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BitCoin Card To Launch In 2 Months, Says BitInstant 216

Posted by timothy
from the cash-back-on-that-purchase? dept.
hypnosec writes "Charlie Shrem, co-founder of BitInstant LLC, has confirmed that a BitCoin-funded international debit/credit card should be available very soon. Giving a time frame of 6-8 weeks, Shrem said over an IRC chat session that the card will function like any other credit or debit card, and that it can be used at places where MasterCard is being accepted. Shrem has also said that the initial 1000-odd cards will be given for free and subsequent cards will carry a charge of around $10. Any transaction that is carried out through the card [will incur a] 1% BitCoin transfer fee on top of the $1.50 ATM withdrawal fee."
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BitCoin Card To Launch In 2 Months, Says BitInstant

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  • by Metabolife (961249) on Tuesday August 21, 2012 @11:37AM (#41068675)

    When BTC becomes ubiquitous and I'm paying .00000343 BTC for a soda.

    • by LodCrappo (705968) on Tuesday August 21, 2012 @11:41AM (#41068729) Homepage

      if it happened no one would think of it that way, at least not any more than we currently think about driving cars around at some fraction of light years per second.

      • by Gunfighter (1944) on Tuesday August 21, 2012 @11:56AM (#41068895) Homepage

        Us old folks still remember the day when the speed limit was 2.5989246 × 10^-15 light years per second on the highway. Nowadays, you see people zooming along at 3.78025396 × 10^-15 light years per second in the 3.07145635 × 10^-15 light years per second zone. It's MADNESS!

        Where's my cane?

        • Re: (Score:2, Funny)

          by Anonymous Coward

          Why are you obfuscating your numbers like this? You seem to never have heard of SI prefixes! Also, your accuracy is overblown. Say "2.6 femto light years per second" and everyone will understand you.

          Oh, and you'll be fined 2.5 micro bitcoins for driving too fast.

      • by ultranova (717540)

        if it happened no one would think of it that way, at least not any more than we currently think about driving cars around at some fraction of light years per second.

        Hmm...

        Lightyear is c*t. Lightyears per second is c*t/t. So why not simply measure speed as some fraction of speed of light? For example, 60 miles per hour is 8.94698959 Ã-- 10^-8*c, or 89 nanoc. And 88 miles per hour, the speed requried to break space-time -continuum, is 131 nanoc.

        • As the late Admiral Hopper pointed out, 1 nanoc is roughly equal to one foot per second. Not that I endorse using feet or anything...
    • Re:Dreading the Day (Score:5, Informative)

      by Kjella (173770) on Tuesday August 21, 2012 @11:50AM (#41068847) Homepage

      Also called 3.43 microBTC (of course slashdot doesn't support the mu sign, not like a nerdy site could need that). Probably around the same time Intel introduce their 0.000000008m processors.

    • More likely you'd pay 3.43 micro-BTC.

  • by Razgorov Prikazka (1699498) on Tuesday August 21, 2012 @11:38AM (#41068689)
    A subsequent RaspberryPi story shouldnt take long now, so strap yourselves in guy's!
  • by Rogerborg (306625) on Tuesday August 21, 2012 @11:39AM (#41068709) Homepage
    Finally you can trade your services to each other directly in meatspace with the simple swipe of a card.
    • by ultranova (717540) on Tuesday August 21, 2012 @01:51PM (#41070599)

      Finally you can trade your services to each other directly in meatspace with the simple swipe of a card.

      Please don't bundle the hookers with the rest of those, for they are service workers who involve nobody but themselves and their willing customers in their transactions. Also, please don't bundle the drug dealers, who are mere black market resellers, with extortionists and assassins.

      Hookers are completely legit service providers, whether they happen to offend your personal morality or not. Drug dealers may or may not be legit, depending on their business practices. The Mafia, Russian or otherwise, is just a bunch of parasites which often preys on the first two groups. There's no other connection here.

