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  6. Bitcoins: Why are they not going to be accepted?
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  12. katacarbix
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  19. PostPosted: Sun Apr 14, 2013 12:35 pm Post subject: Bitcoins: Why are they not going to be accepted? Reply with quote
  20. I understand that NFSN wil not accept Bitcoins as a payment, but why? I'm not going to ask to add them as payment, but I would like to hear a valid reason why not.
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  24. kijin
  25. Member
  28. Joined: 29 Dec 2009
  29. Posts: 264
  31. PostPosted: Sun Apr 14, 2013 4:01 pm Post subject: Reply with quote
  32. I'm just another customer. However, off the top of my head, I can think of a few of reasons why @jdw might be wary of Bitcoins:
  34. 1) The value of a Bitcoin fluctuates like crazy, even in the span of a few hours. This can't be good for business, especially if the exchange rate suddenly goes down.
  36. 2) Bitcoin exchanges are getting hacked all over the place. Do you really want to keep your money in a bank that gets robbed all the time?
  38. 3) NFSN never promised that they will keep themselves ignorant of your identity, only that they will do their best to keep your identity secret from third parties (except when they are legally required to disclose it). By using real money to pay NFSN, you vouch to them that you are a who you say you are. Bitcoin payments have no such guarantee.
  40. 4) Buying and selling Bitcoins falls into a legal gray area, and the only reason government haven't bothered so far is because the Bitcoin market was small enough to ignore... until now. As far as I can tell, every NFSN policy has a very clear basis in U.S. law, especially where customers' privacy and other rights are concerned. I'm not a lawyer, but venturing into legal gray areas might weaken the powerful legal protections that NFSN currently offers to customers.
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  44. jdw
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  49. Joined: 07 Mar 2002
  50. Posts: 7352
  51. Location: NearlyFreeSpeech.NET
  52. PostPosted: Sun Apr 14, 2013 7:32 pm Post subject: Reply with quote
  53. I think fundamentally this question is unanswerable, because the questioner wants to hear "a valid reason" why not, and it's entirely possible that person who believes passionately in BTC -- as many do -- and believes we ought to accept it will simply reject any reason offered as not valid.
  55. But as far as reasons go, that's a good start, kijin, although #3 is weak because "bitcoins = anonymous" is more or less a fallacy and prepaid gift cards make payment identity relatively easy to forge.
  57. However, you left out:
  59. 5) We don't take payment in Euros or eGold or LTC or indeed anything else but USD either. BTC are in no way singled out by their exclusion.
  61. 6) There are other payment mechanisms that many more people want (e.g. Dwolla) that we do not yet offer; the bitcoin contingent definitely makes their voices heard, but is also very small.
  63. 7) The transaction confirmation lag makes transactions difficult. If we did accept bitcoins, we would not be able to credit them before the transaction is adequately confirmed (which could take hours or days, especially if the sender doesn't pay the transaction fee). BTC volatility rears its ugly head again here; we'd forever be stuck in fights over whether the member should be credited based on the USD-BTC exchange rate at the time of transaction or the time of confirmation, particularly if one of those values might be double the other, as has been observed recently, or if our preferred exchange has a different rate than their preferred exchange, as sometimes happens.
  65. 8) No bitcoin exchange -- including the ones that offer merchant services and automatic BTC-USD conversion to facilitate payments -- has demonstrated itself adequately trustworthy. Here "trustworthy" indicates both able to stay online in the face of trading volume and attacks and being run by identifiable people who are demonstrably qualified to be running it. Many take steps to evade US regulation. To my knowledge, none of them maintain deposit insurance like the banks we currently use to process payments. (And in all honesty, we've received a sudden rash of "why don't you take bitcoin?" in the past few days, many of which read less like they're from bitcoin supporters and more like they're from speculators who never cared about BTC except as easy money and are suddenly desperate to cash out before the crash, but MtGox is down again.)
  67. 9) We have nothing to spend bitcoins on. If we were interested in playing the bitcoin hoard-and-speculate game currently underway, perhaps this wouldn't matter. But we aren't, so it does. We would be forced to sell to USD immediately. Even with services that facilitate doing that like BitPay, it creates an entire additional layer of hassle and brings us back to the problems with the exchanges. Also, providers who "accept" bitcoin but immediately convert to USD are mini-exchanges which reinforce BTC as a commodity, not a currency. I don't believe that's the long term goal for BTC.
  69. 10) Economics. Whatever it costs us to add support for a payment method, we have make that money back somewhere. One of the biggest reasons bitcoin supporters want to pay by bitcoin is because they think it would lead to smaller deposit fees. It wouldn't. We charge the same deposit fees to all transactions, and offer instant rebates based on the costs of accepting payments (which many people misunderstand to be the transaction fees charged to us, ignoring the costs of banking, accounting, fraud, tax return preparation, and development and maintenance of payment methods). Due to the specialized nature and limited volume of BTC payments, and the inherently higher risks and development costs associated with any form of currency conversion, the instant rebate would likely be very small or even nonexistent, making BTC one of the most expensive payment methods we offered, not one of the cheapest.
  71. Even so, we aren't closing the door on it, but as recently stated here, there's no point in even asking until after PHP 5.4 and Dwolla are implemented. It would also help to not ask in the month after a blockchain fork, or during a period of 500% volatility in less than a week.
  73. Of course, if some passionate early adopter wants to give us USD $10k worth of BTC to subsidize BTC development and acceptance, they can send it to us at 18YrBbm4ZbUb8kFUB5yG5PBUq71FxRWEBA and we'll be happy to reconsider. :)
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  77. jdw
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  82. Joined: 07 Mar 2002
  83. Posts: 7352
  84. Location: NearlyFreeSpeech.NET
  85. PostPosted: Tue Apr 23, 2013 3:47 am Post subject: Reply with quote
  86. Reason number 9 (nothing to spend them on) has taken a blow.
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