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BitCoin Card To Launch In 2 Months, Says BitInstant

timothy posted about 2 years ago | from the cash-back-on-that-purchase? dept.

Bitcoin 216

hypnosec writes "Charlie Shrem, co-founder of BitInstant LLC, has confirmed that a BitCoin-funded international debit/credit card should be available very soon. Giving a time frame of 6-8 weeks, Shrem said over an IRC chat session that the card will function like any other credit or debit card, and that it can be used at places where MasterCard is being accepted. Shrem has also said that the initial 1000-odd cards will be given for free and subsequent cards will carry a charge of around $10. Any transaction that is carried out through the card [will incur a] 1% BitCoin transfer fee on top of the $1.50 ATM withdrawal fee."

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216 comments

My last virus clenaup involved BitCoin processing (1, Interesting)

PoliTech (998983) | about 2 years ago | (#41068673)

So pardon me if I don't trust BitCoin cash, credit or debit cards.

Re:My last virus clenaup involved BitCoin processi (1)

Anonymous Coward | about 2 years ago | (#41068819)

It's almost as if the whole system was invented by someone who said to themselves "man, I've got this botnet, and I want to turn it into money directly, rather than renting it out for DDoS attacks or spam or whatever, but how?"

Re:My last virus clenaup involved BitCoin processi (1)

Jeremiah Cornelius (137) | about 2 years ago | (#41069209)

I DO NOT WANT
To pay a RENT on BitCoins.

Fuck 'em. This is the same kind of transaction rent that makes "real money" truly evil.

Re:My last virus clenaup involved BitCoin processi (1)

jmorris42 (1458) | about 2 years ago | (#41069285)

Well guess what champ? You want to interoperate with the real world you pay the price. And Mastercard charges fees.

You aren't paying 'rent' you are paying a pretty cheap transaction (by credit card standards) fee to move in and out of the mainstream economy.

Not that it matters, just like egold before it, BitCoin is already flailing with the problem of keeping the money launderers, drug dealers and various other underworld forces from overwhelming it to the point no legit person will want to be associated with it.

Re:My last virus clenaup involved BitCoin processi (1)

Sperbels (1008585) | about 2 years ago | (#41069383)

You aren't paying 'rent' you are paying a pretty cheap transaction (by credit card standards) fee to move in and out of the mainstream economy.

You call a $1.50 ATM fee per transaction pretty cheap?

Re:My last virus clenaup involved BitCoin processi (1)

gl4ss (559668) | about 2 years ago | (#41069413)

You aren't paying 'rent' you are paying a pretty cheap transaction (by credit card standards) fee to move in and out of the mainstream economy.

You call a $1.50 ATM fee per transaction pretty cheap?

For drawing cash out of an atm in a foreign country yes.

wtf do you think you'd use it for? paying at mcdonalds? no, the primary purpose is for you to be able to sell bitcoins and draw the cash as cash out of the wall.

Re:My last virus clenaup involved BitCoin processi (1)

BlackSnake112 (912158) | about 2 years ago | (#41069533)

You would be surprised at the number of people who use a credit card or debit card at McDonalds, other fast food places, 7-11s, or Wawas. They could have just hit the ATM for $20 and saved a few dollars by paying cash. Those ATM fees add up.

Is bringing a new currency to the mix a good idea? IS there an exchange rate for bitcoins? I always thought this was a way for the creator to scam people out of money. After all is does cost something to run those bitcoin machines. Plus the cost of the hardware itself. Have you ever looked at some people's bitcoins rigs? They spend $1000+ on them. If it was their hobby fine. Do people think they will get rich by doing this?

Re:My last virus clenaup involved BitCoin processi (4, Insightful)

jpapon (1877296) | about 2 years ago | (#41069583)

Wait, who's paying atm fees every time they use their Mastercard at a merchant?

They need to find a new bank.

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41069735)

Using a credit card allow you to make fewer trips to the ATM and avoid the fees. Not only that, most cards would have a 1% (or more) pay back either in "points" or "cash" for the purchase except for cash/money order withdraw and the usual additional warranties and other benefits.

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41069601)

Umm, you don't pay a debit card fee on a normal cash transaction at a business.

Re:My last virus clenaup involved BitCoin processi (1)

hobarrera (2008506) | about 2 years ago | (#41069929)

That's really how it works where you live? In Argentina it's forbidden to charge extra for debit/credit cards, and debit cards will give you a 4.7% refund on all purchases at the end of the month.
In short, I save 4.7% of everything I pay in debit card, while extracting money from the ATM is annoying, and they usually don't even have change.

Re:My last virus clenaup involved BitCoin processi (1)

LordKronos (470910) | about 2 years ago | (#41070121)

You would be surprised at the number of people who use a credit card or debit card at McDonalds, other fast food places, 7-11s, or Wawas. They could have just hit the ATM for $20 and saved a few dollars by paying cash.

Excuse me? I don't pay anything to use my card at any of those places. In fact, I get cash back every time I use my card. Paying cash would actually cost me more.

