[2020-10-23]PayPal is eyeing a BitGo purchase

gentlemand

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Quote from: bbc.reporter on October 27, 2020, 11:45:26 PM

It would be very difficult for mindless druggists to mistake bitcoins in Paypal from the real bitcoin unless there is a mindless vendor that accepts bitcoins in Paypal payments.

Yup. There'll be plenty of them too. Paypal attracts scum wherever consciousness exists. This will pull in more of it. It'll really ramp up when you can withdraw the real deal which is why it may never happen.

bbc.reporter

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Quote from: gentlemand on October 27, 2020, 10:28:47 AM

Quote from: cr1776 on October 27, 2020, 09:50:40 AM

I don't see why people would use PayPal as it is now to purchase bitcoin since it is locked into PayPal. Hopefully they correct that issue eventually, but if they do, that is when I'd worry about the "frozen account" issue if someone sends it to an unapproved web site directly from PayPal. e.g. gambling or some site that someone doesn't allow.

Let's hope adoptees don't get their messages mixed. I can well imagine mindless druggists logging into Paypal thinking 'oh wow, no one can stop the bit coin, right?' and then lasting a few seconds before their door is booted in.

It would be very difficult for mindless druggists to mistake bitcoins in Paypal from the real bitcoin unless there is a mindless vendor that accepts bitcoins in Paypal payments.

squatter

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Quote from: gentlemand on October 24, 2020, 07:01:14 PM

No custodian is insured as far as I know. No insurer will do it. Certain places like Coinbase have insurance but only for their hot wallets.

I was researching BitGo and noticed they do provide a $100 million insurance policy where they act as qualified custodians, with the option to upgrade to a $500 million policy. This applies to cold storage.

Quote from: buwaytress on October 26, 2020, 07:52:13 AM

Still anybody's guess what happens if every Bitgo customer requests a withdrawal.

I know BitGo is quite significant in terms of network transactions, but I would be very curious to know how much is actually in their sole custody. They do lots of multi-sig arrangements with their clients, especially exchanges, and they also offer self-managed custody where they only set up client infrastructure including BitGo API, but have nothing to do with custody itself.

cr1776

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Quote from: gentlemand on October 27, 2020, 10:28:47 AM

Quote from: cr1776 on October 27, 2020, 09:50:40 AM

I don't see why people would use PayPal as it is now to purchase bitcoin since it is locked into PayPal. Hopefully they correct that issue eventually, but if they do, that is when I'd worry about the "frozen account" issue if someone sends it to an unapproved web site directly from PayPal. e.g. gambling or some site that someone doesn't allow.

Let's hope adoptees don't get their messages mixed. I can well imagine mindless druggists logging into Paypal thinking 'oh wow, no one can stop the bit coin, right?' and then lasting a few seconds before their door is booted in.

Yeah. If I were a conspiracy theorist, I might think that is the goal given the way that PayPal has restricted it. Get people in and then turn them off to it. I know some people aren't that dumb to be fooled, but enough?

On a related note, my cousin (finally) asked me about it a few months ago even though I had initially discussed it with him Thanksgiving of 2010. He was going to do it "eventually" with Coinbase. You can lead a horse to water but can't make him drink. Then when the PayPal news broke he said "So, I guess PayPal is even an easier way to buy bitcoin?" I had to tell him (a) as of now it isn't transfer it out of there except by selling, and (b) if you don't have the private keys you are merely a creditor. Coinbase at least he could buy and then transfer out eventually.

PayPal will be a reasonable option once they allow outbound transfers. Who knows if/when that will be.

gentlemand

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Quote from: cr1776 on October 27, 2020, 09:50:40 AM

I don't see why people would use PayPal as it is now to purchase bitcoin since it is locked into PayPal. Hopefully they correct that issue eventually, but if they do, that is when I'd worry about the "frozen account" issue if someone sends it to an unapproved web site directly from PayPal. e.g. gambling or some site that someone doesn't allow.

Let's hope adoptees don't get their messages mixed. I can well imagine mindless druggists logging into Paypal thinking 'oh wow, no one can stop the bit coin, right?' and then lasting a few seconds before their door is booted in.

cr1776

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Quote from: Sithara007 on October 23, 2020, 11:12:00 PM

PayPal is the first corporation to realize that cryptocurrency will be a big thing in the future, especially in the finance sector. BitGo is not a very large sized firm, and I suspect they are going after it as a test run. If the acquisition is successful, then they may acquire larger crypto businesses. And one more thing. I won't be surprised if PayPal acquires one or two major cryptocurrency exchanges in the distant future, and merge them with their main platform.

