Support cryptocurrency (Bitcoin, Litecoin, Dogecoin) as a payment method

[matin]

Jon Matonis has requested that Balanced support Bitcoin as a payout method.

EDIT by @steveklabnik:

Because there has been a cambrian explosion of cryptocurrencies, and they're all basically forks of bitcoin, supporting any of them has basically the same issues that supporting bitcoin does. And since supporting Bitcoin inherently means multi-currency support, I'm broading this issue to any cryptocurrency, though obviously Bitcoin is the most important.

[mahmoudimus]

Interesting to see what the community thinks of Bitcoin as a payout method strategy. Interesting to explore the opportunities, would love to hear your comments.

We're also trying to understand the risk with operating bitcoins. For example, with ACH we can reverse a direct deposit, however, how does pulling back money work with Bitcoin?

[jkwade]

Someone posted Jon's article on HN: http://news.ycombinator.com/item?id=4832780

[sebicas]

I really support Bitcoin as a payout option... +1 for Bitcoin

[pelle]

@mahmoudimus Bitcoin does not do reversals. See my post here on the dangers of mixing bank related payments with BitCoin. http://stakeventures.com/articles/2012/03/07/the-may-scale-of-money-hardness-and-bitcoin

It could be done using a delayed payout schedule, where Balanced sits on all or part of the funds for certain amount of time.

[mahmoudimus]

@sebicas What's your use case for Bitcoin?

[mahmoudimus]

@pelle Balanced offers an implicit escrow solution where the marketplace can hold the funds for a time of their choosing.

So, the delayed payout schedule is something already supported by Balanced.

Going to read your article now.

Thanks!

[JulianTosh]

+1 for bitcoin payouts!

[sebicas]

@mahmoudimus I am working in a project for a client who wants to accept Bitcoin into his Shopping Cart. For that we decided to use BitPay.com, which is it simple, but the problem is that we were limited just to Bitcoin.

The client also needs to accept credit cards, implement payments to affiliates, etc... so we ended up having to also integrate with a CC Merchant Account and a ACH Payment Procesor too.

In short we need to integrate with 3 different providers... it you would give us the option of Bitcoin I would have solved the problem with just one integration.

Does that answer your question?

[mahmoudimus]

Interesting - FBI internal risk assessment of Bitcoin

How authentic is this file?

Most importantly is this section: (U) Outlook and Implications.

(U//FOUO) Although Bitcoin does not have a centralized authority, the
FBI assesses with medium confidence that law enforcement can discover
more information about, and in some cases identify, malicious actors,
if the actors convert their bitcoins into a fiat currency. Third party
bitcoin services may require customers to submit valid identification
or bank information to complete transactions. Furthermore, any
third-party service that qualifies as a money transmitter, and
therefore a MSB, must register with the FinCEN and implement an
anti-money laundering program.

[pelle]

@mahmoudimus that sounds like a good base for it. I'm a big fan of BitCoin but don't want to see merchants, consumers or payment processors get burnt. I'd be happy to discuss this further offline.

[kirillzubovsky]

Would be really useful for us, in order to pay international merchants. As long as there is an easy way to set it up on the merchant side. So far, bitcoin is a bit confusing for people. Make the "virtual money" into "real money" transition easy, and we are definitely using it!

[pelle]

I believe the file is authentic. As long as you provide the same level of KYC you do for your regular customers for bitcoin customers there shouldn't be any issue from a regulatory point of view. BitCoin is completely transparent with a public transaction history. I'm confident the FBI or NSA already have a full real time bitcoin database.

[ajsharp]

We're also trying to understand the risk with operating bitcoins

Understanding the risk of supporting bitcoin is fairly straightforward -- bitcoin is a speculative investment masquerading as a currency.

@mahmoudimus You hit the nail on the head with your last comment, and is one of the primary reasons that bitcoin should be considered as speculative as say, gold -- "Although Bitcoin does not have a centralized authority...". Having a "centralized authority", e.g. a central bank, is a key property of a modern currency.

Personally, I'd much prefer balanced support international currencies before bitcoin.

[kirillzubovsky]

Check out http://coinbase.com - maybe they can do all the operating, while you can plug into the API.

[mahmoudimus]

Referencing #44