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BitInstant Continues Bitcoin Paycard Plan 152

Posted by samzenpus
from the pretend-plastic-money dept.
judgecorp writes "Virtual currency exchange BitInstant says its BitCoin credit card is still on track. even though Mastercard denied any involvement with the plans yesterday. BitInstant says it is applying through a third party bank which will broker a Mastercard application. BitInstant is still taking signups for the card. Oh, one clarification: the card will not be anonymous."
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BitInstant Continues Bitcoin Paycard Plan

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  • for $15,000 virtual debt
  • by fustakrakich (1673220) on Friday August 24, 2012 @12:52AM (#41105653) Journal

    And the advantage using it is what then? If this catches on, I'll be watching intently how the revenuers treat this.

    • You can get much lower fees than standard account->account fees.

      • They've only talked about what they want to charge, until they have the agreement in place, no one really knows what the fee structure will be for this card.

    • by metacell (523607)

      I guess the advantage is that you can use the same expense account for both your anonymous and your ordinary purchases. You don't need to transfer money manually between two accounts.

    • by mug funky (910186)

      bitcoin will never be accepted if it's anonymous. money laundering and what not. it's just too easy to take all scrutiny away from currency - both good and bad.

      bitcoin pushes all the right anarchistic buttons with me, but my pragmatic side says that it's just too easy for arseholes to avoid justice (arseholes who just want to shit all over everyone).

      where the security v freedom tradeoff is a soft threshold, bitcoins sort of require a hard threshold at 100% freedom 0% security, and not negotiable by design

      • by pla (258480)
        bitcoin will never be accepted if it's anonymous.

        You realize, of course, that the US "cash" economy dwarfs the "real" economy?

        Do you remember why soooo many people had trouble putting in claims for damages after the BP spill? Because people pulling in six figures had no way to prove their income (ie, they bought and sold everything cash, then rolled 300d100 to decide what to report to the government in April). I have no sympathy for that situation, but use it only to provide some context.

        People hav
        • bitcoin will never be accepted if it's anonymous. You realize, of course, that the US "cash" economy dwarfs the "real" economy? Do you remember why soooo many people had trouble putting in claims for damages after the BP spill? Because people pulling in six figures had no way to prove their income (ie, they bought and sold everything cash, then rolled 300d100 to decide what to report to the government in April). I have no sympathy for that situation, but use it only to provide some context. People have no problem with anonymous currency. Banks and governments do, but currently, people hate banks, and don't feel much warm-and-fuzzier about governments.

          I don't believe I've ever met someone that spends 10k or more a year in cash. Unless they were hiding the fact. Whenever I go out (business meetings in particular) everyone uses debit or credit cards. Occasionally someone will take cash out of an ATM and use it, but that's more the exception than the norm these days. My gut feeling on someone claiming to have done $100,000 in cash transactions is that they are lying. In this case, they have a good motive to lie - a potential payout from BP!

          • by pla (258480)
            My gut feeling on someone claiming to have done $100,000 in cash transactions is that they are lying.

            You could more accurately say that they use barter combined with something like cash-backed net-90 terms - No, people don't actually fork over wads of $100s on a weekly basis. They keep a running tab with their major suppliers and customers (which often overlap to a large degree), and settle up every few months.
    • The point of the entire operation is to get more people to use bitcoins so those who stocked up on them can sell them. It matters not a whit whether a real credit card is in the offing as long as the word is circulating that it might be. Its like watching a stock being pumped by rumours.

    • And the advantage using it is what then? If this catches on, I'll be watching intently how the revenuers treat this.

      Isn't it obvious? It combines the convenience, stability, and wide acceptance of a weirdo cypherpunk crypto-currency with the privacy, security, and freedom of a credit card! How could you not love it?

    • by pla (258480)
      And the advantage using it is what then?

      You can't anonymously use it. FTA, however, "Each card will bear a QR code on the front and a printed BitCoin address on the back, allowing instant transfers to and from the account."

      Let's take a pie-in-the-sky view of BitCoin adoption. You can buy anything with it, perhaps even a major retailer like Amazon or Walmart starts taking it. Perhaps you run such a store yourself, and take BTC.

