Topic: Why some 3rd party wallet providers should be avoided.. (Read 393 times)

May be next time a better way would be to purchase coupon code directly from sites like bitrefil, they support LN so you would be paying much lesser fees.

I've been in this situation and I wasn't prepared to pay that fee so just sent it manually and got a warning I'd messed it up etc. but as I remember it would always clear with some delay.   In my case it was totally fine about a delay as it wasnt a time critical purchase and I was in receipt of nothing but a credit on a commodity gold account, wasnt a big deal and very often wasnt a large amount to be fussing over.      Convenience will always be a big deal with mainstream operations and Bitpay is trying to appear to be that perfect solution, I agree on their bias and why they always steer people away from using BTC.

Education is the first step. Educate other users about how using BitPay is bad for their own privacy and security, as well as being bad for the wider bitcoin ecosystem. Direct them to links such as https://debitpay.directory/ to help them find new places to shop which do not use BitPay, as well as to find alternatives to companies they are already using which do use BitPay. Obviously, we should follow these steps ourselves. If BitPay using companies see less revenue than their non-BitPay counterparts, they will soon make the switch.

Then, educate the merchants. Many merchants are simply unaware about how terrible BitPay is, or are unaware that there are better alternatives out there. Tell the merchants that you would like to shop with them, but you will not support BitPay and why not. Provide information regarding alternatives such as BTCPay.

Then most importantly, put your money where your mouth is. Spend bitcoin at non-BitPay merchants. Support them and help them grow.

Just made this post, BitPay wants to become their own bank.

https://bitcointalksearch.org/topic/bitpay-wants-to-become-their-own-bank-5298855

-Dave

^^ the problem is that "adoption" takes time and it can not be forced. the absurdity of it which also prevents adoption from growing is that everyone wants the adoption to happen before THEY get on board. for example the merchant wants people to first want to pay in bitcoin before it starts accepting it while the people want the merchant to first start accepting bitcoin then they start spending their bitcoins.
as long as this is the case we are not going to see any major growth in number of places that bitcoin can be spent.

in a situation like this, third party wallet providers even centralized offer a utility that will attract users and is damaging to the whole system.

I 100% agree with this but it still comes back to:


What are we, as a group and individually doing about it? I admit in the business / commercial side I am doing nothing. Don't have the time or motivation or ability to even begin to try to have vendors change their ways. Heck I think our old landlord thought checks were way to modern and why don't we pay with cash.

On the private side I have had some success with some small biz and individuals to take BTC but the few that do very quickly convert it to fiat though Coinbase / Gemini.
Which beings us back to we need more places to take BTC so they don't have to. Actually had one who I setup a BTCPay server for look into BitPay by themselves and ask me about it so he would not have to waste time converting to fiat. That is why we have to get more places to take BTC. Otherwise, IMO not only is BitPay going to stay, we are going to get more places like it.

edit: I think if we want to continue this discussion on how to get more people to take BTCwe should start a new thread.

-Dave

You don't have to use the fee rate they give you. When you are going to send payment they ask you which wallet you are using. I usually tell them I'm using Bitcoin Core and they don't force me to use their payment protocol which is forced upon you if you have a BIP70 compatible wallet. Bitcoin Core deprecated this protocol so BitPay will give you an address and amount instead of having you click a payment URL which will open your wallet and select the fee for you.

Sure, people are free to compromise their privacy. We can advise against it, tell them why it's a bad idea, provide examples of the negative consequences, offer alternatives, and so on, but ultimately we can't stop them if thry choose to ignore all that.

However, bitcoin is different. If someone gives away their personal details to Facebook or Google, it doesn't affect me at all. I don't use these platforms. But if the community decide to keep supporting companies like BitPay, allowing them to grow bigger, allowing them to exert more control over the marketplace or over bitcoin itself (see the Segwit2X attack for example), then that absolutely affects me.

If the community as a whole decides it is fine with a third party monitoring all our transactions, demanding KYC, blacklisting users it doesn't like, freezing payments it doesn't like, and charging a fee from us to do this, then we really are no better than fiat.

Such companies will exist as long as people are going to use and support them.

I am not using BitPay and will never be.
Everyone is free to decide how he handles a payment. If someone chooses to use BitPay to give aways his data, i couldn't care less. That's not my business.
You can't force other people to be privacy-orientated or non-retarded or whatever. If they decide to giveaway their data (hello facebook, tiktok, etc..), they are free to do so.

That is true but I doubt many people are using manual fee option for Electrum and other wallets, and I don't know why, but I think they are afraid of messing something up and getting stuck transaction.


I wonder why you don't trust that convict? 

