We are not as sanguine about eBay 'rescuing' Bitcoin as this article implies. Why? Because in the past PayPal, a component of eBay, has acted conspiratorially on behalf of the banksters and fedgov "regulators" by stealing the donor account for Wikileaks. Maybe others we don't know about. If you think PayPal had a sudden stroke of morality, your tin foil chin strap is too tight.
Rather we are of the growing opinion that the banking cartel would rather have an entree, take over the action rather than squash it outright at this time. It's a functioning shell of an entirely new competing "money" and they want it bad enough to steal it. Beware!
Another observation we find revealing is a state, in this case California, finds interference and obstructing Bitcoin within their state is in the best interests of the corporate monopolists (see below)!
How eBay could rescue Bitcoin from the feds
11 September 13 by Robert McMillan
Ariel Zambelich/WIRED
Bitcoin, the world's most popular digital currency, has a big problem. Just ask David Spitzer.
On 20 August, Spitzer sold a Bitcoin on Mt. Gox, the world's best-known Bitcoin exchange, and immediately tried to move the money to his US bank account. Three weeks later, he's still waiting for the cash to appear. "It's taking an extraordinary amount of time," he says.
Earlier this year, after the feds seized its US bank accounts -- and $5 million (£3 million) in cash -- Mt. Gox temporarily suspended transfers to the US. At the time, the company said, it was halting transfers in order to pull off a technology upgrade, but as far as US customers like Spitzer are concerned, it hasn't been much of an upgrade. It's seriously hampering their ability to use the Bitcoin system.
Like other Bitcoin exchanges, Mt. Gox is having a hard time with US banks because there are big questions about whether it meets federal and state money transmission business regulations (the company did not respond to messages seeking comment).
But there's another operation that runs both a marketplace where Bitcoins are bought and sold and a fully compliant money-transmitting business that, observers say, could rescue Bitcoin from its biggest problem.
That company is eBay, and the money transmitter is its well-known subsidiary, PayPal.
"A licensed money transmitter who gets into the business of doing this is going to have a tremendous leg up on someone who is not a money transmitter because they have an accepted regulatory structure in place," says Carol Van Cleef, a banking regulations expert and partner and with the Patton Boggs law firm in Washington, DC.
The question is: will eBay come to Bitcoin's rescue? eBay doesn't allow payments via Bitcoin, and the company does "not have any changes planned to our Accepted Payments Policy," according to a note sent to Wired.com by company spokeswoman Kari Ramirez. But you can still buy and sell Bitcoins on eBay's marketplace and then pay for those transactions in dollars via PayPal -- it's a Bitcoin exchange by default -- and eBay is showing some signs that it wants to do more with Bitcoin.
The company recently posted a Bitcoin explainer to one of its blogs, and added a new "Virtual Currencies" section to its online marketplace, not too far down the page from "Hobo Nickels". Hours after we asked eBay about it, the section was removed, and when we asked Ramirez to explain why, she said she'd look into it and then stopped answering our messages.
In April, eBay CEO John Donahoe said that the company was looking at ways to integrate Bitcoins into PayPal. "It's a new disruptive technology, so, yeah, we're looking at Bitcoin closely," he told the Wall Street Journal. If eBay could figure out some way to become a working marketplace for Bitcoin, "they could dominate the space," says Patrick Murck, legal counsel with the Bitcoin Foundation.
But there's a problem, and it's a big one: Bitcoin transactions are irreversible, but PayPal allows transactions to be reversed -- something called a chargeback. That means that unscrupulous buyers could pick up a few Bitcoins on eBay and then claim that they were never delivered, initiating a chargeback that would leave the seller without Bitcoins or any money from PayPal. "You can get defrauded pretty easily selling Bitcoins on eBay," says Murck.
That's what happened to James Larisch when he tried to sell $225 (£143) worth of Bitcoins on eBay in August. Larisch was left holding the bag after buyers initiated chargebacks after taking his Bitcoins. "I don't think it's economically feasible for PayPal or eBay to announce their acceptance of digital currency like Bitcoin until they develop a way to facilitate transfers without risk of widespread fraud," he says.
That may be a tall order for eBay, but on the other hand, if any company has the fraud-fighting experience to pull this off, they're the one.
And there's another good reason for eBay embrace Bitcoin. If someone solves David Spitzer's problem, making it easy to move money between the Bitcoin world and US bank accounts, PayPal could find itself up against a serious challenger. Embracing Bitcoin would be a "natural evolution" for PayPal, says the financial regulations lawyer Van Cleef. "Otherwise, they could very well find their business model outdated."
This story originally appeared on Wired.com
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