Topic: Using Bitpay (Read 2116 times)

The solution is a well designed database system, like how large players such as mtgox do it.

Probably because stacking up a Bitcoin wallet with tens of thousands of addresses really does slow it down (I've tried it, and it was basically unusable by the time I got to 150k).  If Bit-pay is planning to scale to whatever volume they can acquire (which I hope they would), it would make sense for them to reuse addresses to avoid bogging down their bitcoind processes.

A better solution would be to throw away addresses once they are used and no longer contain any BTC, but the default client doesn't allow for that, and there's always the chance that someone might accidentally resend some BTC to that address - that'd be one reason I would want to keep it on hand forever, anyway!

I couldn't find a general Bit-Pay support thread, but this has the right title so I'll post my inquiry here.

From another thread:


You say it is unique but it appears that Bit-Pay is re-using bitcoin addresses.  

I just made a payment, and when I checked to verify that the payment had confirmed, there were several previous, older transactions to that address.

This seems odd to me.  One reason why includes how this re-use of a bitcoin address might be confusing to someone new to bitcoin.  The recommendation given to someone trying to see if the payment "went through" is generally first to look up the address and see if it shows a payment.   If there are prior transactions for an address then the user might become confused.

Another reason this seems odd is because this is lessons privacy.  Because I now know this address is used by Bit-Pay, I can probably conclude accurately that the other half dozen payments to that address were payments to Bit-Pay as well.

New receiving addresses are pretty cheap to acquire (free, actually) so I don't understand why address re-use would be performed.

Gotcha.  I completely misunderstood where you were going with that.

No, I meant: as a buyer I had 15 minutes time to sent my BTCs at a pre-calculated exchange rate to complete the payment. The same time Bit-Pay takes the risk for fluctuating BTC/USD rates. I as a buyer would be fine with this rate being guaranteed for 5 minutes, if I'm really that slow it's ok to get an updated BTC amount every 5 mins. I'd personally feel this quite acceptable, while it reduces Bit-Pay's currency risk significantly.

As a buyer using bit-pay, your payment is confirmed in seconds.

Ah, thanks for the clarification. Less than 3% in total fees for sure is still cheap. Plus still risky for you in times of high volatility (like we currently have).

Detecting someone is attempting to get a free 15-minute put option is not preventing it, or? At least I did not read anything about being not allowed to cease and repeat the payment process when I paid the subscription to the Bitcoin Mag (to get back on-topic). Anyhow, waiting BTC/USD to tank for 4% within 15 minutes is not promising enough to try getting rich  .

As a final note: as a buyer, I think the 15-minute acceptance period is way to long. Even if I had to first power on my wallet keeping computer to make the transaction, I feel like 5 minutes should be enough. In rare cases where it might not be, I as a buyer had to accept a re-calculation of the BTC amount.


Cheers

I found using the Bit-Pay system to purchase Bitcoin Magazine a simple, professional and pleasant experience. It was my first purchase of anything with Bitcoins. Copy and pasting a Bitcoin address takes a lot less time and effort than entering a credit card number, cv2 codes, and in many cases having to re-enter the address and phone number etc. The big plus of course is for the many people who do not have have a credit card. The latter by the way is a huge untapped market in eCommerce for Bitcoin. One thing I must add is that for a merchant entering transactions into their own shopping cart in an attempt to "game" the system is a big no-no with the competition and will cost the merchant their merchant account in no time. I suspect the situation will no be different with Bit-Pay.

As for Bitcoin Magazine, I suspect this first issue will soon become a valuable collectors item if Bitcoin reaches even a fraction of its potential.

our rate of 0.99% is for merchants who use our automated order processing, and take the bitcoins directly.  If we assume all currency risk, exchange, and fiat transfer, we do all that for 2.99%.  so there is more padding for us in there, but added costs and risks for us to absorb as well.

And we would notice anyone trying to game the system with using our system to buy a 15-minute put option. 