  • Might be vaporware (Score:3, Insightful)

    by Anonymous Coward on Tuesday August 21, 2012 @11:40AM (#41068717)

    I'd take this with a grain of salt. This might be nothing but an idea and a photoshopped image [imgur.com].

    • by jandrese (485)
      Given the nature of the people in the Bitcoin community, it would only be news if this wasn't some hairbrained scheme with no backing whatsoever beyond one crazy guy with Photoshop. The chance that someone has done the legwork necessary to make this actually work is zero. This has as much chance of actually happening as some dilapidated theater getting bought up and renovated with Bitcoin money so it can show DuckTales on endless loop like the masses demand.
  • by mcelrath (8027) on Tuesday August 21, 2012 @11:42AM (#41068745) Homepage

    From their FAQ [bitinstant.com]:

    What's with these transaction limits? You may have noticed our service limits transactions: each transaction has a dynamic limit calculated by our model but the limit will never exceed a 3 digit number (that is, the highest limit that will ever be possible per transaction for our service will be precisely 999). On top of this, we limit overall amount per-user within any single trading period to far below regulatory requirements - although we no doubt are turning away some users who are disappointed by this policy, it is in everyone's interest to maintain it. If we allowed every user to transfer as much as they wanted it would cause several problems - first, it'd open us to unlimited risk if fraudulent transactions...

    If your transaction system is sufficiently insecure that your only solution to fraud and money laundering is to block transactions over a certain size, you fail. We're all dying to move away from that ridiculous idea that visa/mc/banks are currently using, because it is fundamentally broken. Who are you to tell people not to buy cars, home repairs, startup business equipment, etc...

    • by Zironic (1112127)

      Well, they'd rather not get raided by the IRS. I don't think I blame them, I wouldn't want to get raided by the IRS either.

      • by mcelrath (8027)
        So the IRS is preventing us from having secure transactions? I don't think so....and you think the IRS is going to say "oh all transactions are less than $1000? Well never mind then, we'll drop the money laundering charges...".
        • by Zironic (1112127)

          It goes the other way around. "Oh, so you're doing transactions for more then $1000? We'll shut you down then".

          • by mcelrath (8027)
            All you have to do is file the right documentation with the IRS (on behalf of your clients). e.g. international transfers over $10k must be declared, but are not illegal.
        • AML laws do indeed have thresholds on them. They have to otherwise they'd be unworkable. Do you want to require somebody to provide a passport and utility bill any time you use cash?
    • by IamTheRealMike (537420) <mike@plan99.net> on Tuesday August 21, 2012 @12:01PM (#41068943) Homepage

      You have failed the understand the problem here.

      The fraud problem is not with Bitcoin. Bitcoins security model is very simple and easy to understand - you have private keys, protect them. If they're stolen, so is your money. There are no chargebacks. How secure you make those keys is entirely up to you. I have most of my money stored in an offline wallet encrypted under a very long passphrase, which is very secure but somewhat inconvenient. Then I have a smaller amount of money stored on my phone which doesn't require any passwords to use and I just accept that if my phone is stolen or lost somehow then I lose that money, but it's very convenient.

      The fraud problem comes from the world of credit cards and traditional banking which are hopelessly insecure. Rather than give people the tools they need to secure their money, the managers of these systems simply shift the pain onto merchants who can do nothing about it beyond try and protect themselves with strict transaction limits, complicated risk analyses and just accepting that they'll lose some of the time.

      There are also other reasons which you conveniently elided, such as government regulations that forbid / complicate large transactions.

      • by iluvcapra (782887)

        The fraud problem comes from the world of credit cards and traditional banking which are hopelessly insecure.

        You go too far. Insecure compared to what? Sites that maintain "accounts" of BTCs in wallets are routinely hacked, and employ many of the same identity validation procedures a human bank uses-- Mt. Gox won't remit human currency to you unless they have a photo ID on file, and their password recovery is comparable to any old dumb bank website. Keeping your bitcoins at home in a wallet or on paper i

        • Re: (Score:3, Informative)

          You go too far. Insecure compared to what?

