Coinbase Going Backwards

Coinbase Going Backwards – Elimination of Key Client Services + Needlessly Complicating Merchant Transactions = Disaster

Coinbase going backwards has made life much more difficult the past few weeks.  Up until March I could sell Bitcoin and turn it into usable cash in less than 30 minutes right from my laptop.  Then Coinbase utterly eliminated PayPal which now means I need to wait DAYS for a bank transfer.  In the “good old days” of just last month I could’ve sold Bitcoin on Coinbase, had the proceeds transferred directly to PayPal within seconds and then have the money sitting in my checking account in less than 30 minutes.  All I would need to do is agree to PayPal’s pittance of a 25 cent transfer fee via debit card.

But alas PayPal has disappeared from Coinbase altogether which has rendered this quick, inexpensive solution impossible.

But wait it gets better.  An email I received from Cheapair just last week is further proof of Coinbase going backwards:

A Letter to Our Bitcoin Customers
Dear Traveler,

Since 2013, CheapAir.com has been accepting Bitcoin as a payment option for flight and hotel bookings and we hope to continue to do so well into the future. During this time, it has been a thrill to meet so many extremely smart, incredibly passionate members of the Bitcoin community and we appreciate to no end the support and loyalty that the group has shown us.

However, today we face some challenges and we’re asking for your help in finding solutions. We were recently informed by our processing partner, Coinbase, that they will no longer support “custodial” solutions for merchants, and are removing a number of the tools and features that we rely on to accept Bitcoin from CheapAir.com shoppers. These changes are scheduled to occur in a matter of weeks.

Rather than dwell on this, we are taking this as an opportunity to deliver to you an even better solution with even more digital payment options. In the coming weeks, we hope to:

  • Begin accepting additional digital currencies like Bitcoin Cash, Dash, and Litecoin. We have already begun testing these.
  • Establish a dedicated customer service phone line and email inbox staffed with advisors who have a deeper understanding of digital currencies and how they work. Admittedly, that’s been a challenge with our call center team (my fault, not theirs) and I know this has led to some frustration.
  • Automate some processes that have been semi-manual, so we can issue refunds more quickly, or generate/re-generate a BTC invoice for a booking made over the phone or by email.

To go where we want, however, we need a reliable processing partner. The reality is, as much as we love Bitcoin, our travel supplier partners (airlines and hotels) just aren’t there yet. Because we have to immediately transfer to them most of what you pay to us, we have no choice but to convert BTC to fiat as payments come in. Coinbase has been providing that service for us, but at the end of the month they are getting out of that business, leaving us scrambling for an alternative.

Our intention at this point is to use BitPay as a processor. We have had a great experience with them so far and our integration is largely complete. But our one giant concern is that Bitpay does not support “non-payment protocol wallets” (wallets that aren’t BIP-70 compliant). So if you do not have a compatible wallet, you would have to get one and use it as an intermediate stage for your Bitcoin payment.

We understand what Bitpay is trying to accomplish. The issues they are trying to address–delayed or incorrect payments–are real and were especially rampant back in December and January when transaction volumes spiked. On the other hand, I am not keen on the idea of asking our customers to, in many cases, do more work or change wallets just to be able to transact with us.

This is where we’d love your input. Do you buy from other Bitpay merchants? Do you find the BIP-70 wallet requirement to be reasonable or too onerous? Candidly, would this make you more or less likely to do business with us?

Please feel free to reach out with thoughts or suggestions by commenting on our blog, tweeting @CheapAir, or emailing me directly at jeff@CheapAir.com.

Thank you again for your continued support,

Jeff Klee
Founder and CEO

 

So Coinbase lost a large corporate client and Bitpay wins one. That’s the very nature of the free market at work.

Regular readers will easily recall how I bought a plane ticket with Bitcoin via Coinbase on CheapAir.com earlier this month in a simple, hassle-free transaction.

I am truly disappointed in Coinbase. For so long I’ve been seeing them do so many good things to move cryptocoin forward into mainstream acceptance. Up until recently I have truly been a fanboy. All of the recent announcements of promising new hires not withstanding, it’s impossible not to see that Coinbase going backwards is a real thing. And a real sad thing.