Sure, I don't disagree with you there. I fully accept that the government is forcing BitPay to push KYC on its users, although it is worth noting that BitPay put up zero resistance, and go much further and more invasive with their KYC than other payment processors. And also worth noting that BitPay are doing a lot of things they don't have to, such as cooperating with Chainalysis.

Still, my underlying feeling about the whole thing hasn't changed. The entire point of bitcoin is to be able to make transactions without intermediaries, without "trusted" third parties (I trust BitPay about as much as I trust Roger Ver). Why are we, as a community, allowing a company like BitPay to insert themselves in to all our transactions, to collect our data, to spy on us, to report us to the government, and take a cut for the privilege? The only person who needs to know what I am spending my money on is the person I am buying from at that specific moment. BitPay is on a path to make bitcoin transactions less private than fiat.

Bitcoin is unique in that you can easily and completely cut out these middle men. Merchants should be encouraged to use a self hosted platform such as BTCPay instead, and we should support merchants who do by preferentially spending our money with them.

OP, slightly curious, did your friend notice the "recommended coin" that should be used by BitPay? The one with low fees and faster confirmations?

BitPay's business-model wants the customer to go through inefficiencies. Haha.

Can't comment on the S2X didn't really follow it, but the KYC, privacy, blocking payments, etc. again go back to the conversation we had before. BitPay has to play by US rules. And it choses to play by some of the most strict ones. I disagree with it, you disagree with it, but at no time can anyone come back to them and say that they violated this or that law.

Same thing with Coinbase. They have stated that they really don't give a crap about BTC that comes from casinos. But, due to regulations they choose to ban all deposits / withdraws to / from them because it just keeps their liability down.

Think of any US based exchange / provider as being less concerned with KYC and more concerned with CYA.
The downside of CYA for them is that it means more KYC for us.

-Dave

Is that not a bit of an issue, though? That they are not clear with how fast your transaction must confirm, or how much fluctuation in price they will accept before your payment is declared "invalid". Seems quite disingenuous on their part, since I'm sure if the price of bitcoin increases dramatically after you have placed your order they won't be offering you a refund on the excess you paid.

I don't think that requiring speedy transactions is evil, at all. It's just good business sense, although they should be more open and transparent about their processes as above. It's all the other shady things that BitPay does - supporting Segwit2X, demanding KYC, invading privacy, arbitrarily block payments, etc. - that makes me recommend that they should be avoided.

Depends. I have heard of several different things happening.
If BTC is stable, and it confirms in a few hours then your order goes through.
No matter what happens after "X" amount of time the invoice will time out and you have to go though bitpay for a refund. No idea what "X" is.

If the price of BTC changes past a certain % (once again I don't know what it is) and you did not use their fee you have to go though bitpay for a refund.

Important note: all this is from other people posting about it here / reddit / twitter / other crypto forums.
 
If all I can get is a BIP70 payment request (which by the way some places other then BitPay still use) I either deal with it or see if there is another way of paying. Depending on the fees requested.

I really don't think it's a evil as everyone thinks it is. Businesses want to get paid, their don't care what credit card companies have to go though on the back end to get paid and they don't care what BitPay has to deal with either. All they want to know is when the money is going to hit their bank. For businesses that are keeping money on chain or using it to pay vendors / employees whatever it's a different story. But for many places that are operating on thin margins, it's take your 1.5% cut give me the rest ASAP and go away.

I think that is what people keep forgetting, and it goes back to that thread that you and I were on earlier this year with the BitPay KYC. We need more places to take BTC directly. If there is going to have to be a conversion to fiat to pay rent / gas / electric / insurance / vendors / etc. then places like BitPay / Coinbase Commerce / etc. are always going to exist and they may or may not have shitty (to us) rules.

-Dave

So here's question I can't answer myself since I flat out refuse to use BitPay or use any merchant which requires me to use BitPay:

They can print an invoice which says "Pay X to address Y using fee Z". I load that invoice, but decide fee Z is far too high, so I change it to pay a fee which is 20% of Z. My transaction now takes 20 blocks to confirm instead of 2.

What do BitPay do in this scenario? Will they cancel my order? Will they calculate a new price and demand I pay the difference?

All in all, yet another reason to convince as many merchants as possible to start using BTCPay instead.

As stated above if the vendor is using BitPay then they do tend to force you to pay a fee that should get you into the next block or two.

Now, here is where it gets wonky so to speak. Merchants that use them to take payments are mostly paid in local fiat. They don't keep the BTC and send it to the merchant, they send the merchant cash. So in that regard BitPay wants to get the funds in the next block, sell it as quickly as possible, take their cut and send the money to the vendor.