          Compared to any reasonable system design.

          Let's try an analogy. Imagine if the way you received email from somebody was by giving them the password to your email account, and then they logged in and uploaded a message directly to your inbox. There would be no SMTP, just IMAP upload/download. Nobody sane would design email in such a way because it'd mean to receive a message from somebody you'd have to trust them to not read your mail, which is unrealistic. But that's

    • by iluvcapra (782887)

      You can't buy a car with a regular debit card, and you're dinging them for not supporting it with a Bitcoin debit card?

      • Sure you can. I've done it.
        Trust me, it's very rewarding to talk a car salesman down to a price that's relatively near their cost and know their thinking "Well, I'll just screw him on the financing." and then lay the debit card down on his desk and say "put it on that"

        I recommend calling the bank ahead of time and telling them the charge is coming though. I've had the bank sit on the charge and call me (literally while I was still standing at the counter) to verify I was really putting $15k on my debit card
        • by Pulzar (81031)

          There's nothing rewarding about giving a large chunk of cash to somebody when a loan was available for 2% or less... It's extremely easy to invest that same cash into something that pays more than that interest.

          It's the exact same premise as your house loan which you say is for tax purposes. The loan interest is so affordable that the benefits you get from having the loan are higher than the payments you make in interest.

          The house loan and its benefits are complicated, but it's still the same basic math --

          • by moeinvt (851793)

            "It's extremely easy to invest that same cash into something that pays more than [2%] interest."

            If you had $10,000 right now, where would you invest to make an "easy" 2% ?

            Money markets are paying 1%. 10 year T-notes are paying less than 2%. The only "easy" 2% I could find was a five year CD from my bank @ 2.08%. I consider having my money tied up for five years a hard way to earn 2%.

        • by PoliTech (998983)
          Excellent post! I just got out from under all my debt last year and man is it liberating. I had to help with the payment on a wedding reception a few months ago and used my dredit card to pay the entire $12,000 ... easy peasy (no calls, no delays). Paid it all off at the end of the month, costing me zero interest and got 5% cash back to boot.

          Lesson learned. Credit card debt ... never again.

        • I am in a similar position except I like to abuse the credit cards and pay them off every month. When you run all of your household expenses through the card you can build up some really nice rewards in a year. I never carry a balance from month to month and have plenty in savings to cover an extended string of bad times so why not run stuff through the credit cards. Also if you are paying for a tow truck every 2 years you must be driving some shitty vehicles that you paid $15k for. I have only had to get a
        • I have no debt, other than a house loan... and that's obviously for tax purposes.

          People talk about the mortgage interest deduction, but my taxes always come out cheaper without itemizing... I don't know what I'm doing wrong...

          I've had credit cards for emergencies but every single one of them canceled the card on me due to lack of use. Apparently paying for a tow truck every 2 years doesn't make them enough profit.

          Why did you decide not to get a rewards card (e.g. 1% or 2% cash back) and pay it off each mont

      • I have done it. Actually I put it on my credit card (go go cash back) and then paid it off the next month using my debit card. You do need to let you financial institutions know in advance that you will be doing this as they usually have lower daily limits.
        • by samkass (174571)

          I've done this too, about 8 years ago. (Yes, I had to call the credit card company, but I got it approved in 15 minutes over the phone.) I tried to do it again 2 years ago and the dealership refused, saying they will not accept more than X thousand dollars on a credit card (forget what X was, but it was less than half the price of the car). The dealerships aren't under any requirement to accept credit cards.

    • by JDG1980 (2438906)

      If your transaction system is sufficiently insecure that your only solution to fraud and money laundering is to block transactions over a certain size, you fail. We're all dying to move away from that ridiculous idea that visa/mc/banks are currently using, because it is fundamentally broken.

      The brokenness is legal, not technical. The US government wants to know the details of every transaction over $10,000, and it's actually against the law for banks to offer privacy and anonymity to their customers on su

    • If your transaction system is sufficiently insecure that your only solution to fraud and money laundering is to block transactions over a certain size, you fail.