Re:My last virus clenaup involved BitCoin processi (1)

bluefoxlucid (723572) | about 2 years ago | (#41069297)

Bitcoin rolling out sales tax lol!

Re:My last virus clenaup involved BitCoin processi (4, Interesting)

IamTheRealMike (537420) | about 2 years ago | (#41068885)

It probably involved email and HTTP too. Do you trust them?

I think in the next 6-12 months we'll see botnets largely stop mining on Bitcoin because the rollout of ASIC mining hardware will make virus-infected PCs hopelessly un-competitive, even though the electricity is free. They're already worthless for doing CPU mining even if you have thousands of them and soon even if you have a lot of infected gaming machines the return will probably not be worth the time.

Re:My last virus clenaup involved BitCoin processi (1)

PoliTech (998983) | about 2 years ago | (#41070085)

Financial transactions via email? I'm sure that the president of Nigeria wants to share his U.S. bank account with me, really. Phishing, Vishing SMiShing.

Financial transactions via HTTP? Totally secure! Man in the Browser ... you got me there.

An unregulated virtual cash system is certainly a great idea, but BitCoin? Bitcoinica announced that they are upgrading their exchange "to a professional level of security" just this year. Trustworthy, what was I thinking?

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41070091)

It probably involved email and HTTP too. Do you trust them?

Not for anything secure unless they're used with added trust and encryption.

Re:My last virus clenaup involved BitCoin processi (3, Insightful)

Anonymous Coward | about 2 years ago | (#41068965)

So a virus used your computer to generate bitcoins, and now you don't trust the currency? Thank god it didn't steal your bank account info, you you'd have to stop using the US dollar as well!

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41069345)

No, he would only have to stop trusting the US dollar.

Re:My last virus clenaup involved BitCoin processi (1)

Anonymous Coward | about 2 years ago | (#41069211)

I don't trust Wallmart, the sledge the burgler used to break in here came from them...

Re:My last virus clenaup involved BitCoin processi (1)

MysteriousPreacher (702266) | about 2 years ago | (#41069323)

I don't trust computers. I watched a Highlander II DVD on mine, and since then I've a very expensive portable locked in the cupboard doing nothing.

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41069375)

In this case this is your fault - everyone knows there can be only one.

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41069811)

That is your problem right there. There was no Highlander II movie. (Just like there was only 1 Matrix movie) The movie people thought it would be funny to skip II and go right to III. To keep the people guessing.

Why they named a space alien invading Earth movie Highlander is beyond me...

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41069311)

Surely printed on daily basis $ is much better alternative.

It's the only currency that will remain, mark my anonymous words, i rarely mistake with such predictions.(if it won't fail technically, like there will be some hole that will allow to have more of bitcoin than there should be, or if it can be easilly stolen)

Re:My last virus clenaup involved BitCoin processi (0)

Anonymous Coward | about 2 years ago | (#41070037)

And my last virus cleanup involved credit card processing, now I only use cash!

Dreading the Day (2)

Metabolife (961249) | about 2 years ago | (#41068675)

When BTC becomes ubiquitous and I'm paying .00000343 BTC for a soda.

Re:Dreading the Day (5, Insightful)

LodCrappo (705968) | about 2 years ago | (#41068729)

if it happened no one would think of it that way, at least not any more than we currently think about driving cars around at some fraction of light years per second.

Re:Dreading the Day (5, Funny)

Gunfighter (1944) | about 2 years ago | (#41068895)

Us old folks still remember the day when the speed limit was 2.5989246 × 10^-15 light years per second on the highway. Nowadays, you see people zooming along at 3.78025396 × 10^-15 light years per second in the 3.07145635 × 10^-15 light years per second zone. It's MADNESS!

Where's my cane?

Re:Dreading the Day (2, Funny)

Anonymous Coward | about 2 years ago | (#41069187)

Why are you obfuscating your numbers like this? You seem to never have heard of SI prefixes! Also, your accuracy is overblown. Say "2.6 femto light years per second" and everyone will understand you.

Oh, and you'll be fined 2.5 micro bitcoins for driving too fast.

Re:Dreading the Day (0)

Anonymous Coward | about 2 years ago | (#41069395)

It's called sarcasm, you dumb ass.

Re:Dreading the Day (0)

Anonymous Coward | about 2 years ago | (#41070075)

You only had a cane?
In my day we all had hardlight canes.

I probably shouldn't have said that.
Oh boy here comes the black suits, I messe
I am just senile, disregard anything I say.
Please enjoy your visits in time with The Time Tube. Come again.

Re:Dreading the Day (4, Informative)

Kjella (173770) | about 2 years ago | (#41068847)

Also called 3.43 microBTC (of course slashdot doesn't support the mu sign, not like a nerdy site could need that). Probably around the same time Intel introduce their 0.000000008m processors.