      Come April, you suddenly have a problem - You have a tax burden based on
    • by Hentes (2461350)

      Your money is in the safety of your digital pocket instead of in a bank, and you can transfer it anywhere in the world within a few minutes for a very low cost. The disadvantage is that it's a ponzi scheme.

  • How would these be determined? I'm a little ill-informed about how bitcoin gets converted into "real" money so it seems to me that BitInstant can fiddle with these all it wants in order to maximize its profits.

    • Re:Exchange rates? (Score:4, Informative)

      by retep (108840) on Friday August 24, 2012 @01:44AM (#41105917)

      Like any other tradeable thing: on an exchange. If you don't think the exchange rate BitInstant gave you is fair, it's easy to go to a site like BitcoinCharts [bitcoincharts.com] and look at the spot prices at the time on any of the exchanges in existence for the currency you were converting too. After all, the back-end of BitInstant is just a computer program that automatically submits sell orders as required to meet their float requirements. Buyers then buy the Bitcoins, giving BitInstant fiat currency in return, which they then send to the bank handling the debit card backend via wire transfer.

      The key thing from BitInstant's point of view is to have solid reliable backend software that submits orders fast enough, and statistically understands the volatility well enough, to figure out what instantaneous exchange rate they can make a profit on while still giving a good enough rate that their users don't feel ripped off. This is easy if the price of Bitcoins is rising, but if it's dropping they could easily be in a situation where they give you too much fiat currency for too little Bitcoins. Part of the issue too is that spreads between buy's and asks on Bitcoin exchanges tend to be much larger than you'd find in government-issues currency exchanges, simply because the market is smaller. They're looking at spreads in the region of one percent, rather than hundredths of a percent.

      Ultimately though the process is no different from what your bank does if you use a USD denominated debit card in Europe.

    • by metacell (523607)

      Much like when Americans buy something in Euro with their credit card, or Europeans buy something in US$, in other words. The currencies are automatically exchanged, and the rates are usually a bit worse than you can get at an exchange kiosk. Your bank pockets the difference.

    • by Havenwar (867124)

      I don't think the ability to fiddle with the exchange rates is really something unique to this situation: a common way to get shafted when you travel abroad is that companies allow you to pay in your "home currency" on your credit card, thereby saving you the currency exchange surcharge from your card provider... and instead putting you on the hook for a price calculated with an incorrect exchange rate, giving the vendor or atm a direct profit.

      Also I wouldn't speculate too much about how this would look bec

  • ...as to how many actually use Bitcoin, and how not being either a government-supported fiat currency and also not being specie with some inherent material value it can have value not intensely tied to being a trend.

    After all, we've seen a lot of other essentially worthless things become very valuable, and then crash, and we've even seen valuable things like real estate also crash. In the end, bullion and real estate have tangible value. A string of characters does not, and without the backing of a gov
    • by dadioflex (854298) on Friday August 24, 2012 @01:19AM (#41105799)

      ...as to how many actually use Bitcoin, and how not being either a government-supported fiat currency and also not being specie with some inherent material value it can have value not intensely tied to being a trend. After all, we've seen a lot of other essentially worthless things become very valuable, and then crash, and we've even seen valuable things like real estate also crash. In the end, bullion and real estate have tangible value. A string of characters does not, and without the backing of a government I don't see how it'll work.

      It's identical to any other economic system. Basically, it's Tinkerbell. So long as you believe, everything will be okay...

      • by VortexCortex (1117377) <VortexCortexNO@S ... t-retrograde.com> on Friday August 24, 2012 @01:56AM (#41105971) Homepage
        Clap, clap, clap.
      • Well duh.

        As long as enough people believe in their society, society will still function.

        So why believe in society?

        Because the alternative is far worse.

        Currency is just a subset of this truth.

        Meanwhile, Bitcoin isn't backed by any society. Therefore, it is simply a playground for that perennial sort, the cranks who have a hobbling deficit of trust or faith in anything. Bitcoin is a simply a new ghetto for such age-old types of fringe characters.