      If so, BitCoin is certainly not a solution. It's designed for anonymous use of money, in other words money laundering.

      But it's a pipe dream. Silk Road has practically no inherent advantages over its many non-bitcoin predecessors, e.g. Darkmarket.

  • by tlhIngan (30335) <slashdotNO@SPAMworf.net> on Tuesday August 21, 2012 @11:48AM (#41068829)

    BitCoin's supposed to be this anonymous fiat currency system. Yet they're going through a decidedly non-anonymous regular payment card network (MasterCard).

    I understand it makes the handling much easier for regular transactions, but doesn't this really sorta make it non-anonymous?

    Though, I suppose since it's really just a currency enchange between bitcoin and whatever you use, though given it's volatility (and speculators don't help), it seems dangerous - one wrong swipe of the card and what was supposed to be a 1BTC/$15 USD exchange turns into a 1BTC/$4USD exchange because some hacker decided to cash out 40,000 BTC or something at that time. Remember the currency exchange on a credit card happens at the time of the transaction...

    (And whoever is cheering the day BTC becomes the popular currency - remember there is no protection against the ills of the financial industry. Speculation, HFT (including arbitrarge amongst exchanges), etc.).

    • by TeknoHog (164938) on Tuesday August 21, 2012 @12:07PM (#41069019) Homepage Journal

      There is a nice counterargument [bitcointalk.org] on the Bitcoin forum. To summarize, the card is a great promotional tool, especially for merchants who might consider alternatives to credit card charges.

      In a way, the purpose of this card is to make itself obsolete. This is not so strange if you consider many important social movements.

    • by IamTheRealMike (537420) <mike@plan99.net> on Tuesday August 21, 2012 @12:07PM (#41069027) Homepage

      BitCoin's supposed to be this anonymous fiat currency system.

      This is a really common misconception. The point of Bitcoin is not to be an anonymous currency. The point of Bitcoin is to be a peer to peer decentralized currency that has limited and slowly decreasing inflation. Let me quote the original description Satoshi had on the website (nowadays it's on the front page of the wiki):

      Bitcoins are sent easily through the Internet, without needing to trust any third party. Transactions:

      • Are irreversible by design
      • Are fast. Funds received are available for spending within minutes.
      • Cost very little, especially compared to other payment networks.

      The supply of bitcoins is regulated by software and the agreement of users of the system and cannot be manipulated by any government, bank, organization or individual. The limited inflation of the Bitcoin system's money supply is distributed evenly (by CPU power) to miners who help secure the network.

      You'll note there's nothing in there about being anonymous. Bitcoin is designed to provide privacy (or call it anonymity if you want), because it's a financial system and people demand financial privacy. Would you use a payment system that published a public record of everything you purchased? In the current banking system, privacy is provided by your bank and credit card company (ignoring the fact that they often waive that privacy for governments both domestic and foreign, with or without legal due process). But in a financial system that doesn't have banks, that approach obviously doesn't work.

      As a result, nothing requires you to be anonymous if you use Bitcoin. Most people would like to keep their transaction history private but are happy to identify themselves to merchants and financial service providers (for instance, I do that, as does any user of Mt Gox).

      • by ultranova (717540)

        The point of Bitcoin is to be a peer to peer decentralized currency that has limited and slowly decreasing inflation.

        It fails, then. The number of bitcoins in existence will hit a ceiling and then slowly decrease due to hard driver crashes and such, while the Bitcoin economy will grow geometrically (assuming the system takes off, of course). What'll you get is deflation (which may or may not be a bad thing), and then technical problems once the value of one coin has grown to the point where the fixed-point

      • Irreversible transactions aren't necessarily a good thing. Put the wrong part in your cart and checked out? Too bad, it's irreversible. No canceling that order!