Re:Dreading the Day (0)

Anonymous Coward | about 2 years ago | (#41069213)

Also called 3.43 microBTC (of course slashdot doesn't support the mu sign, not like a nerdy site could need that). Probably around the same time Intel introduce their 0.000000008m processors.

Will those processors finally break the 10000000000 Hz barrier?

Re:Dreading the Day (0)

Anonymous Coward | about 2 years ago | (#41069457)

When they start drawing thousands of milliamps!

Re:Dreading the Day (1)

MozeeToby (1163751) | about 2 years ago | (#41069049)

More likely you'd pay 3.43 micro-BTC.

Re:Dreading the Day (-1)

Anonymous Coward | about 2 years ago | (#41069151)

Sure, if you're a retard.

Yey! A BT story! (4, Funny)

Razgorov Prikazka (1699498) | about 2 years ago | (#41068689)

A subsequent RaspberryPi story shouldnt take long now, so strap yourselves in guy's!

Re:Yey! A BT story! (4, Funny)

pnot (96038) | about 2 years ago | (#41068861)

A subsequent RaspberryPi story shouldnt take long now, so strap yourselves in guy's!

Business plan:

1. Mine bitcoins with your Raspberry Pi. [stackexchange.com]
2. Store the bitcoins on your Raspberry Pi [bitcointalk.org]
3. Use those bitcoins to buy another Raspberry Pi [bitmit.net]
4. ?
5. Profit!

Re:Yey! A BT story! (1)

iluvcapra (782887) | about 2 years ago | (#41068959)

No, these are great. It's August and Bitcoin stories are stoking demand, because for the second year in a row we're having an abnormal BTC price run-up (faltering lately, but still managing to hang in there).

I sold out a week ago and made 200% off coins I bought last November, completely on the theory that BTCs go scarce at the height of summer and suddenly stop moving when school starts.

Re:Yey! A BT story! (0)

Anonymous Coward | about 2 years ago | (#41069093)

no no! we need a story about a kickstarter vaporware project that got a ton of donations for nothing! i always love those!

  "kickstarter project raises 100,000 dollars to create perpetual motion machine, product should be shipping by by 2014!"

Thanks bitcoin. (0)

Anonymous Coward | about 2 years ago | (#41068703)

I needed a good laugh today.

Hookers, drug dealers and Russian Mafia rejoice! (3, Funny)

Rogerborg (306625) | about 2 years ago | (#41068709)

Finally you can trade your services to each other directly in meatspace with the simple swipe of a card.

Re:Hookers, drug dealers and Russian Mafia rejoice (1)

Slalomsk8er (976575) | about 2 years ago | (#41068821)

Law enforcement rejoice! Finally every dumb criminal that heard about the untraceability of BitCoin has his name on his BitCoin wallet at this as of jet unknown major bank.

Might be vaporware (3, Insightful)

Anonymous Coward | about 2 years ago | (#41068717)

I'd take this with a grain of salt. This might be nothing but an idea and a photoshopped image [imgur.com] .

well (0)

Anonymous Coward | about 2 years ago | (#41068721)

this should give some transparency to this digital current

Legendary security (0)

Anonymous Coward | about 2 years ago | (#41068723)

Why yes, I'd just love to carry a card which can process transactions for BitCoin, what with it's legendary track record of security and accountability! I can't think of anything better, in fact!

...and then we all woke up and had a good laugh.

Re:Legendary security (3, Interesting)

MightyYar (622222) | about 2 years ago | (#41069329)

I've seen where some of the sites that accept and trade bitcoins were hacked, but AFAIK the bitcoin system itself has never been hacked. Many, many more dollar and euro based websites are hacked, and dollars are printed freely even in countries that aren't supposed to print them (the dollar "system" has been hacked).

Yet we use dollars and euros.

limits and fraud (2)

mcelrath (8027) | about 2 years ago | (#41068745)

From their FAQ [bitinstant.com] :

What's with these transaction limits? You may have noticed our service limits transactions: each transaction has a dynamic limit calculated by our model but the limit will never exceed a 3 digit number (that is, the highest limit that will ever be possible per transaction for our service will be precisely 999). On top of this, we limit overall amount per-user within any single trading period to far below regulatory requirements - although we no doubt are turning away some users who are disappointed by this policy, it is in everyone's interest to maintain it. If we allowed every user to transfer as much as they wanted it would cause several problems - first, it'd open us to unlimited risk if fraudulent transactions...

If your transaction system is sufficiently insecure that your only solution to fraud and money laundering is to block transactions over a certain size, you fail. We're all dying to move away from that ridiculous idea that visa/mc/banks are currently using, because it is fundamentally broken. Who are you to tell people not to buy cars, home repairs, startup business equipment, etc...

Re:limits and fraud (1)

Zironic (1112127) | about 2 years ago | (#41068811)

Well, they'd rather not get raided by the IRS. I don't think I blame them, I wouldn't want to get raided by the IRS either.