This is what their entire setup is based around.
When fees are high, they really don't want to wait for 20 blocks for it to be mined when the price of BTC can change several percentage points.
So they adopted the pay with a supported wallet that lets us determine the fee so we can get our funds quick or go elsewhere.

Not the best attitude, but it works for them.

-Dave

BitPay are anti-bitcoin and should be avoided at all costs: https://debitpay.directory/anti-bitcoin/

BitPay have both a wallet and a payment processor. The payment processor will have no control whatsoever over what fee he sets for his transaction, and the wallet will allow him to choose his own fee. If he has overpaid a fee, then he hasn't been paying attention to what he is doing.

Sometimes they show an invoice link which has to be clicked on and opened in a supported wallet, and not all wallets support it. If this is the case, you can use a third party tool such as https://alexk111.github.io/DeBitpay/ to decode the invoice and be shown an address and amount like every other normal transaction. BitPay make things unnecessarily complicated.

There is another reason for forcing users to pay huge mining fees, which is that they will convert those coins into dollars in the merchant's account, and thus the currencies must be confirmed quickly to avoid fluctuations in the exchange rate.

Delayed confirmation of transactions is not considered a problem if the trader accepts cryptocurrencies and does not intend to quickly convert them into bank balance or if the exchange rates are stable.

That's weird, especially because Bitpay lists multiple wallets that users can use the pay their invoices[1]. Are you sure you're not mistaking it for the payment gateway service that is available to be integrated on your website?

[1] https://support.bitpay.com/hc/en-us/articles/115005701523-Which-wallets-work-best-for-a-BitPay-payment-#:~:text=You%20can%20use%20any%20of,send%20some%20bitcoin%20to%20it.

Yeah, that's weird--usually when I've bought something and the processor is Bitpay they just provide you with an address to send the funds to, and you can send the payment with whatever wallet you want.  Is OP's friend a newbie and missed something, perhaps?

But that isn't the point.  Bitpay shouldn't (or usually hasn't) set the fee for the customer.  I know the network has been really congested as of late and average fees have been extremely high, but OP should have been able to make the payment without using a Bitpay wallet.

Most likely the website uses Bitpay API to accept bitcoin. I have experienced before on the Namecheap. Before adding BTCPayserver on the Namecheap they accept only Bitpay. There was no option to send funds from another wallet either its web or noncustodial wallet. You had to send fund Bitpay first if you are holding funds on another wallet. But good to see that now they are accepting bitcoin via BTCPayserver, so there is no issue sending bitcoin from anywhere.

Do you happen to know which service was it? I've already come across some merchants that asked me to login into my BitPay account as you said, but it was possible to continue "as guest" and then use a BIP70 decoder to pay for the invoice (by giving me the address and the amount).

I think it is some regulatory thing for some merchants. A service like BitPay has strict KYC requirements, so the merchant knows he will  not be implicated in dodgy deals, if the bitcoins was derived from criminal actions. They hope the KYC requirements will give them some protection against fraud and money laundering schemes.

It also leave a paper trail for their auditors with proper invoicing etc.. In any way, I will not be using their service.. so I am not to worried about that.

The other reason could also be that inter transfer of coins within a specific wallet provider.... might be cheaper for the merchant. I know some wallet providers do not charge a large fee, if the coins stays in their system. (It is just a ledger entry on their database, not a tx on the Blockchain) 

Why would the person be forced to use Bitpay? The service wouldn't know if the payment is done via BitPay if it's done on-chain. They have no reason to force the user to use BitPay to pay for an invoice in Bitcoin on-chain, it'll be the same as paying using any other wallets.

I don't think its very unreasonable for the fees to be that high. There was indeed a period of time where it took hours for my transaction with a fee of ~100sat/byte to get confirmed. If the merchant wants a confirmation within a reasonable period of time, I don't think that would be out of the ordinary though I agree it's quite extreme.

If your wallet provider doesn't allow you the liberty to choose the way to use your wallet, you should avoid it.

 A few weeks ago, my friend used a bitcoin payment service provider called ... BitPay. He wanted to pay for a online subscription and the service only accepted bitcoin payments if you used BitPay.

The amount was small ... between $10 to $15 dollars ....so he thought it would not cost him a lot in miners fees. Well, he was wrong... The Fee rate was 123 sat/byte and his miners fees was almost $9 on that transaction of between $10 and $15 ..... that comes down to more than 45% of the total value of the whole transaction.

The service does not allow for you to choose what fee rate you wants to use, it just gives you a popup warning message.. saying that the fee is going to be high.  

     Services and merchants should not force you to use their preferred payment service, because it is chasing customers away.

If he used his own hardware wallet or even Electrum, he could chose what fee rate to use and he would have paid a lot less. I guess it is a hard lesson to learn... right!