Allowing conversion of soft money to hard money (a btc with 6 onchain confirmations) means every criminal will use you as an on-ramp to convert their hack cc details and bank accounts into immutable hard money.
If I buy a sweater from some company through PayPal, and the company sends me the sweater, they're out the sweater if they get a chargeback. They can fight it, but PayPal is just the middleman.
Cryptocurrency vendors would have to figure out a policy to deal with it, so it might be that nobody would be willing to sell crypto for PayPal, but there's no reason for PayPal to block it.
I mean, it's a big problem in a sense, if vendors don't expect it. But by necessity the bitcoin vendors will have to deal with it as a prime scenario, which means they'll either have to offer a meaningful user identification story (i.e. KYC or similar protocols) or offer a settlement period before the bitcoin is available -- credit the customer's account, but don't let them withdraw for 30 days / 90 days / whatever.
This requires that the vendor take on some risk (because if they make the trade and the price moves but the trade is cancelled due to chargeback the price may have moved) and they have to price this in to the deal; maybe charging a premium for using PayPal, etc. This is all fairly standard and Coinbase, for example, had to deal with a ton of this when they accepted credit card purchases.
But there's no risk to PayPal.
I don’t know how the exact details iron out but this was a concern when I worked on a payments platform. PayPal enables transactions for merchants who don’t have a relationship directly with Visa/MC and thus are themselves responsible at some level.
PayPal processed 711.92B USD of transactions during 2019. [1] It's feasible that they'll hit a trillion dollars in PV this year. While it's true that Visa/MC could lock them out if they so chose, it's incredibly unlikely.
[1] https://www.statista.com/statistics/277841/paypals-total-pay...
Having high rates has significant consequences - leading to fines from card schemes, lower authorisation rates from issuers, higher interchange costs as it harms negotiations for custom deals with issuers.
Even quite small numbers in the enormous pond of PayPal can have serious impacts when it's well optimised.
Also keep in mind, where it is possible to do this kind of thing, it can very rapidly grow to a huge problem when fraudulent end users learn they can do it.
Same thing with Facebook and crypto ads. There were just too many pyramid schemes and get-rich-schemes with a cryptocurrency angle that were being advertised.
Not every PayPal transaction is refundable.
I've bought Bitcoin using PayPal before.
In practice this just means: when a hacker gets into your elderly family member's PayPal account, they need to buy as much crypto as they can since then there's no chargebacks for fraud.
I can appreciate why the pendulum swung hard against ads - it's incredibly hard to differentiate between real and fake ICOs, and we're seeing that again with the defi craze at the moment. It's just made it so much more expensive as an emerging company to try to sell services in this market even when you _aren't_ trying to sell a coin.
Muppets come in and buy the token on Uniswap. But they can't go back and sell it. Essentially all the Ethereum in the liquidity pool becomes the personal piggy bank of the scammer. There's nothing Uniswap can even do to prevent this type of scam, because the malicious code is in the token tracker contract, not Uniswap itself.
https://www.reddit.com/r/UniSwap/comments/jew0id/1000_reward...
Now, people willingly buy into pump & dump schemes, hoping to not be the ones left holding the bags. Just go to r/cryptomoonshots or /biz/ where a new coin is shilled practically every hour and everyone just hopes to ride the pump and dump it on the next round of gullible buyers.
There was a massive wave of food-themed DeFi tokens recently with multiple exit scams.
Non-native English speaker here but doesn't "by design" refer to something being designed explicitly for that purpose? I agree that lots of ICOs were indeed scams and/or attempts of just taking money for low-quality work, but I don't think fund-raising was initially designed for that. It just happened to be that lots of fund-raising are scams.
But to say that it's by design it's going a bit far, and making your point weaker, not stronger.
I'd even argue that the juggernaut BTC was _designed_ to be trackable, and as the recent history shows, law enforcement successfully and multiple times did exactly that when needed - tracked, identified and penalized bad actors.
I suppose you're right that there wasn't any requirement for that design for the ICOs to be scams, there just wasn't any particular need for them to not be scams.
Virtually all (actually all?) ICOs themselves have been designed to have scam friendly terms-- e.g. no real ownership or control for the buyers, no accountability for the sellers, and little to no transparency. Even the least scammy of the ICOs have some term or another that effectively enables their issuers to just walk off with the funds with no recourse in the contract.
The abundance of scams in ICOs (and the cryptocurrency ecosystem in general for that matter) has more to do with the heavily regulated nature of the mainstream financial space, than the design of the cryptocurrency space itself. Because most of the world is regulated, fraudsters are now funneled to cryptocurrency. They come where they are the most free, but there is nothing in the structure of cryptocurrencies that encourages scams over legitimate enterprises. Honesty and hard work is still most rewarding. The absence of barriers to prevent scams other than regular social signals and the user's own vigilance, is the natural state of the world.
This same type of argument is repeatedly employed against free-speech platforms, that keep ending-up hosting the neo-nazis and other undesirable groups that were ousted from Facebook and co.