Re:limits and fraud (1)

mcelrath (8027) | about 2 years ago | (#41068835)

So the IRS is preventing us from having secure transactions? I don't think so....and you think the IRS is going to say "oh all transactions are less than $1000? Well never mind then, we'll drop the money laundering charges...".

Re:limits and fraud (1)

Zironic (1112127) | about 2 years ago | (#41068889)

It goes the other way around. "Oh, so you're doing transactions for more then $1000? We'll shut you down then".

Re:limits and fraud (2)

mcelrath (8027) | about 2 years ago | (#41068927)

All you have to do is file the right documentation with the IRS (on behalf of your clients). e.g. international transfers over $10k must be declared, but are not illegal.

Re:limits and fraud (1)

IamTheRealMike (537420) | about 2 years ago | (#41069119)

AML laws do indeed have thresholds on them. They have to otherwise they'd be unworkable. Do you want to require somebody to provide a passport and utility bill any time you use cash?

Re:limits and fraud (5, Insightful)

IamTheRealMike (537420) | about 2 years ago | (#41068943)

You have failed the understand the problem here.

The fraud problem is not with Bitcoin. Bitcoins security model is very simple and easy to understand - you have private keys, protect them. If they're stolen, so is your money. There are no chargebacks. How secure you make those keys is entirely up to you. I have most of my money stored in an offline wallet encrypted under a very long passphrase, which is very secure but somewhat inconvenient. Then I have a smaller amount of money stored on my phone which doesn't require any passwords to use and I just accept that if my phone is stolen or lost somehow then I lose that money, but it's very convenient.

The fraud problem comes from the world of credit cards and traditional banking which are hopelessly insecure. Rather than give people the tools they need to secure their money, the managers of these systems simply shift the pain onto merchants who can do nothing about it beyond try and protect themselves with strict transaction limits, complicated risk analyses and just accepting that they'll lose some of the time.

There are also other reasons which you conveniently elided, such as government regulations that forbid / complicate large transactions.

Re:limits and fraud (-1)

Anonymous Coward | about 2 years ago | (#41069185)

The fraud problem comes from the world of credit cards and traditional banking which are hopelessly insecure.

Uh huh. The credit card system is far more secure than your buttcoin exchanges.

Re:limits and fraud (-1)

Anonymous Coward | about 2 years ago | (#41069787)

i found "bitcon" much more amusing than "buttcoin"

please use my term instead, thanks

Re:limits and fraud (1)

iluvcapra (782887) | about 2 years ago | (#41069221)

The fraud problem comes from the world of credit cards and traditional banking which are hopelessly insecure.

You go too far. Insecure compared to what? Sites that maintain "accounts" of BTCs in wallets are routinely hacked, and employ many of the same identity validation procedures a human bank uses-- Mt. Gox won't remit human currency to you unless they have a photo ID on file, and their password recovery is comparable to any old dumb bank website. Keeping your bitcoins at home in a wallet or on paper is more secure, but then you can't use them with interbanking products, like a fancy Bitinstant international debit card.

Re:limits and fraud (2, Informative)

IamTheRealMike (537420) | about 2 years ago | (#41069487)

You go too far. Insecure compared to what?

Compared to any reasonable system design.

Let's try an analogy. Imagine if the way you received email from somebody was by giving them the password to your email account, and then they logged in and uploaded a message directly to your inbox. There would be no SMTP, just IMAP upload/download. Nobody sane would design email in such a way because it'd mean to receive a message from somebody you'd have to trust them to not read your mail, which is unrealistic. But that's exactly how credit cards work. To buy something you give out what is effectively a long password, anyone who has it can spend money as you.

Over time the credit card companies are trying to change this, by introducing things like Verified by VISA which lets your bank introduce an actual password or more, but deployment is extremely slow. Fundamentally the problem is banks and CC companies don't have any incentive to fix this for real because they don't pay for the fraud costs, merchants do and they then have to pass it on to back to buyers via increased prices.

Keeping your bitcoins at home in a wallet or on paper is more secure, but then you can't use them with interbanking products, like a fancy Bitinstant international debit card.

According to the info provided by Shrem, the cards balance will update after only one or two block confirmations, so you could transfer money from your laptop/phone/smart card/whatever and have it spendable on your card a very short time later. But yes, you're right, if you need to interface with the traditional banking system then you have to maintain a balance with some third party, that reliance on third parties is the very problem Bitcoin tries to solve. Don't like it - stay entirely within the P2P Bitcoin economy.

As for sites getting routinely hacked, yes, maintaining large sums of money on a server paints a big red target on your back. That's why I don't give my money to a third party I don't know anything about for safe keeping - it's not complicated. So far my losses from these sorts of hacks have been zero.

Re:limits and fraud (1)

fustakrakich (1673220) | about 2 years ago | (#41069247)

...hopelessly insecure...

More like intentionally insecure. They can write off the losses.

Re:limits and fraud (1)

iluvcapra (782887) | about 2 years ago | (#41069053)

You can't buy a car with a regular debit card, and you're dinging them for not supporting it with a Bitcoin debit card?

