5 ms·

Oh, dear. If I were the president of PayPal and wanted to make quick buck, I would buy some bitcoins, released news like this, and sold my bitcoins the next day

by vlasta2 13y ago

Oh, dear. If I were the president of PayPal and wanted to make quick buck, I would buy some bitcoins, released news like this, and sold my bitcoins the next day with a nice profit. And then, I could just deny the news, sending bitcoin value back where it was so that it is ready for the next exploiter... Heh. But seriously, PayPal and Bitcoin are by nature rivals. If PayPal wanted to have a crypto-currency, it would develop its own, not validate and boost value of another one gaining nothing in the process.

ok_craig 13y ago
A lot of what keeps regular Joes away from bitcoin is its complexity and the difficulty of keeping your funds secure. If PayPal were to make the most secure, easiest-to-use bitcoin wallet, they could profit greatly from it and also provide something that doesn't really exist anywhere yet. All PayPal does right now is help you get dollars from point A to point B, and in the process they take a cut. They could do the same thing with bitcoin. I don't think it would be competition with bitcoin, it would be promoting it to mutual benefit. I would be afraid of them providing this service without allowing you to export your data, however, which seems like the kind of thing PayPal might like to do. If your bitcoins were trapped in their system you're always in danger of having your account frozen as has been a problem up to now. Part of the purpose of bitcoin is to be able to avoid that, so I'd hate for PayPal to bring that whole problem to the bitcoin world. But if they approach it properly, bitcoin could be a great opportunity for PayPal, instead of a threat.
- vlasta2 13y ago
  I am sorry I cannot agree with you. You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the world adopted Bitcoin, it would be the end of PayPal's business model. If PayPal were ready to replace their business model with something way less profitable, but more future-proof, it would still make no sense for them to adopt bitcoin. It would only make sense if they owned significant amount (50%) of the existing bitcoins and had the code base under at least indirect control. What would happen if this were true and the bitcoiners found out? ...too many ifs. That said, Bitcoin will never become a commonly used currency in its current form. The built-in deflation is a fatal flaw, which makes it unusable for normal buyers or sellers. It is only appealing for "get-rich-quick" investors, which is a shame, 'cause we really need a good solution (0% fee & safe) for online payments.
  - ok_craig 13y ago
    There's no reason PayPal has to build a vanilla bitcoin wallet interface. It's true that you cannot simply deduct a certain percentage from a direct bitcoin transaction. However, they could pool your coins in their own controlled address, and when you choose to send a payment through them, it makes one transaction on your behalf for that amount, and also a second transaction for 1% to their revenue address. Average Joes who don't want to bother having to understand bitcoin may find this tradeoff acceptable if PayPal makes it worth it by providing a very simple and secure bitcoin interface that is better than everything else out there. Whether you think bitcoin itself is doomed to failure due to deflation and all that is a different topic entirely.
    - vlasta2 13y ago
      One of the advantages of bitcoin is that you do not need a middle man to do a transaction. Some people may choose one for whatever reason, but would they be OK with paying the transaction fees? Would you use a credit card if you had to pay 4% more than if you paid in cash? I do not think many people would be OK with that. It may sound as if I am a PayPal lover and bitcoin hater, which is NOT the case. I just do not see them cooperating sensible.
      - clueless123 13y ago
        You write: "Would you use a credit card if you had to pay 4% more than if you paid in cash? " That is exactly what happens today on the real world. If you make it convinient for me to use your "credit card", I will use it, and because of that, vendors pay the 4% fee. All paypal needs to do is to make it easy (at non bitcoin vendors for example) for me to spend my bitcoins and I will use it. Vendors will fall in line because they want my business. The above said.. IMHO, there is no way in hell that "the man" will allow bitcoin in its current form to prosper (at least not without a heck of a fight), as to much visibility & control would be lost.
        vlasta2 13y ago
        Today, the buyer does not experience the fee. Sellers accept it, because the middle man gives them no other choice. With bitcoins, the middle man has no leverage anymore as the buyer and the seller can interact directly. That was my point.
ihsw 13y ago
Bitcoin is more than a currency, it's also a massive, international, and reliable transaction network. Furthermore it isn't tied to any individual entity (government or corporation) so there is value in its impartiality and lack of restrictions on senders or recipients.
umsm 13y ago
I think everyone is over-reacting... He clearly states that they're thinking about it just like everyone else...
- illuminate 13y ago
  And the free publicity gets whatever else he was talking about heard.
milesskorpen 13y ago
David Marcus makes ~$1.5-2M / year, and has $11M+ in stock options, plus whatever he made from selling his last startup (Zong). I really don't think he needs to worry about gaming the bitcoin ecosystem. Also: Developing a new currency is hard, and inherently antagonistic with other governments. BTC, on the other hand, is basically tolerated for the time being.