There were quite a large number of corporations who realized it years ago. Overstock, Newegg, Coinbase, Grayscale among many others. Acquisitions are important for some of the smaller companies to get funding to grow which should help the entire ecosystem.

And DooMAD - i think you are right about the "PayPal froze my account" stuff...no doubt that will happen.

I don't see why people would use PayPal as it is now to purchase bitcoin since it is locked into PayPal. Hopefully they correct that issue eventually, but if they do, that is when I'd worry about the "frozen account" issue if someone sends it to an unapproved web site directly from PayPal. e.g. gambling or some site that someone doesn't allow.

DooMAD

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Quote from: philipma1957 on October 23, 2020, 06:09:30 PM

WHAT do you think adaption is going to be like?

I think it's going to look like people posting endless topics here on the forums something along the lines of:

"Bitcoin sucks because PayPal froze my account"

And then a thousand replies completely lacking in sympathy telling them that it's their own stupid fault for doing it wrong.

Calling it now. Cheesy

buwaytress

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Quote from: gentlemand on October 25, 2020, 07:22:42 AM

You learn summat every day. In that case I wonder why Coinbase haven't pursued something similar. And I wonder how much more than $100 million Bitgo have under their control.

I remember even back in 2018/19 when Japan began kicking in regs for exchanges there and also S Korea last year, they were a few old insurers lining up to cut deals (licensing would have required partial insurance), and Gemini as well I remember had been in long negotiations (and malevolent's post suggests they were successful), so yeah, them big boys got their finger in pies.

There've been some discussions on that $100M insurance and I recall some claims that it's -per- instance of claim, but that is not nearly enough for a single hack that steals everything, if it's true that they collectively custody for over $1 billion in 2017 (assuming that was at ATH, and they haven't taken on more, that's still $650M today). Still anybody's guess what happens if every Bitgo customer requests a withdrawal.

bbc.reporter

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Quote from: squatter on October 23, 2020, 05:17:23 PM

Quote from: Daltonik on October 23, 2020, 08:08:36 AM

Payment company PayPal is considering options for absorbing cryptocurrency companies to expand its product line. Among them is the BitGo custodian, Bloomberg reports, citing knowledgeable sources.

This is a big deal. BitGo is a giant in the institutional custody space, probably the largest after Coinbase. Some of the world's biggest exchanges are their clients. They also launched an institutional trading service earlier this year, although I'm not sure how much traction it has gained.

With PayPal's existing customer and merchant base, they're already positioning themselves to be a giant in the Bitcoin exchange and payment processing industries. If they absorb BitGo on top, they could be right up there with Coinbase in terms of overall industry influence and market share, almost overnight.

I don't love it, if I'm being honest.

Agreed. This will begin to be more dangerous for our freedom on the internet when more people begin to depend on 3rd parties to hold and use their bitcoins. This will give them the power to terminate you from making your online payments which bitcoin was supposed to fix.

Do not deposit or buy your bitcoins in Paypal.

malevolent

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Quote from: gentlemand on October 24, 2020, 07:01:14 PM

No custodian is insured as far as I know. No insurer will do it. Certain places like Coinbase have insurance but only for their hot wallets.

Googling 'bitcoin vault insurance' does yield some results, e.g. Ledger Vault with $150M insurance fron Marsh/LLoyd's, crypto.com is insured for $360M, Gemini is insured for $200M and Bittrex is insured $300M. The latter two have the same underwriters as Ledger. Xapo and Elliptic also used to have some sort of insurance but I think that may now be a thing of the past.

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Quote from: squatter on October 23, 2020, 05:17:23 PM

This is a big deal. BitGo is a giant in the institutional custody space, probably the largest after Coinbase. Some of the world's biggest exchanges are their clients. They also launched an institutional trading service earlier this year, although I'm not sure how much traction it has gained.

With PayPal's existing customer and merchant base, they're already positioning themselves to be a giant in the Bitcoin exchange and payment processing industries. If they absorb BitGo on top, they could be right up there with Coinbase in terms of overall industry influence and market share, almost overnight.

I don't love it, if I'm being honest.