Re:limits and fraud (0)

Anonymous Coward | about 2 years ago | (#41069289)

You can't buy a car with a regular debit card

I've never heard that before. Why not? They accept checks.

Re:limits and fraud (0)

Anonymous Coward | about 2 years ago | (#41069539)

I have! Cash is king

Re:limits and fraud (1)

Charliemopps (1157495) | about 2 years ago | (#41069593)

Sure you can. I've done it.
Trust me, it's very rewarding to talk a car salesman down to a price that's relatively near their cost and know their thinking "Well, I'll just screw him on the financing." and then lay the debit card down on his desk and say "put it on that"

I recommend calling the bank ahead of time and telling them the charge is coming though. I've had the bank sit on the charge and call me (literally while I was still standing at the counter) to verify I was really putting $15k on my debit card. Since then they've gotten used to my purchasing patterns and don't question when I do that sort of thing.

I have no debt, other than a house loan... and that's obviously for tax purposes. When I want something like a car, I save up for it and buy it cash. While I'm saving up for it, I put that money into Stocks or mutual funds and earn money on it rather than paying interest. I've had credit cards for emergencies but every single one of them canceled the card on me due to lack of use. Apparently paying for a tow truck every 2 years doesn't make them enough profit.

Unsecured debt is the bane of modern society. Get out while you still can.

Re:limits and fraud (0)

Anonymous Coward | about 2 years ago | (#41070123)

I don't believe several of your statements:

- That they automatically approve $15k transactions based on your long history of buying cars with your debit card. They're always going to call over that amount of money unless you waive your rights to fraud claims.
- That you consistently get a ROI with "Stocks or mutual funds"
- That credit card companies are canceling your cards for lack of use. I've never had a card canceled after inactivity. Even 7 years of inactivity.

Re:limits and fraud (0)

Anonymous Coward | about 2 years ago | (#41069627)

Yeh you can. I did several over 10 years ago.

Re:limits and fraud (1)

JDG1980 (2438906) | about 2 years ago | (#41069059)

If your transaction system is sufficiently insecure that your only solution to fraud and money laundering is to block transactions over a certain size, you fail. We're all dying to move away from that ridiculous idea that visa/mc/banks are currently using, because it is fundamentally broken.

The brokenness is legal, not technical. The US government wants to know the details of every transaction over $10,000, and it's actually against the law for banks to offer privacy and anonymity to their customers on such transactions. This is what got e-gold shut down [slashdot.org] .

Re:limits and fraud (1)

fustakrakich (1673220) | about 2 years ago | (#41069301)

The brokenness is legal, not technical.

Then what's the advantage of BitCoin again?

Re:limits and fraud (0)

Anonymous Coward | about 2 years ago | (#41069903)

Who are they? People that you're in a business relationship with that realize that it costs them less to suffer the complaints of one asshole who wants to put a house on his debit card than the paperwork of 1,000,000 victims of identity theft who have had their entire bank accounts cleaned out because there were no transaction limits.

Who are you to tell service providers dealing in financial liability how much risk they should take?

Perfect! (0)

Anonymous Coward | about 2 years ago | (#41068775)

My anonomous currency has been too anonymous lately, so why not inject it into a system where the anonomty disapears and high financial fees for spending it occur!

Re:Perfect! (0)

Anonymous Coward | about 2 years ago | (#41068817)

What anonymity? You can be tracked through your buttcoin purchases. Plus the first major security breach of this system will be even more hilariousnthan all the others. Buttcoin = fail.

Shrem said over an IRC chat session... (1)

Anonymous Coward | about 2 years ago | (#41068777)

I absolutely want to trust my financial transactions to a payment system announced via an IRC chat.

Re:Shrem said over an IRC chat session... (1)

Anonymous Coward | about 2 years ago | (#41068849)

AwesomeTrad-r has joined #libor
AwesomeTrad-r: lawl hai guyz can some1 give me creditz?
RBSd00d: what u need AwsomeTrad-r?
AwesomeTrad-r: i dunno lol.
AwesomeTrad-r: $45m at 1.4% but lets say it was 1.2% k? ;-)
RBSd00d: lawlz gotcha!
FSA has joined #libor
FSA: What's going on guys?
AwesomeTrad-r has left #libor (Quiting)
RBSd00d has left #libor (Quiting)

Doesn't this go against the spirit of BitCoin? (3, Interesting)

tlhIngan (30335) | about 2 years ago | (#41068829)

BitCoin's supposed to be this anonymous fiat currency system. Yet they're going through a decidedly non-anonymous regular payment card network (MasterCard).

I understand it makes the handling much easier for regular transactions, but doesn't this really sorta make it non-anonymous?

Though, I suppose since it's really just a currency enchange between bitcoin and whatever you use, though given it's volatility (and speculators don't help), it seems dangerous - one wrong swipe of the card and what was supposed to be a 1BTC/$15 USD exchange turns into a 1BTC/$4USD exchange because some hacker decided to cash out 40,000 BTC or something at that time. Remember the currency exchange on a credit card happens at the time of the transaction...