        You know what funds are available for spending within seconds? Cash. Yes, this is a valid argument because we're talking about using a damn MasterCard at a point-of-sale terminal in this article. Available in minutes is shit in comparison. Oh, and since they are reliant on the MasterCard network, you get the MasterCard funds transfer speed, so

        • by mythosaz (572040)

          Transactions OF BITCOIN are irreversible.
          Transactions between two exchanging parties are, of course, reversible.

          If I give you a $10 bill, or B10, that's yours, and there's no "undo" button in the system to reverse the charge.
          Nothing, however, stops you from giving me back my $10 bill or my B10 if we cancel the transaction.

          You trust a merchant a heck of a lot more when you give them your credit card or checking information.

          • No, but I trust the bank that stands behind the credit card to honor the legal agreements they put forth when I open the account. I ordered a part from some shop in California earlier this year, they sent the wrong thing and didn't want to RMA, so American Express yanked my money back out of their account.

            They tried to fuck me, but the bank fucked them first as my proxy. It's called buyer protection, and most payment services offer this.

    • by Blakey Rat (99501)

      It's already not anonymous anyway. Bitcoins live in an account, the account is associated with a person. It's exactly as anonymous as a VISA card.

      • the account is associated with a person

        Not necessarily. The "account" only becomes associated with a particular person if that person chooses to do so (e.g. by obtaining the card in question).

    • In addition, at the best case, you're getting hosed for an extra 1% transaction fee instead of using the regular Visa / MasterCard debit card that is right next this card in your wallet.

      What could possibly stand in the way of adoption?!

  • Why? (Score:5, Insightful)

    by ceoyoyo (59147) on Tuesday August 21, 2012 @11:51AM (#41068851)

    1% + $1.50 fee... so why would I want to use this? My current debit transaction fees are... zero. AND I don't have to worry about the value of the money in my account fluctuating wildly.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Because you're not a drug dealer?

      • by FhnuZoag (875558)

        Where does the ATM fee in dollars get charged to, anyway? Do you have to link a dollar bank account to this card, as well?

    • Because if you receive some money via Bitcoin it's a convenient way to spend it down at your local store, for example. The alternative is using an exchange and then wiring the money to your account, which can take days and have much higher fees (banks are really slow sometimes).
      • by vlm (69642)

        The alternative is

        Since the earliest days there have been people who will take BTC and mail you a gift card and/or those prepaid credit card gift card things but you have to wait for postage. I guess there are people who will email you at least some "virtual" GC like amazon and itunes card numbers. I have no personal experience.

    • Re:Why? (Score:4, Interesting)

      by MightyYar (622222) on Tuesday August 21, 2012 @12:40PM (#41069463)

      Here's one scenario:

      You sell things on eBay. You have a Paypal account that can accept credit cards. When you sell you item, you pay Paypal 2.9% + $0.30 for merchant fees.

      Or, you sell things on eBay. You accept BitCoin. When you pull the money out of the ATM, you pay 1% + $1.50.

      For a $100 item, BitCoin costs you $2.50 and Paypal costs you $3.20.

      • by ceoyoyo (59147)

        Except this is the actual scenario:

        You sell things on eBay. You have a Paypal account that can accept credit cards. When you sell your item, you pay Paypal 2.9% + $0.30 for merchant fees.

        Or, you sell things on eBay. You accept BitCoin. eBay deletes your auction, and maybe your account.

        Supposing eBay DIDN'T ban you, there are cheaper ways to accept payment. In Canada an Interac e-transfer works essentially the same way PalPal does (you send money from your bank account to someone else, identified by the

        • by MightyYar (622222)

          I think you missed my point: it is cost competitive with existing, competitive solutions.

          It gets even more competitive when you already have a quantity of bitcoins or don't plan on withdrawing them from an ATM, or when comparing with international rates for services like Paypal.

          • by bloodhawk (813939)
            Last I looked even the worst currencies in the world don't fluctuate as badly as bitcoin values do. accepting bitcoins is basically gambling.
    • by Tokolosh (1256448)

      If you travel overseas (from the US), then transaction fees are not zero. In such case it might make sense.