        Well power to you crackpots. Have fun with your new toy.

        • by LF11 (18760)

          Bitcoin is very much backed by a society. That society just doesn't happen to be defined by geographical, religious, class, or race boundaries the way most societies in the world are defined.

          No sovereign society backs it? Sounds like a good thing, with sovereign societies self-destructing one by one over this debt fiasco.

          • OK, so when drug and other illicit traffickers take a deeper interest in Bitcoin, and this attracts the negative interest of actual real societies with actual real enforcement capabilities and legal rights to shut servers down, let us see how your virtual society of enthusiasts defends their currency.

            One way you could do that is prevent illicit drug activities. So shut down Silk Road.

            Oh right, this goes against the very libertarian "anything goes" notions that gave rise to things like Bitcoin, so not many a

            • by LF11 (18760)

              I would never wish for the Silk Road marketplace to be shut down. On the contrary, it is through the black market that BitCoin will achieve worldwide penetration. If you use BitCoin to buy pot, then it is not so foreign when suddenly the local farmers' market starts accepting BitCoin as well.

              Your post is very emotional. Are you rabidly anti-drug?

              If we all switch to an anonymous currency BEFORE our fiat currencies break, then we will actually have a chance of not actually reaching the "hungry mobs roaming

        • by TWX (665546)
          On top of that, the Euro, which one could argue is backed by a society but not by a government, is itself having problems even when there is a centralized agency in the form of a central bank attempting to regulate it.

          Spanish "Pieces of Eight" were a defacto world currency, but they had a tangible value.
  • Thank God (Score:5, Funny)

    by tooyoung (853621) on Friday August 24, 2012 @12:58AM (#41105691)
    I hadn't seen a BitInstant story since Tuesday [slashdot.org] so I assumed that it was no more. Thanks for reminding me that I care.

    Well, actually, there was the story on Wednesday [slashdot.org] that was able to keep my hopes up. If you can subtly work a few more BitInstant stories into the next few days, I'll be compelled to get a card and those advertising dollars will have been well spent.
  • If someone makes a product and nobody uses it, does its failure make a sound?

    • Faxes, anyone? (Score:5, Insightful)

      by Okian Warrior (537106) on Friday August 24, 2012 @01:29AM (#41105845) Homepage Journal

      Who bought the first fax machine?

      I mean, the very first fax machines were expensive (around $2000), and the first person to get one had no one to send things to, and no one to receive from. Were fax machines ever really that unlikely to succeed?

      There's lots of things that have value in proportion to the number of people who use it - it's called the network effect [wikipedia.org]. In a few instances (fax machines, telephones, the internet) the value is zero if no (or very few) people are actually using it. That doesn't mean that telephones or fax machines or the internet didn't come into common, everyday usage.

      Is this a valid concern? Should I, as an intelligent adult, claim that something will never be of value simply because no one uses it right now?

      It 'kinda seems like there's a flaw in that reasoning. Wouldn't you be better off with a different argument?

      • In the case of the fax machines, they probably were used internally by their manufacturer, then their manufacturer may have subsidized them for business contacts etc.

        I know for a fact that Ma Bell did a similar thing for phone service; if you worked for them you got free phone service for life. Because of this my grandparents still don't pay anything for their service.

      • Re:Faxes, anyone? (Score:4, Insightful)

        by Dunbal (464142) * on Friday August 24, 2012 @02:37AM (#41106141)
        Fax machines were useful at sending printed material immediately over a phone line. This was a new way of doing things. Bitcoin is trying to replace something that already exists - money, and the electronic form of money in interbank transfers. In order for people to adopt it there would have to be an overwhelmingly compelling reason to do so. So far there are many reasons not to. The bitcoin "crash". The bitcoin robberies. Bitcoin's association with drugs (wait till the governments of the world start regulating this). Yeah, no thanks.
        • by LF11 (18760)

          Everything a fax machine did, you could do before they were invented. Xerox a document, drop it in the mail. In fact, people still do that. Yet fax machines had their place. The "new" thing about fax machines was that you could do it instantly.