(And whoever is cheering the day BTC becomes the popular currency - remember there is no protection against the ills of the financial industry. Speculation, HFT (including arbitrarge amongst exchanges), etc.).

Re:Doesn't this go against the spirit of BitCoin? (0)

Anonymous Coward | about 2 years ago | (#41068923)

BitCoin's supposed to be this anonymous fiat currency system.

It's not anonymous at all since all the transactions are public. The advantage is that behind bitcoins there is only a protocol and not a central entity.

Re:Doesn't this go against the spirit of BitCoin? (0)

Anonymous Coward | about 2 years ago | (#41068997)

what was supposed to be a 1BTC/$15 USD exchange turns into a 1BTC/$4USD exchange

Out of curiosity, do you have anything to back that up? Not doubting you, but I would have expected it to be a 1BTC/$15 exchange turning into a 3.75BTC/$15 exchange.

Re:Doesn't this go against the spirit of BitCoin? (1)

zill (1690130) | about 2 years ago | (#41069377)

what was supposed to be a 1BTC/$15 USD exchange turns into a 1BTC/$4USD exchange

Out of curiosity, do you have anything to back that up? Not doubting you, but I would have expected it to be a 1BTC/$15 exchange turning into a 3.75BTC/$15 exchange.

Remember the currency exchange on a credit card happens at the time of the transaction...

It's false. Though admittedly most people have this misconception if they don't frequently shop internationally. Both Visa [visa.com] and Mastercard [mastercard.com] calculate their currency conversion rates on a daily basis:

How does Visa calculate its rate? Every day—except weekends, Memorial Day, Christmas Day and New Year's Day—Visa calculates the rate for the next day's transactions.

MasterCard uses multiple market sources (such as Bloomberg, Reuters, Central Banks and others) to develop exchange rates. These rates generally reflect either wholesale market rates or government mandated rates that are collected during the daily rate setting process. The displayed rates are derived from the buy and sell rates included in the MasterCard daily rate setting process and do not include any charges or markups applied by the Issuer. Please note that due to possible rounding differences, the displayed rates may not precisely reflect the actual rate applied to the transaction amount when converting to the cardholder billing amount. The exchange rate that is applied to a transaction is the exchange rate as of the day of settlement which is the day that MasterCard determines the settlement amount to be exchanged between the acquirer and the issuer. The settlement date is therefore typically different from the date of the actual transaction. MasterCard does not provide the exchange rate when purchases are converted from the local currency by the merchant to the cardholder's currency at the point of sale.

He's right about the bitcoin volatility part though. The current market depth[http://bitcoincharts.com/markets/mtgoxUSD_depth.html] down to $4 is 246010BTC ($1616992 USD); so if someone had $1.6 million dollars worth of bitcoins to waste, yes it's possible to bring the currency down to $4 in a single order.

Re:Doesn't this go against the spirit of BitCoin? (4, Insightful)

TeknoHog (164938) | about 2 years ago | (#41069019)

There is a nice counterargument [bitcointalk.org] on the Bitcoin forum. To summarize, the card is a great promotional tool, especially for merchants who might consider alternatives to credit card charges.

In a way, the purpose of this card is to make itself obsolete. This is not so strange if you consider many important social movements.

Re:Doesn't this go against the spirit of BitCoin? (4, Interesting)

IamTheRealMike (537420) | about 2 years ago | (#41069027)

BitCoin's supposed to be this anonymous fiat currency system.

This is a really common misconception. The point of Bitcoin is not to be an anonymous currency. The point of Bitcoin is to be a peer to peer decentralized currency that has limited and slowly decreasing inflation. Let me quote the original description Satoshi had on the website (nowadays it's on the front page of the wiki):

Bitcoins are sent easily through the Internet, without needing to trust any third party. Transactions:

  • Are irreversible by design
  • Are fast. Funds received are available for spending within minutes.
  • Cost very little, especially compared to other payment networks.

The supply of bitcoins is regulated by software and the agreement of users of the system and cannot be manipulated by any government, bank, organization or individual. The limited inflation of the Bitcoin system's money supply is distributed evenly (by CPU power) to miners who help secure the network.

You'll note there's nothing in there about being anonymous. Bitcoin is designed to provide privacy (or call it anonymity if you want), because it's a financial system and people demand financial privacy. Would you use a payment system that published a public record of everything you purchased? In the current banking system, privacy is provided by your bank and credit card company (ignoring the fact that they often waive that privacy for governments both domestic and foreign, with or without legal due process). But in a financial system that doesn't have banks, that approach obviously doesn't work.

As a result, nothing requires you to be anonymous if you use Bitcoin. Most people would like to keep their transaction history private but are happy to identify themselves to merchants and financial service providers (for instance, I do that, as does any user of Mt Gox).