Didn't want to hijack this important thread, but just out of interest let me ask you to clarify the currency risk issue.

From what you wrote further down, Bit-Pay is taking the currency risk fully, since the merchant is guaranteed to get his gross payout (minus the tiny fee of 0.99% as written at your homepage). I assume you are limiting your risk to the 15 minutes acceptance period, or even to the considerable smaller one from starting the period until you notice the transaction (i.e. after maybe 3 minutes you sell the amount being transmitted from your operational deposit at MtGox and redeem them when the transaction is approved). Even with some great trading discount at the exchanges I hardly can see how your business model is profitable. But for sure it is 

What is bothering me more with the currency risk is, how do you handle the following obvious attack scheme: assume me (or some automated bot) being the evil guy acting as merchant (using Bit-Pay) and buyer at the same time. Now I order some imaginary expensive stuff and let you calculate the amount in BTC. I let the acceptance period nearly pass and check BTC/USD rate change. If it went up, I won't pay ('sorry, serious technical problems etc.'). I'll repeat this until rate drops by more than 2% within an acceptance period. This time I accept, send the coins and by them immediately back at some exchange. Bottom line: you lost 1%, me and exchange won 0.5% each. Repeat. Profit.

I'm not really evil and eager enough to try this out, but am pretty sure you implemented means to prevent this.

Good Luck!

Zefir

My post was merely my view on it, I do not expect everyone to agree

Yes it does take some of the work off the merchant, but at the cost of being more like the old fiat system.

I agree the BTC to bank is easyier with bit-pay, but eventually we should get to a point where the merchant does not need to convert to fiat.

--low battery, gtg

Dumping bitcoins into an exchange account doesn't really solve the needs of most merchants.  They cannot tell

- who just paid them?
- what was it for?
- is it the right amount?
- how do I automatically act upon this order?

Also there is about 1 hour of currency risk involved because the exchange will not let you sell the bitcoins right away.  Losing money after the sale will piss off a merchant more than anything!

With our service, we guarantee a payout in USD or EUR based on the gross USD/EUR amount of the order.  It does not matter how many bitcoins we collect, how long it takes us to sell them, or what we can sell them for.  The merchant is guaranteed to get an ACH the next business day for the gross amount of their order, minus our fees.  

We don't advertise this, but there is no faster way to get bitcoins into cash in your bank account than using Bit-Pay.

Exactly, and some people are averse to the DIY solution, and wish to have something Turn-key, even for a cost. It fills a much needed niche, because not everyone with a webshop can set up a bitcoin payment system on their own, and nor do they want to.

Guess everyone has their reasons, but heres a few.

• Locks you in to a single payment provider
• Requires trust, since customer is paying them not you
• Works the same way as CC in fiat has for the last many years.
• Costs money to use their service

Ofcause using bitpay means that atleast one other person consider the service for legit, like when using CC in a webshop, if the shop does not deliver you can chargeback.
You may not be able to chargeback with bitpay, but if the seller cheats, he probably wont have a bitpay solution for long.

You dont need a payment processor to accept BTC, but it does make it a bit easyier.
Alternatively you setup a sell order on gox, and then either register all your private addresses used for payment, or transfer them to gox after a sale is accepted (from a bitcoin daemon not hosted on the same IP as website ofcause).

I prefer the complex DIY solution, where the shop depends on noone but them selves (and gox if they want to sell for USD instantly), but bitpay will help those shops that prefer the regular cc style payments.

Just my 0.02BTC

Thanks zefir!  We are working on getting as many businesses signed up as we can.  The challenge is getting it integrated with whatever e-commerce solution they are already using.  We have plugins for some of the major shopping carts, but not all of them.  And the volatility still has some merchants scared off. 

I would say that whenever you shop somewhere online, you should suggest to them that they accept bitcoins!  it is more convenient for you and cheaper for them.  I would be happy to talk with them if they have any questions.  We can payout the merchants in dollars, euros, or bitcoins.