          The "new" thing about BitCoin is that it is decentralized, and cannot realistically be regulated or tracked. Do you have any real comprehension how valuable that is, in this day and age? A form of value transaction that cannot be confiscated, tracked, or reporte

          • by tftp (111690)

            The "new" thing about BitCoin is that it is decentralized, and cannot realistically be regulated or tracked. Do you have any real comprehension how valuable that is, in this day and age? A form of value transaction that cannot be confiscated, tracked, or reported?

            No, I do not have such a comprehension. 99.(9)% of the population do not care if their meager salary is tracked or reported - it is already tracked and reported by payroll companies before they even get the check. Noone's money is confiscated ex

            • by LF11 (18760)

              Taxes are always confiscatory. Disagree? Try not paying taxes.

              Confiscation of a BitCoin stash requires that they be able to actually find the account. You can hide $1,000,000 in cash-equivalent BitCoin sewed in the hem of a shirt, or if you are really good, you can memorize it. Try transporting $1,000,000 in actual cash, or gold. It is very hard.

              You acknowledge that police confiscation of cash as "drug money" is bad. BitCoin is becoming a viable answer. Have you ever tried using it?

              cej102937

              • by tftp (111690)

                Confiscation of a BitCoin stash requires that they be able to actually find the account.

                Question #0: "Do you have cash or any other form of money on you or with you?"

                How will you answer? If you lie and say "no" and the Bitcoins are found, it's ungood for your freedom. If you say "yes" then it's ungood for your wallet. I would presume that most people who go to such length to hide their money will say "no" - and that will be just as good for them as it was good for holders of offshore bank accounts who

                • by LF11 (18760)

                  Legally, you are not obligated to tell the truth to a police officer. The answer to the question, "Do you have cash or any other form of money on you or with you?" is, "Are you detaining me, or am I free to go?" At least in the United States, that is the case. Other countries, not so much. If I were carrying more than $500 in cash for ANY REASON, legal or otherwise, I would NEVER admit it to a police officer during a traffic stop.

                  I'm happy that you don't have any reason to use BitCoin. BitCoin is a way

      • Here's one real-life example. I purchased two fax machines--one for myself, and one for my brother who was in high school at the time. Since I lived 2000 miles away, it was a lot easier helping him with geometry homework--he would draw the diagrams and fax them over. Doing geometry over the phone was painful. (Note: This was years before Skype and all that other shit.) I'm sure businesses found faxes useful from the outset.
      • by retep (108840)

        Who bought the first fax machine?

        If anything, BitInstant's paycard is an attempt to avoid this problem by giving you a way to easily spend Bitcoins with people who haven't adopted it. If they can eventually find a way to somehow allow you to deposit funds from a bank machine onto the card in the future, even better.

        What they're doing is kinda like an early fax machine company setting up a nice fax-to-postal-mail service. Imagine being able to skip days of letter delivery overseas by simply faxing an office in the same country and city as y

      • Nope. I felt that one stands on its own. Unlike a fax machine this has no practical use, particularly since it negates the one potentially redeeming aspect of bitcoins. It's a product from someone who give his interviews on an irc channel, designed to meet a need that isn't held by anybody.

        Of course he should try it - we should always try things, it's how progress happens - but he's not terribly likely to succeed with this one.

      • Is this a valid concern? Should I, as an intelligent adult, claim that something will never be of value simply because no one uses it right now?

        No. But as a soi-disant "intelligent adult" one should recognize the difference between something that no one is using now, and something that no one (or at least very few) has any compelling reason to use. Telephones, fax machines, and the internet all provided new and useful ways of doing things - which exactly utterly unlike Bitcoin.

  • by Penurious Penguin (2687307) on Friday August 24, 2012 @01:13AM (#41105769) Homepage Journal
    Some very talented folks I once had the pleasure of meeting just went out of business. They had formed Bitcoin Harbor [bitcoinharbor.com], an exchange for buying and selling items strictly in bitcoins. I suspect the undue lack of popularity for bitcoin is to blame, but there has been some pretty fierce efforts against bitcoin which might also influence the stagnation of what I consider a great system. One example of government hostility against alternative currencies I think is no better illustrated than in the case of Bernard von NotHaus [boilingfrogspost.com].