Re:Doesn't this go against the spirit of BitCoin? (1)

dhomstad (1424117) | about 2 years ago | (#41069125)

Arbitrage isn't an ill of the financial industry. It's an opportunity to capitalize on a specific characteristic of dynamic markets. HFTs have negative aspects too, but it's more of a programming issue than anything inherently evil about the high sample rate. When /. bashes the HFTs, it makes me think of Bobby Boucher's mother in The Waterboy, when she doesn't understand something, she calls it the devil.

Re:Doesn't this go against the spirit of BitCoin? (2)

IamTheRealMike (537420) | about 2 years ago | (#41069225)

Yeah, the problems the financial industry have are really more about how it's organized and run rather than specific concepts like arbitrage. Arbitrage isn't bad, it's the reason we can say something like "Bitcoins are worth $10 each at the moment" and have it be accurate, even though in reality there are many different exchanges each with their own rate. If those rates start to drift too much arbitrageurs bring them back into line. And basically anyone can do this, it's a very competitive market so in theory the margins on arbitrage should end up very low. Hardly a way to make it big.

If you look at the financial industry, the problems are really varied. A lot of the issues boil down to the fact that there aren't very many banks and starting a new one is virtually impossible for a variety of reasons, so when existing banks misbehave or are generally asshattish you can't solve the problem by starting a competitor and trying to be cleaner/more trustworthy/cheaper/faster/whatever. With Bitcoin there are no banks. Today it only handles routing of payments and (not very well) storage of value. But there are designs that extend it to other services banks provide, like credit and investment funds. A decentralized financial system would still have speculation, HFT, arbitrage and so on, but you eliminate the problem of institutions that are "too big to fail" - the root of much injustice in todays setup.

Why? (4, Insightful)

ceoyoyo (59147) | about 2 years ago | (#41068851)

1% + $1.50 fee... so why would I want to use this? My current debit transaction fees are... zero. AND I don't have to worry about the value of the money in my account fluctuating wildly.

Re:Why? (2, Funny)

Anonymous Coward | about 2 years ago | (#41068875)

Because you're not a drug dealer?

Re:Why? (0)

Anonymous Coward | about 2 years ago | (#41068919)

1% + $1.50 fee... so why would I want to use this? My current debit transaction fees are... zero. AND I don't have to worry about the value of the money in my account fluctuating wildly.

Uh, your values and overall worth didn't fluctuate wildly in the last few years? Care to tell us your secret, because the rest of us are still living in houses worth 27 dollars, debating on cashing out what's left of a retirement fund to go splurge on a nice dinner...

Clearly your lack of concern about the stability of "real" money is rather delusional.

Re:Why? (1)

asdbffg (1902686) | about 2 years ago | (#41069057)

McLovin: Muhammed is the most commonly used name on Earth, read a book for once.

Re:Why? (0)

Anonymous Coward | about 2 years ago | (#41069149)

McLovin: Muhammed is the most commonly used name on Earth, read a book for once.

Popular-ism doesn't co-relate with intelligence.

Re:Why? (2)

IamTheRealMike (537420) | about 2 years ago | (#41069165)

Because if you receive some money via Bitcoin it's a convenient way to spend it down at your local store, for example. The alternative is using an exchange and then wiring the money to your account, which can take days and have much higher fees (banks are really slow sometimes).

Re:Why? (1)

vlm (69642) | about 2 years ago | (#41069335)

The alternative is

Since the earliest days there have been people who will take BTC and mail you a gift card and/or those prepaid credit card gift card things but you have to wait for postage. I guess there are people who will email you at least some "virtual" GC like amazon and itunes card numbers. I have no personal experience.

Re:Why? (3, Interesting)

MightyYar (622222) | about 2 years ago | (#41069463)

Here's one scenario:

You sell things on eBay. You have a Paypal account that can accept credit cards. When you sell you item, you pay Paypal 2.9% + $0.30 for merchant fees.

Or, you sell things on eBay. You accept BitCoin. When you pull the money out of the ATM, you pay 1% + $1.50.

For a $100 item, BitCoin costs you $2.50 and Paypal costs you $3.20.

For an article about Bitcoin... (0)

Anonymous Coward | about 2 years ago | (#41068871)

There sure are a lot of dollar signs in that summary.

Slightly disappointed (1)

dhomstad (1424117) | about 2 years ago | (#41068887)

First off, I'm excited to see a Bitcoin based card that can be used just as easily as other credit/debit cards. However, it's disappointing to see that the interchange fees will be comparable to Mastercard and Visa (1-3% p15 http://www.gao.gov/assets/300/298664.pdf [gao.gov] ). Maybe there will be a reduction in the fees as more options come forward?

Re:Slightly disappointed (2)

fastest fascist (1086001) | about 2 years ago | (#41069023)

It IS Mastercard. I'm surprised the fees are that low, the bitcoin-to-card solutions out there now are several percentage points more expensive.

