I’m noticing an interesting, and slightly disturbing new trend over the past few days when it comes to Bitcoin exchanges.
I’m not talking about the price tanking & hovering around 1/5th of what it should be worth, although that does sadden me profoundly.
I’m noticing more & more Bitcoin exchanges are turning towards credit cards and Paypal as a way to “safely” purchase Bitcoins.
Even though this might be a very convenient method for a lot of people, and an even more desired method for others, isn’t this exactly what we are trying to move away from?
By using credit cards and Paypal to buy Bitcoin, isn’t that the opposite of “decentralized, virtually anonymous and secure”?
There are some advantages to this process, don’t get me wrong. If anything bad happens, you can always try and get a refund of your money. That’s safe.
And it’s faster than sending a bank wire, at first glance. However, due to verification required for any transaction, you might still end up at the same time “wasted” while waiting.
On the other hand, Paypal is known to randomly limit accounts for “security reasons”, and purchasing Bitcoin, which is “digital goods” is kind of hard to get resolved.
Not to mention the flags thrown on your Paypal account for “potential money laundering” if you’re buying and/or selling in big volumes.
Credit cards & Bitcoins are a different problem altogether. Sure, they’ll do credit card verification and all that, but that doesn’t mean your credit card can’t be fraudulently used to buy Bitcoins.
If you’re a victim of credit card fraud in this matter, you’ll have a 50/50 chance to get your money back from the bank, because it’s “digital goods” so not all banks take responsibility for it. (Happened to once unfortunately, not with Bitcoin, but it was something “virtual”)
Exchanges have come to a point where they have to stay relevant , or they might go out of business one by one I’m afraid.
With the recent hacking of exchanges, other exchanges “losing” Bitcoins, and a lot of them just not looking legit to start with, things have to change.