    Some fear the forced introduction to a "cashless society", and maybe I do as well. However, If such is the unavoidable future, I'd rather it be in bitcoin. It's peculiar the vehement government defense of what might reasonably be considered amongst the most unstable and fantastical currencies in the world, in contrast to their hostility toward arguably less deformed competitors. When speculation suggests bitcoin may be more worthy of confidence than the euro [zdnet.com], I pay at least one ear of heed. But when Alan Grayson asks Lord Ben where $500,000,000,000 [youtube.com] went and he can't reply, I reach for my Adult Depend Undergarment.
    • by dadioflex (854298)
      I find your ideas fascinating and your argument compelling. I have one question. We speak of the value of Bitcoin, but relative to what? If the other cash systems collapse and only Bitcoin is left, will it be traded relative to its worth in goats or chickens?
      • That's a pretty butch question. In my current state, I'd have trouble answering it with any chance of respectful reception. What I can say immediately, is how the bloody hell is the current system going to hold? I also don't believe bitcoin has reached maturity yet. Like a beaten and resented prodigy, it's growth has been hindered by various factors. Maybe the way it would work under such circumstances is a matter of additional innovation, adaptation, or redesign. I hope it never comes to that, but if it do
      • by retep (108840) on Friday August 24, 2012 @02:20AM (#41106071)

        Really the value of Bitcoin is based on the velocity of money, and speculation. The latter is just a matter of supply and demand, it's the former that's more interesting. Suppose Alice, in the USA, wants to transfer value to Bob, who lives in Germany, using Bitcoins. The actual exchange of value is going to look like this:

        • Alice gives Charlie, who runs an exchange, some US dollars. Charlie gives Alice some Bitcoins.
        • Alice sends her Bitcoins to Bob.
        • Bob gives Dan, who also runs an exchange, his new Bitcoins, and Dan gives Bob Euros.

        Now if this goes on over and over again, Charlie is going to be short of Bitcoins, and Dan short of Euros. So on Charlie's exchange the price of Bitcoin relative to the US dollar will rise, and on Dan's exchange, it'll fall. Enter Anna, are arbitrage trader:

        • Anna sells US dollars on the Forex market, buying Euros.
        • Now Anna wires those Euros to Dan's bank account in Germany, and Dan gives Anna Bitcoins
        • Anna then gives Charlie Bitcoins, getting US dollars back.

        Why didn't Alice just wire Euro's? Well, bank wires have high fixed fees, so Anna can amortize the fees over one huge wire transfer in a way that Alice can't. Also, Anna doesn't care if either side know who she is, but Alice might.

        The key thing is that all these steps take time, which means Bitcoins are tied up in the system, reducing the supply. So by basic supply and demand, the price goes up, based on how useful it is to use Bitcoins to transfer value between people, and how fast the whole process can happen. Some people find them very useful to do this, especially pseudo-anonymously, notably the drug trading site Silkroad. Note how curiously a more efficient Bitcoin market, in terms of fiat conversion, will lead to a lower Bitcoin price.

        The key thing is that Alice and Bob don't actually care that much what the price of Bitcoin relative to other currencies is. They just care that the price doesn't change fast enough that one side or the other gets ripped off during the time it takes to complete transaction. The faster those transactions happen, the less of an issue this is. If either side can quickly buy and sell their coins, something made easier by things like BitInstant's new paycard, they don't have to worry about exchange rate volatility as much. And speaking of, while people in the US don't have this problem, ask someone in, say, Iceland, with its tiny economy and its own currency, how stable the value of the Krona is relative to other currencies...

        As for what happens if cash systems collapse... frankly if that's true, chances are something is seriously wrong with society. If the internet is still functioning Bitcoin might still be working well enough as a technological project that your coins are going to be worth something. If the internet isn't work, well, you're coins are going to be worthless because people can't transfer them. Of course, if you're in such bad straits that what you really want is goats and chickens, you might also quickly find out that you can't eat gold...