Coinbase going backwards needs to stop. Coinbase gave up so much ground they won by their asinine actions lately. They need to resume forward thinking and decisive action if they hope to maintain their dominant position as a cryptocoin exchange.

As an extension of my thinking I am going to visit a Bitcoin ATM machine here in the Las Vegs valley. I expect an attempted robbery vis a vis their published exchange rate, transaction fees, etc. Expect a full report from me within the next 48 hours. Personally, I expect to give Coinbase an expanded business model as a result. Stay tuned!

Coinbase Having Problems With PayPal

Coinbase Having Problems With PayPal – Technical Glitch or PayPal Policy?

Yesterday I tried to move some funds from Coinbase to PayPal when I discovered Coinbase having problems with PayPal.  I had made a Coinbase transfer to PayPal just a few days earlier which is what surprised me.  I tried it 2-3 times and no go.

That ended up being a good thing as the price of Bitcoin continues to plunge.  So Coinbase having problems with PayPal ended up being a good thing in the short term.  Remembering reading somewhere that PayPal was cracking down on not only cryptocoin transactions but also crowdfunding transaction I decided to dig deeper.  And guest what I found?

“You may not use the PayPal service for activities that involve currency exchanges or check cashing businesses”.  I suspect this is why Coinbase having problems with PayPal has become a thing.  A full tread of the Coinbase PayPal thing is here. I’ve been using PayPal for quite a while now to quickly transfer funds of out of Coinbase to my bank account via PayPal.  With PayPal’s new 30 minutes-or-less transfer of funds to your bank account via a debit card for just 25 cents, I was using it all the time.

Now with Coinbase having problems with PayPal (official acknowledgement below) coupled with the discovery of PayPal’s own policy it seems possible that direct access between PayPal and cryptocoin exchanges is coming to an end.  On the other hand, Coinbase has had problems with PayPal before which ended up being resolved as discussed on Reddit.

Coinbase Having Problems With PayPal

In light of recent push back from banks towards their customers in handling cryptocoin transactions my sense of suspicion surrounding Coinbase having problems with PayPal is understandable.  I certainly hope this problem is technical in nature and not a sudden policy enforcement issue with PayPal.

Ripple XRP Craters on Coinbase News

Ripple XRP Craters on Coinbase News

Wild speculation and unfounded rumors that Coinbase would be offering XRP trading were unfounded; as a result Ripple XRP Craters on Coinbase News that they are not offering XRP trades at the moment.  Today XRP hit a low of $2.45 and hovered around and about $2.65 most of the day.

Putting aside opinions of Ripple XRP as a manipulative instrument of the global banking institution as a whole, this cryptocoin investment is wildly speculative in ways not even Bitcoin itself.

XRP ran to wild new highs on speculation over the past 48 hours that Coinbase would implement Ripple XRP trading as early as today.  Apparently Coinbase took notice and responded quickly with an official statement…

Ripple XRP Craters on Coinbase News

Ripple XRP Craters on Coinbase News shouldn’t come as shocking news to any cryptocoin trader; wild highs and depressing lows come freely and easily when wild speculation with an absence of facts take over reason.

All that being said we’re not surprised by the fact that Ripple XRP Craters on Coinbase News.  Not to take sides but I must say that the centralized nature of XRP flies in the face of what cryptocoin is meant to be.  We need look no further than Bitcoin when considering what cryptocoin is meant to be.

What’s next for Ripple? I won’t even begin to speculate even if I had a perfectly functioning crystal ball.  Ripple has been on the rise over the past few weeks which is an unmistakable fact.  What may happen next is hard to predict even among the smartest people in any given cryptocoin trading room.  So what’s next for cryptocoin investments? Pardon me for sounding like a parrot but the answer remains Bitcoin.  It remains far and away the gold standard in Bitcoin investments.  I advise against seeing any shortcuts to cryptocoin profits and stick with a winner with a proven track record.

 

 

 

Bitcoin Mining for Beginners Episode 3

Creating a Bitcoin Wallet

In my last installment, I had just completed my first mining rig and researched my cryptocurrency of choice.  I then realized that I needed a bitcoin wallet, but I had no idea what this entailed.