      All the grouchers need to understand that this is a journey. PayPal was not perfect from day one - this is a new paradigm that still needs to evolve. The perfect is the enemy of the good. - Voltaire

      • by ceoyoyo (59147)

        Actually, if I travel TO the US, my fees are not zero.

        If I use my debit card to withdraw cash outside my home country my bank charges me nothing. The bank whose machine I'm using charges me some fee though. I really doubt this card will be any different, except that your bank (BitInstant) will charge you as well.

        If using it as a credit card, my Mastercard charges me nothing to use anywhere MC is accepted, except the exchange rate, which is set in the bank's favour. BitInstant will charge $1.50 plus 1%, p

  • by wiedzmin (1269816) on Tuesday August 21, 2012 @12:03PM (#41068969)

    Wasn't the whole point of Bitcoin for it to be anonymous, like cash? Wouldn't having a card, with your name on it, to transfer Bitcoins to/from defeat that purpose, or at the very least flag you as a suspicious-individual-dealing-with-shady-untrackable-currency-used-by-hackers in the yes of the feds?

    • by vlm (69642)

      Wouldn't having a card, with your name on it

      I have little use for a "Bitcoin" card with my name on it.

      Right now you can go on silk road (and many other places...) and turn BTC into anonymous visa/MC prepaid "credit card" gift cards. I'm not motivated enough to determine where this product fits into the existing market WRT to more or less anonymity and more or less fees and more or less trustworthyness. Superficially with no research it sounds astoundingly lower anonymity, more fees, and much less trustworthy than the guys who've been happily doing

    • Considering Mastercard's stance on Wikileaks, I'm quite confident that they wouldn't go ahead with this without an explicit arrangement with the US government. And that may well be "ease of nabbing the Silk Road kiddies when they try to cash out".

  • by Animats (122034) on Tuesday August 21, 2012 @12:48PM (#41069565) Homepage

    There's already BitCard, from "Global Standard Bank" [globalstandardbank.com] They're not a real bank. They used to have pictures of their supposed building and offices in Montreal, which turned out to be a Photoshopped picture of a building on the US west cost, with a fake sign added, and a picture of a bank interior in Florida. They're not registered with Canadian banking authorities.

    Here's the discussion on Bitcoin forums [bitcointalk.org] about them.

    As for the new operation, I have a hard time taking seriously a financial institution that announces its products on IRC.

    • by retep (108840)

      > As for the new operation, I have a hard time taking seriously a financial institution that announces its products on IRC.

      Bitinstant is well known in the community, as are the actual people behind it. What's wrong with Charlie Shrem, who frequents IRC, letting it be known that his company will be releasing a new product soon? This isn't after all their official "we have actually released this" announcement. Rather it's just a way to let people know and find some people who are willing to sign up for the

  • Many posters here are missing the point of this credit card, claiming that it will have all the downsides of both systems it is merging.

    --Bitcoin is not required to be anonymous to be useful, and it's a benefit you can still have if you forego the credit card
    --The point of the credit card is to make it possible to leverage your Bitcoins for every day purposes. If you reload the card using Bitcoins, but then you can use the card anywhere people use Mastercard -- now your Bitcoin savings can be used just
    • by slew (2918)

      FWIW, I think you are missing the point.

      This is simply a vanity-marketed stored-value reusable gift card. The vendor of this gift card just happens to accept bitcoin in exchange for value-add. This isn't any different than any other partner-reward card that puts value into a debit card, except you are rewarded by being able to pay in bitcoin instead of say buying gas or groceries (oh and you have to pay 1%+ATM fee on top of that instead of say getting 2% back)...

      Vanity/Affinity gift-card marketing works g

  • Sweet. At last we've found a way to combine the inconvenience of finding a merchant that sells something you want and accepts Bitcoins with the inconvenience of finding a merchant that sells something you want and accepts non Visa/MC/Discover/Amex cards!

  • So, can I pay that $10 charge using ....bitcoins?

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