    • by Telvin_3d (855514)

      there has been some pretty fierce efforts against bitcoin which might also influence the stagnation of what I consider a great system.

      Of course stagnation is setting in. Bitcoins have a fixed supply and thus are a deflationary currency. They were designed that way. It's one of the biggest reasons all the economists snickered when they debuted. Deflationary currencies always result in hording, which is never a desirable feature for a currency system.

      So it's been interesting to watch the competing pressures. The natural tendency for a fixed supply currency to rise versus the growing realization that they are backed by nothing but the promis

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Of course stagnation is setting in. Bitcoins have a fixed supply and thus are a deflationary currency. They were designed that way. It's one of the biggest reasons all the economists snickered when they debuted. Deflationary currencies always result in hording, which is never a desirable feature for a currency system.

        No, it's not a desirable feature for an economy. If Bitcoin's main use is transferring value from one person to another, the actual value of Bitcoin at any one time is irrelevant, so long as it's stable over however long the whole transaction takes, from fiat, to Bitcoin, back to fiat. The Bitcoin hoarders can have their fun; the people buying drugs on Silkroad aren't going to care. It's getting turned into fiat currency at the other end anyway.

        An economy using only Bitcoin as currency would have serious st

    • by makomk (752139)

      Bernard von NotHaus issued silver coins stamped with face values in dollars that looked really similar to genuine US-issued currency, was encouraging people to pass them off as US dollars in stores, and sold them to his members at a substantial discount to the face value (though still more than the actual value of the silver they contained). He even thought it would be a good idea to pass one off to an unsuspecting store clerk on camera in a TV interview, describing it to her as "the new dollar". It's not e

      • "....It's not exactly surprising that he was done for counterfeiting."
        Counterfeiting might be fair enough. From what I remember though, he was accused of terrorism. I know it's the new pidgin Swiss Army Knife of fascism, but to me, gross usurpation of our language is far more terrifying than dubiously minted coinage. His coins were measurably different from any official currency, and none could be used in any conventional machines. I wonder how the value of Bernard's silver would compare to something like
    • One example of government hostility against alternative currencies I think is no better illustrated than in the case of Bernard von NotHaus.

      The problem with your theory - is that it relies on pretending the the many legal alternative currencies that exist free of "government hostility" simply don't exist. The reality is, so long as your alternative currency complies with the law - you'll have no problems. Liberty Dollars didn't comply with the law.

    • by Goaway (82658)

      Some fear the forced introduction to a "cashless society", and maybe I do as well. However, If such is the unavoidable future, I'd rather it be in bitcoin.

      Because you'd rather be traceable by everytone, rather than just by your bank?

      • The banks are pretty generous with your information and I am not yet convinced who's the bigger bogeyman -- the people or the gub. With the way things are going, it might be a good idea to have someone else other than gub peering in, if not just to have a witness. And hey, if it's traceable by everyone, then it'll be just like eBay. Wait, a second...
        • by tftp (111690)

          The banks are pretty generous with your information and I am not yet convinced who's the bigger bogeyman -- the people or the gub.

          The set of all people contains the set of the government people. Therefore Bitcoin transfers are traceable by the government and by anyone who wants to know. Bank transfers are traceable only by the government. You have more privacy with banks - and you don't have the illusion of anonymity with banks.

          it might be a good idea to have someone else other than gub peering in, if

  • by Kenja (541830) on Friday August 24, 2012 @01:14AM (#41105777)
    All of the issues with a non-backed currency that no one trusts PLUS the lack of anonymity associated with a major credit card!
    • by retep (108840)

      Currencies aren't really backed by anything these days, other than the fact people in certain economic regions generally use a given currency.

      All this stuff about governments backing currencies by accepting them as taxes ignores one critical thing: How does the government decide how much to take? Suppose you were in Canada, running a business happened to accept US dollars exclusively from your customers, and at the same time happened to have all your expenses in US dollars. (quite easy to do with an cloud-u

  • by retep (108840) on Friday August 24, 2012 @01:24AM (#41105819)

    Specifically one re-loadable with Bitcoins.