You see, the layman’s conceptualization of a wallet is one that is made of durable material, holds physical cash and an array of cards, and folds up neatly enough to fit in one’s pocket.  This concept isn’t too far off for a crypto wallet for holding Bitcoin or other cryptocurrencies.  But it’s still far more abstract and requires a decent amount of configuration.  (If you haven’t read my previous installment in this series, you should first check it out here)

Offline Wallets – Bitcoin Core

The first bitcoin wallet you will typically find when doing your initial research is included in a program known as Bitcoin Core.  This is a wallet that you have to store locally on your own PC, and you are wholly responsible for backing it up and maintaining its security.  If you do not keep your offline wallet safe, you are apt to lose any and all Bitcoin and/or other cryptocurrencies you mine or buy.  This will mean you lose your investment, which is much like losing your own wallet filled with cash.

Bitcoin Core Synchronization Bitcoin Core – Initial Setup

There is no assurance of safety and no expectation that any Bitcoin you keep in an offline wallet will remain if you don’t perform due diligence and keep your offline wallet secure and backed up.  This is the biggest con to using a wallet in this manner.  However, if you safeguard your Bitcoin in an offline bitcoin wallet, you can greatly protect it from most fees that come with using online wallets, which will be discussed later.

Bitcoin Core - Ready

Bitcoin Core – Ready to Send and Receive

Online Wallets – Coinbase

The next option I researched when starting down my path to mining Bitcoin was using online wallets, such as Coinbase.  Online wallets usually resemble online bank accounts.  They typically allow you to buy, sell, and exchange Bitcoin and other supported cryptocurrencies in real time.  Additionally, online wallets will allow you to send and receive coins to and from other users for goods and/or services rendered elsewhere.

 

Coinbase Dashboard

Coinbase Dashboard

In my travels, I settled on using Coinbase as my online wallet of choice.  Coinbase only deals in 3 cryptocurrencies: Bitcoin, Ethereum, and Lytecoin.  However, Coinbase is highly reliable and very well respected in the world of cryptocurrency.  Given their track record, I decided to use them as my online wallet provider.  Thus far, in my 6 months of mining and trading crytpocurrencies, I’ve made several purchases of Bitcoin and Ethereum.  And as far as ease of use is concerned, Coinbase is tops in my book.  I’ve never had any problems with my transactions, and receiving my coins has always gone smoothly.

Another feature that is useful in using an online bitcoin wallet is that you can have your mining pool accounts automatically transfer your mined Bitcoin to your online wallet using a specific receiving address.  For more on sending and receiving addresses, please consult this extensive guide.  I’ll share my experiences with mining pools in my next installment.

Paper Wallets – A Bitcoin Wallet with Paper

Paper wallets can be used in a very similar way to offline wallets by manner of storing your coins offline.  Rather than using a hard drive or other hardware, they are stored on a piece of paper that has a public and private key, as well as a QR code.  These wallets are fully offline, and they will hold any amount of Bitcoin or other cryptocurrency as you want to store on them, but they do require either an offline or online wallet to load them with Bitcoin.

Paper wallets can be extremely secure, as they only exist in a paper format, and are only known to you and anyone with which you share the private key.  The biggest caveat is that if you lose this private key, you lose all the funds loaded onto it.  The vast majority of people will use paper wallets to fully store their Bitcoin offline, and paper wallets will typically be stored in a safe.

 

Bitcoin Paper Wallet - Blurred

Bitcoin Paper Wallet Example

I purchased a paper wallet from a seller on eBay during my experimentation. Therefore, I understand first-hand just how volatile and scary the concept of storing Bitcoin on a paper wallet can be.  Using a paper wallet is entirely too risky for myself, and should be considered as such for fellow newbies.  Paper wallets are an extreme way to keep your cryptocurrencies offline and away from most fees associated with online wallets.  However, paper wallets are extremely vulnerable to theft, disaster, or simply being lost.  For this option, I advise you avoid it unless you can stomach the enormous risk that comes with the territory.

Well, we now have a wallet for our coins!  Next time, we’ll explore mining pools in an in-depth manner.  Look to this space for more of my adventures in Bitcoin!

[ Editor’s note: A bitcoin wallet or a wallet to hold any kind of cryptocoin is something every cryptocurrency investor needs – not just coin miners.  Eric wrote an article that everybody can benefit from. ]

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