by vlasta2 13y ago

ok_craig 13y ago

A lot of what keeps regular Joes away from bitcoin is its complexity and the difficulty of keeping your funds secure. If PayPal were to make the most secure, easiest-to-use bitcoin wallet, they could profit greatly from it and also provide something that doesn't really exist anywhere yet. All PayPal does right now is help you get dollars from point A to point B, and in the process they take a cut. They could do the same thing with bitcoin. I don't think it would be competition with bitcoin, it would be promoting it to mutual benefit. I would be afraid of them providing this service without allowing you to export your data, however, which seems like the kind of thing PayPal might like to do. If your bitcoins were trapped in their system you're always in danger of having your account frozen as has been a problem up to now. Part of the purpose of bitcoin is to be able to avoid that, so I'd hate for PayPal to bring that whole problem to the bitcoin world. But if they approach it properly, bitcoin could be a great opportunity for PayPal, instead of a threat.

vlasta2 13y ago
I am sorry I cannot agree with you. You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the world adopted Bitcoin, it would be the end of PayPal's business model. If PayPal were ready to replace their business model with something way less profitable, but more future-proof, it would still make no sense for them to adopt bitcoin. It would only make sense if they owned significant amount (50%) of the existing bitcoins and had the code base under at least indirect control. What would happen if this were true and the bitcoiners found out? ...too many ifs. That said, Bitcoin will never become a commonly used currency in its current form. The built-in deflation is a fatal flaw, which makes it unusable for normal buyers or sellers. It is only appealing for "get-rich-quick" investors, which is a shame, 'cause we really need a good solution (0% fee & safe) for online payments.
- ok_craig 13y ago
  There's no reason PayPal has to build a vanilla bitcoin wallet interface. It's true that you cannot simply deduct a certain percentage from a direct bitcoin transaction. However, they could pool your coins in their own controlled address, and when you choose to send a payment through them, it makes one transaction on your behalf for that amount, and also a second transaction for 1% to their revenue address. Average Joes who don't want to bother having to understand bitcoin may find this tradeoff acceptable if PayPal makes it worth it by providing a very simple and secure bitcoin interface that is better than everything else out there. Whether you think bitcoin itself is doomed to failure due to deflation and all that is a different topic entirely.
  - vlasta2 13y ago
    One of the advantages of bitcoin is that you do not need a middle man to do a transaction. Some people may choose one for whatever reason, but would they be OK with paying the transaction fees? Would you use a credit card if you had to pay 4% more than if you paid in cash? I do not think many people would be OK with that. It may sound as if I am a PayPal lover and bitcoin hater, which is NOT the case. I just do not see them cooperating sensible.
    - clueless123 13y ago
      You write: "Would you use a credit card if you had to pay 4% more than if you paid in cash? " That is exactly what happens today on the real world. If you make it convinient for me to use your "credit card", I will use it, and because of that, vendors pay the 4% fee. All paypal needs to do is to make it easy (at non bitcoin vendors for example) for me to spend my bitcoins and I will use it. Vendors will fall in line because they want my business. The above said.. IMHO, there is no way in hell that "the man" will allow bitcoin in its current form to prosper (at least not without a heck of a fight), as to much visibility & control would be lost.
      - vlasta2 13y ago
        Today, the buyer does not experience the fee. Sellers accept it, because the middle man gives them no other choice. With bitcoins, the middle man has no leverage anymore as the buyer and the seller can interact directly. That was my point.

ihsw 13y ago

Bitcoin is more than a currency, it's also a massive, international, and reliable transaction network. Furthermore it isn't tied to any individual entity (government or corporation) so there is value in its impartiality and lack of restrictions on senders or recipients.

umsm 13y ago

I think everyone is over-reacting... He clearly states that they're thinking about it just like everyone else...

illuminate 13y ago
And the free publicity gets whatever else he was talking about heard.

milesskorpen 13y ago

David Marcus makes ~$1.5-2M / year, and has $11M+ in stock options, plus whatever he made from selling his last startup (Zong). I really don't think he needs to worry about gaming the bitcoin ecosystem. Also: Developing a new currency is hard, and inherently antagonistic with other governments. BTC, on the other hand, is basically tolerated for the time being.