    From what BitInstance has said it either works by simply converting your BTC into USD or some other currency when you deposit the BTC to the address on the card, or they've done some clever thing where they convert the appropriate amoun of the BTC balance associated with the card it as you make a transaction. (depositing the currency to the actual account associated with the card just in time for the payment to go through) Credit is never offered.

    Of course, this is why they don't really need much help from Mastercard: the technology powering the card is already common for branded payment cards like those ones you can get to give as gifts, just without the crazy fees and with a much more reasonable %1 currency conversion fee and the flat $10 or so fee to buy the card. That conversion fee being pretty similar to what you'd pay at a regular bitcoin exchange anyway.

    Ultimately this is like Paypal's debit card: just an easy way to spend your Bitcoin balance. If you happen to have a lot of coins for whatever reason, be it you run a business, mine, or invest in them, this card might be for you. Otherwise don't complain that a niche product doesn't make sense for you.

    From a security point of view it's a very easy product to offer. When Bitcoins are sent you can almost guarantee the transaction has gone through, no charge-backs, after one confirmation, or an average of 10 minutes. That rises to essentially guaranteed after six confirmations. (I'm pretty sure no-one has ever managed an actual double-spend with even one confirmation) The rest of the process is subject to the exact same risks as any other pre-paid debit card, hence the transaction limits they've said they'll apply of something like $1000 a day. Basically they just want to limit losses if someone steals/clones your card, or they screw up somewhere.

    • by Animats (122034)

      Specifically one re-loadable with Bitcoins.

      No, probably one re-loadable from Bitcoins.

      What they're probably going to have is a dollar-denominated debit card. The "Bitcoin" feature will probably just be some way to sell Bitcoins on some exchange and have the dollars credited to the account behind the card. One question is how fast, how reliable, and how non-reverseable the Bitcoin to dollars transactions are. Another question is who stands behind the dollar balances stored in those cards. Is there a separate account in a real bank for each card,

      • by retep (108840)

        As I said, the currency conversion could work either way. It'd be easiest doing it the way you describe, however a big part of BitInstant's other business doing fiat-Bitcoin conversions is that they have good mechanisms to complete the conversions as fast as possible with accurate pricing. This may enable them to do the conversion fast enough that they'd somehow load the dollar balance on the card as you attempt to spend it. Effectively they'd intercept that "over-spent" notification somehow in the computer

    • From what BitInstance has said it either works by simply converting your BTC into USD or some other currency when you deposit the BTC to the address on the card, or they've done some clever thing where they convert the appropriate amoun of the BTC balance associated with the card it as you make a transaction. (depositing the currency to the actual account associated with the card just in time for the payment to go through) Credit is never offered.

      Which leads to the question... where does the USD (or Euro,

  • What is currency? (Score:5, Interesting)

    by circletimessquare (444983) <[moc.liamg] [ta] [erauqssemitelcric]> on Friday August 24, 2012 @02:52AM (#41106213) Homepage Journal

    Something like the Dollar, or the Euro, or the Renminbi is backed by a standing army and a society with a functional government and a banking industry. Governments and banking industries that engage in shenanigans and with horrible screw ups that test the patience and faith and trust of all of us. But I still trust in actual social institutions that actually represent the value behind an actual currency, then some protocol for fringe types who don't trust anyone or anything.

    Bitcoin is not the dawn of a new stateless economy. Bitcoin is the dawn of a new ghetto for the kind of person with a high level of distrust in society. Distrust not born of actual experience, but the kind of distrust that is a function of that person's personality issues. Such people will always exist. I'm glad the Internet and some dude with a Japanese pseudonym have given them a new toy to exert their prodigious antisocial energies on.

    Enjoy, fanboys, but please don't imagine your alternacurrency has more meaning than it actually does. It's a project for you to waste your antisocial frustrations on. Good for you. All hail the small but growing psychosocial ghetto called Bitcoin.

    There are just people in this world with a hobbling deficit of trust in any social institution. Considering how the banksters have screwed up over the last decade, some of that distrust is earned. But there never is, and never will be, an alternative to an actual, real, social institution, no matter how badly it is mismanaged. The problem is in not understanding that, not understanding that your currency has to be backed by SOMETHING. Some people are just too antisocial to understand this.