Shared reputation systems layered over a free platform like Matrix announced[1] a couple days ago should provide relief, but simple increase in adoption will also tilt the ratio back to the average.
Magic.
This is about the dynamics between a set of entities, being mischaracterized as a fundamental property of one of these entities. (Here: migration of a pool of bad actors from traditional finance to cryptocurrency).
Like saying Iraq is an evil country by design because it harbors terrorist groups. Most people would agree by now that the emergence of these groups isn't directly caused by the nature of the country's culture or religion. For good reasons we have enough respect for these things to dig deeper in our understanding than a superficial glance. You're free to not do this with cryptocurrency, but then you probably shouldn't hold your opinions about it too strongly.
Comparing Bitcoin with a country like Iraq is pointlessly simplistic. Countries are complex social entities that aggregate behaviors through a large number of mechanisms. Bitcoin is a single mechanism whose characteristics have entirely predictable consequences.
Any sympathy for the University of California? https://www.bbc.com/news/technology-53214783
Bitcoin doesn't kill people. People kill people...right?
Cash is a single mechanism, that also predictably allows robbers to more easily offload their loot than if it was livestock, jewels or silverware. Are cash and other fungible assets automatically evil once they're on the internet?
You can cite random examples of crimes committed using Bitcoin, but that still doesn't begin to address the initial argument to which I replied: is cryptocurrency inherently evil? Will it cause more good in the world than bad once it is widely adopted?
They attract different animals for this reason.
The bitcoin ico scams attracts many predators.
Crypto scammers, overwhelmingly, simply fool people chasing easy profits. Hacks and actual offensive behaviors are uncommon, you're safe from predators in your den and you don't need to leave it.
Wait until smart contracts have been live for a certain amount of time before interacting with them. You won't fall prey to predatory behavior if you mint DAI with Maker or trade well known tokens on Uniswap for instance. The danger comes when sending money with no guarantees of getting anything back, in the hope of multiplying your money.
So do ponzi schemes. The early investors into them make money, and have a lot to gain by spreading the word to other people.
Investing into a growing ponzi scheme is a rational investment strategy. That's why people do it, and that's one of the reasons for why they are illegal.
As far as I can tell, the majority of interest in ICOs comes from people who are hoping to dump their investment onto a bigger fool. Ironically, the worse the ICO is as a business, the more fools will be interested in it, which makes those ICOs more attractive to invest in.
Either way, it's a step that highlights regulatory progress being made. It may not be the blockchain spirit, but alas that may not be what ultimately prevails.
Were you? Then you must have simply forgotten how Ebay UK (which deals with Paypal) allowed for Bitcoin sales only through the ads, outside of the Paypal-sphere [0]. At the time this was pretty signinficant because this was when several Uk based bitcoin exchanges were being shut down. Bittyliciious being the biggest. And Localbitcoins started to become a target by regulators and gox was on its last legs.
Also worth noting how you could bypass this with the sale of Bitcoin 'software' on their platform:
> Ebay previously allowed users to sell software for bitcoin mining and transactions.
0: https://www.ibtimes.co.uk/ebay-uk-allow-users-buy-sell-bitco...
> until Google can shill their centralized cloud solutions as a scalability option and whatever other evil shit they have in the pipeline
How does this relate to search ads?
There doesn't have to be just one reason, however.
This bit me with Coinbase 7-8 years ago when I was trying to buy $10k of bitcoin -- they'd only allow bank transfers, and only $100 at a time until you were "established". I gave up (and lost a lot of profit because of it).
The quasi-anonymous nature of crypto means that fraud is rampant. For better or worse payment processors and banks have decided they'll make more money banning crypto unless the whole transaction is within their ecosystem. It's not great but I get it.
The fraud I mean is people funding their accounts, losing, then charging back.
It's for people who leave a bunch of money sitting idle in their Paypal accounts for several months and don't want it to lose buying power.
Paypal can achieve this by holding onto Bitcoin reserves to back their customers' funds. What this means is that Bitcoin is going to become the new gold standard. This will allow Paypal to take the place of traditional banks and help society to transition away from fractional reserve banking backed by fiat currency.
It is very clever and brave of Paypal to do this.
The leading candidate for Satoshi is international murdering drug- and arms-dealing, racist, real-life Bond-villain Paul "Solotshi" Calder Le Roux. He of course created E4M and Truecrypt. [1,2] And he likely did so to avoid money laundering rules.
And hey he just told a judge he was looking to get into the Bitcoin business!
“The scope and severity of Mr. Le Roux’s criminal conduct is nothing short of breathtaking. I have before me a man who has engaged in conduct in keeping with the villain in a James Bond movie,” Judge Abrahms said.
"I plan to start a business selling and hosting bitcoin miners." [3]
You love to see it.
[1] https://en.wikipedia.org/wiki/Paul_Le_Roux
[2] https://www.wired.com/story/was-bitcoin-created-by-this-inte...
[3] https://news.bitcoin.com/satoshi-nakamoto-paul-le-roux-start...