Right now really don't have any choice and also we can't really do nothing about it, I have the same feeling when Binance has been taking over crypto companies left and right and most recently CMC but them monopolizing the market is something that we can't really do anything about it. My perspective on Paypal entering the crypto industry is they might be a game changer when it comes to mass adoption as long as they have a plan on integrating Bitcoin in their main payment system, if they manage to pull of this kind of feature I think it will get a lot of new interest as well as the existing ones to use their cryptocurrencies more as the acceptance of Paypal as a payment method is globally recognized.

gentlemand

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Quote from: buwaytress on October 25, 2020, 06:55:30 AM

BitGo (and in turn, their clients) makes quite a big deal of them being insured by LLoyds.

You learn summat every day. In that case I wonder why Coinbase haven't pursued something similar. And I wonder how much more than $100 million Bitgo have under their control.

buwaytress

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I'm not sure a lot of BitGo clients would be happy with this. Can't rattle off the names of all the companies I know who've taken BitGo solutions but some of them are pretty anti-banking (though ironically, willing to trust a company with vaults in mountains with their private keys) but will certainly be interesting to see how PayPal rebrands or redirects its marketing for *this* pivot.

Quote from: gentlemand on October 24, 2020, 07:01:14 PM

No custodian is insured as far as I know. No insurer will do it. Certain places like Coinbase have insurance but only for their hot wallets.

That being the case the only insurance you can get is buying somewhere that already knows how to store coins securely.

BitGo (and in turn, their clients) makes quite a big deal of them being insured by LLoyds.

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Quote from: slaman29 on October 24, 2020, 06:46:17 AM

I wonder why they don't just use their own custody, and then just take out insurance. Why pay someone else to do the same thing I wonder?

They are still new in the crypto game.

It's much considerable if they'll just purchase a known bitcoin-service company and establish themselves with it. These how a huge company works, if they are going to rebrand their company it will just cost the same amount or even more because they need to create a process on their own but they haven't acquired any new partner or company.

But by doing this, it's gain for them and it's easier to continue the business.

gentlemand

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Quote from: slaman29 on October 24, 2020, 06:46:17 AM

Basically, any big corporate probably considers Bitgo as a first option, I guess. I mean, it seems that every big corporate company who ever gets into crypto seems to partner with bitgo.

I wonder why they don't just use their own custody, and then just take out insurance. Why pay someone else to do the same thing I wonder?

No custodian is insured as far as I know. No insurer will do it. Certain places like Coinbase have insurance but only for their hot wallets.

That being the case the only insurance you can get is buying somewhere that already knows how to store coins securely.

malevolent

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Quote from: slaman29 on October 24, 2020, 06:46:17 AM

I wonder why they don't just use their own custody, and then just take out insurance. Why pay someone else to do the same thing I wonder?

It must have made more sense to them financially or in the long run, buy someone else's solution (maybe IP?), rather than experiment with reinventing the wheel and potentially lose time and/or money.

slaman29

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Basically, any big corporate probably considers Bitgo as a first option, I guess. I mean, it seems that every big corporate company who ever gets into crypto seems to partner with bitgo.

I wonder why they don't just use their own custody, and then just take out insurance. Why pay someone else to do the same thing I wonder?

acquafredda

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If we take the funding of developers and this paypal news into perspective I think I could understand what are philipma1957 main concerns. It seems inevitable now that those financial behemots will want to sit at the bitcoin table: we can only do one thing to keep them afar which is to hold our coins, taking them off the exchanges and let the price really reflect bitcoin's real value.
Let them pay those coins a lot: remember its only a finite number.

Sithara007

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PayPal is the first corporation to realize that cryptocurrency will be a big thing in the future, especially in the finance sector. BitGo is not a very large sized firm, and I suspect they are going after it as a test run. If the acquisition is successful, then they may acquire larger crypto businesses. And one more thing. I won't be surprised if PayPal acquires one or two major cryptocurrency exchanges in the distant future, and merge them with their main platform.

philipma1957

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Quote from: hatshepsut93 on October 23, 2020, 07:17:00 PM

Quote from: philipma1957 on October 23, 2020, 06:09:30 PM

The worst case is they all come in and kill it off.

How would they do it? Bitcoin is not a proof of stake shitcoin, where owning coins gives you voting power, and even mining doesn't give you voting power, and strictly speaking, there's no such thing as voting power in Bitcoin, even node count doesn't count as such. At worst they'll try to mess with it in a way SegWit2x tried, which I'd like to remind everyone, was backed by big names like Coinbase and Bitmain and BitPay. But Bitcoin users rejected it, so they have failed. If PayPal and all these big players will try to takeover Bitcoin, the Bitcoin community will simply reject it.

they could .

but I prefer they don’t.

Topic: [2020-10-23]PayPal is eyeing a BitGo purchase (Read 292 times)