesses that accept bitoins for payments typically immediately cash it out on exchanges or do they actually carry the "FX" risk? People in the Bitcoin community believe that these options are mutually exclusive, but they're not. If you're doing a dual currency transaction in a period of high volatility, somebody is paying for that exchange risk. It's either the customer, the payment processor, or the merchant, or possibly two of them, but it certainly isn't no-one. There were multiple periods today in which Bitcoin fell more than 10% in 15 minutes. If I were insane enough to sell Bingo Card Creator for Bitcoin, and then gave an elementary schoolteacher a quote for 0.42785714285714285714285714285714 BTC ($29.95 at 70 to the dollar), it's entirely possible that in the five minutes of thinking it took to process everything on the screen, the 0.42785714285714285714285714285714 BTC that I received would be worth only $27.81 at market prices. Hmm, that's funny, I just paid 7.1% in transaction fees before paying the transaction fees. (We're obviously operating in a perverse hypothetical world where elementary schoolteachers would both understand that option, have BTC available to spend, and be happy spending them, and where I would consider actually implementing this.) It's possible that the payment processor I was working with would absorb this risk for me, because they hope to keep my business. That would be an extraordinary dangerous decision for them, because they're now running their merchant payments operation as a sideline to currency speculation. (Which I suppose makes them a perfect fit for the Bitcoin community.)
- minimax 13y ago
  To play the devil's advocate, I'll point out that anyone selling in multiple currencies has to deal with hedging fx risk. For example, USDJPY has been pretty nuts thus far in April (not BTC nuts, but intraday swings of 1-2%). If you were 1) very determined to sell in BTC and 2) could buy USDBTC options you could probably sell in BTC and limit your exposure to the fx risk.
  - patio11 13y ago
    I'll point out that anyone selling in multiple currencies has to deal with hedging fx risk Yes, and anyone whose business involves juggling chainsaws has to pay an awful lot for workplace insurance, but Bingo Card Creator doesn't involve chainsaws. Bitcoin proponents love to say "No transaction fees! Can your credit card processor do that?" while perhaps forgetting to mention that the actual mechanism for achieving this involves you juggling chainsaws.

untog 13y ago

Fedoras, everywhere

lbarrow 13y ago

This seems like a great idea, since people who are into BitCoin are likely to use online dating services.

deleted 13y ago
[deleted]
jmtame 13y ago
Honestly, I would be surprised if more than 1% of OkCupid's user base switched to BitCoin. Back in the 90s, the nerds dominated online dating. Same story with the Bulletin Board Systems of the 70s (The Matchmaker) and the punch cards at Stanford in the 60s (Happy Families Planning Services, used on the IBM 650) for the purposes of online dating. Today, it's much more pervasive with 75% of singles in the U.S. having tried online dating. Most of the women I've talked to on OkCupid are not technical, and when I setup a fake account to see what types of messages girls would receive, none of the people who initiated contact were hackers. I still don't think the mainstream understands what BitCoin is, or why it's valuable. They hear things like "anonymous" and then wonder what they'd need that for, not seeing that the earliest users of BitCoin were hobbyists, hackers, and Silk Road members. If anything, hopefully this will push people to become BitCoin users, assuming the sign up process is easy enough and the price difference is enough to make them switch.
- sneak 13y ago
  Don't overthink the joke.
  - jmtame 13y ago
    I must have missed the sarcasm. Plenty of people mistakenly believe that online dating is still used mainly by nerds. It was true at one point in time. Edit: I find it strange that you deleted your previous comment after you wrote a reply to my comment, which said you've enjoyed using OkCupid for 8 years. That comment was part of what prompted me to respond initially, and why I didn't think it was sarcasm.

thinkcomp 13y ago

Same question as always. Money transmission license?

DigitalSea 13y ago

Until Bitcoin normalises it sadly doesn't matter who accepts it, the currency is experiencing so much instability you're better off buying a prepaid Visa debit card and using that for paying for online dating services. It;s good to see more services accepting the currency but it doesn't change the fact it's a hotbox for hacker attacks, old fashioned bank-running when the price rises and all of the investors it has attracted looking to make a quick buck.

deleted 13y ago
[deleted]

rdl 13y ago

I wish there were a simple-as-Stripe way to outsource multiple payment options for customers (BTC, cards, ACH, etc.). I guess technically you could use PayPal or maybe Amazon Payments for that, but I don't think they're particularly likely to support Bitcoin anytime soon.

jeffasinger 13y ago
Spreedly comes pretty close to this actually, and they're much more likely to support working with something like CoinBase for BTC soon.

codeulike 13y ago

Wait, since when did OKCupid start charging? They were free when I was on there (before the match.com takeover)

jmtame 13y ago
It was after their acquisition by IAC in 2011. Match.com is owned by IAC, so technically it was taken over by IAC. The CEO said multiple times they'd never charge, but plans tend to change after you get acquired.
- Sidnicious 13y ago
  Paying (for A-List) is entirely optional and gets you extra, nonessential features (like no ads and extra search parameters). It's been around since 2009, long before IAC bought us. Using OkCupid is still, and will stay, free.
  - codeulike 13y ago
    Oh I see. Thanks for correcting
  - jmtame 13y ago
    My mistake. I originally prefaced my comment with "I think" and should have left that in there, because I didn't know for sure. I misread a Mashable article that said OkCupid would never charge in 2011.
publicfig 13y ago
They just charge for some extra features, such as anonymously browsing other peoples pages while seeing who visited yours and organizing search results by attractiveness.

Trufa 13y ago

This is interesting, I'm all for bitcoin, but I think if I am meeting someone over the internet, I'd like at least some part of the process to not be anonymous. I know that doesn't necessarily make me safe, but it is one more step.

netcan 13y ago

This is interesting but really more in the cool/cute/novel category than the practical needs one. I'm pretty hopeful and positive about bitcoin but that's one of the things that makes me still very suspicious of it. Seems that the places adopting it are doing so for fun, ideological or theoretical reasons rather than to solve some problem they have. I'm waiting to see online retailers requiring bitcoin payments for high risk transactions (eg sending mobile phones to nairobi). Something that demonstrates it solves a problem and (ideally) enables commerce where it wasn't possible before.

eric_bullington 13y ago
There are more large, recognized businesses coming online soon. I'm talking to a start-up right now that is fairly well-known among HNers that is working on setting up Bitcoin payment options (and have asked them if I can share their plans -- waiting for a response).

JosephRedfern 13y ago

The entire blog seems to be 404ing now.