Re:Slightly disappointed (0)

Anonymous Coward | about 2 years ago | (#41069501)

I'm also a bit surprised by the fees. All my credit cards were free to receive and transactions are free. I only pay if I carry a balance from one month to the next. Why would I want a credit card that require additional fees just to use it?

History repeating itself? (0)

Anonymous Coward | about 2 years ago | (#41068941)

http://en.wikipedia.org/wiki/Flooz.com

Anonimity (2)

wiedzmin (1269816) | about 2 years ago | (#41068969)

Wasn't the whole point of Bitcoin for it to be anonymous, like cash? Wouldn't having a card, with your name on it, to transfer Bitcoins to/from defeat that purpose, or at the very least flag you as a suspicious-individual-dealing-with-shady-untrackable-currency-used-by-hackers in the yes of the feds?

Re:Anonimity (1)

vlm (69642) | about 2 years ago | (#41069179)

Wouldn't having a card, with your name on it

I have little use for a "Bitcoin" card with my name on it.

Right now you can go on silk road (and many other places...) and turn BTC into anonymous visa/MC prepaid "credit card" gift cards. I'm not motivated enough to determine where this product fits into the existing market WRT to more or less anonymity and more or less fees and more or less trustworthyness. Superficially with no research it sounds astoundingly lower anonymity, more fees, and much less trustworthy than the guys who've been happily doing this for years.

I'm assuming they're not stupid enough that I could set up a site called vlm.onion, accept a certain chunk of BTC, refund the overage, walk to my nearest walgreens, buy a prepaid CC using my own cash, wipe the fingerprints, stick in envelope, all done, for lower fees than they're charging.

What would I do with the (vast?) stash of BTC I'd collect? Most of silk road doesn't appeal to me, but there's plenty of people willing to toss silver and gold into an envelope in exchange for BTC, you get the idea.

The one use I can find for a BTC card is the financial system totally screws over international transfers. They take forever and they F them up all the time. I've bought unusual electronic parts from legit suppliers in .au and Debian promotional swiss army knives from .ch and I've gone drinking IRL in IRL and I sorely wish I could have just sent BTC for basically free. From memory by the time the .ch transfer was complete I was paying something like 50% financial fees, because I had to convert USD-EUR then some iban or whatever your weird electronic checking system is called, then EUR to whatever it is swiss use for money (not swiss cheese, it was something else)

Re:Anonimity (0)

Anonymous Coward | about 2 years ago | (#41069327)

Goal was to be decentralized, not anonymous..

Brilliant (1)

Anonymous Coward | about 2 years ago | (#41069061)

Let's combine the credit card system's amenity to theft (you can't buy anything without giving away your number) with the Bitcoin system's irreversability (no such thing as a chargeback). I can't wait to start having my money stolen with no possibility of getting recompensated!

It's been done, and it was a scam. (3, Insightful)

Animats (122034) | about 2 years ago | (#41069565)

There's already BitCard, from "Global Standard Bank" [globalstandardbank.com] They're not a real bank. They used to have pictures of their supposed building and offices in Montreal, which turned out to be a Photoshopped picture of a building on the US west cost, with a fake sign added, and a picture of a bank interior in Florida. They're not registered with Canadian banking authorities.

Here's the discussion on Bitcoin forums [bitcointalk.org] about them.

As for the new operation, I have a hard time taking seriously a financial institution that announces its products on IRC.

This could be great for Bitcoin (1)

mathimus1863 (1120437) | about 2 years ago | (#41069595)

Many posters here are missing the point of this credit card, claiming that it will have all the downsides of both systems it is merging.

--Bitcoin is not required to be anonymous to be useful, and it's a benefit you can still have if you forego the credit card
--The point of the credit card is to make it possible to leverage your Bitcoins for every day purposes. If you reload the card using Bitcoins, but then you can use the card anywhere people use Mastercard -- now your Bitcoin savings can be used just like USD.

This bridges a huge gap for Bitcoin. Currently, those who own Bitcoins, have a tough time using them to get what they want. They're waiting for more widespread support, because the use-cases aren't diverse enough yet. With this, you can actually use them to buy stuff on Amazon (which you were going to do non-anonymously with your CC, anyway), but you can still maintain the benefits of Bitcoins for your own savings and services that support them natively.

This means that Bitcoins can join the party without being required to be supported everywhere. As merchants realize that they can save a couple percent and not deal with chargebacks, they can start supporting Bitcoin knowing that some part of their customer base already uses it. This normally requires a critical mass of users to be worth it for the merchant to take the leap -- this softens that curve quite a bit. For both users and merchants.

Also, if you are hostile to Bitcoin, please read this: http://slashdot.org/comments.pl?sid=2810657&cid=39797419 [slashdot.org]

Ultimate Inconvenience (1)

Cid Highwind (9258) | about 2 years ago | (#41069865)

Sweet. At last we've found a way to combine the inconvenience of finding a merchant that sells something you want and accepts Bitcoins with the inconvenience of finding a merchant that sells something you want and accepts non Visa/MC/Discover/Amex cards!

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