    So let the fools exert their energies on Bitcoin if it provides a harmless waste of time for them. This alternacurrency ghetto will bubble and pop and limp along, and eventually peter out into obscurity if and when someone responsible is actually able to take hold of our broken and mismanaged financial system.

    Either that, or drug traffickers and other illicit activities will glom onto the idealistic fanboy's new toy, and then the authorities will go after Bitcoin ONLY FOR THAT REASON. But the paranoid crackpots will claim this is proof the state is out to crush anything good in this world, when the simple truth is there is always a lot of ugliness in this world, but there is a heck of a lot more ugliness without a strong government. Sorry fanboys.

    • by shurdeek (571257)

      Claiming that national currencies are "backed" by the state is one of the more popular economic fallacies. Currencies work due to the network effect, not due to "backing". If the parameters of the network negatively change (e.g. the critical mass increases or people leave because there is a sufficiently good substitute), the currency will collapse. No amount of "backing" by the state can avert that. The maximum it can do is to attempt to prevent people from leaving, but that might not be enough. All the cou

      • well said. except for the fact that fiscal policy is an important part of a functioning modern state. therefore, any attempt to create a fiscal system that the state cannot control represents a threat to the state. especially as Bitcoin attracts the interest of illicit activities

    • by ultranova (717540)

      So let the fools exert their energies on Bitcoin if it provides a harmless waste of time for them. This alternacurrency ghetto will bubble and pop and limp along, and eventually peter out into obscurity if and when someone responsible is actually able to take hold of our broken and mismanaged financial system.

      Yet here you are, expending your time and effort in an attempt to discredit it, in direct contradiction to your own statements.

      This is the strongest evidence for the viability of Bitcoin: that so many

      • i'm not afraid of it. why the hell would i be afraid of it? i think it is stupid. am i allowed to think Bitcoin is stupid? do i have your permission? no?

        not being able to think Bitcoin is stupid is the strongest evidence for the lack of viability of Bitcoin: that so many fanboys can't and won't see that the emperor has no clothes

        • by ultranova (717540)

          i'm not afraid of it. why the hell would i be afraid of it? i think it is stupid. am i allowed to think Bitcoin is stupid? do i have your permission? no?

          I have no idea why you're afraid of Bitcoin. That you are is pretty evident from your earlier post and your aggression here.

          not being able to think Bitcoin is stupid is the strongest evidence for the lack of viability of Bitcoin: that so many fanboys can't and won't see that the emperor has no clothes

          There are people who think Bitcoin is not stupid, there

          • you think i'm afraid of bitcoin, therefore, i am afraid of bitcoin.

            i think you are wearing a pink tutu. therefore, you are wearing a pink tutu

            hey, thanks for the logic lesson

  • by Rogerborg (306625) on Friday August 24, 2012 @04:45AM (#41106663) Homepage

    Please provide us with debit cards loaded with $USD. In return for that, we will give you some Magic Beans which you can trade anonymously for a wide variety of goods and services, such as drugs and handjobs and... more drugs.

    You know, I started typing that sarcastically, but given that it's bankers we're talking about, they might actually go for that.

    • by shaitand (626655)

      Bitcoin can be traded for drugs, hookers, euros, dollars, bribes, and gift cards for most major vendors. The biggest limitation is the technical skills needed to use bitcoin effectively and to access something like Silkroad. A card like this makes it extremely easy to run small amounts of cash through bitcoin. Now you can have an easy way to pay for classified items off craigslist and the like. Not to mention an easy way to pay loaned money or send money to little timmy. You can give your kid his lunch mone

    • variety of goods and services, such as drugs and handjobs and...
      Does anybody know the exchange rate for Applebees' appetizers to Bitcoins? I may need to do some arbitrage or I've been over paying for handjobs.
    • by tftp (111690)

      Sarcastically or not, but that's exactly what the founders of Bitcoin ("minters") got away with. They calculated a bunch of numbers and then found, through Slashdot and the like, enough gullible idiots who gave them real money in exchange for the numbers.

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