
PayPal’s Braintree Embraces Bitcoin, One-Touch Payments - Aqueous
http://techcrunch.com/2014/09/08/paypal-braintree/
======
dangerlibrary
Serious question:

If one is engaged in entirely legal activities - no money laundering, no
drugs, no illegal weapons, no tax evasion, no slipping around international
monetary controls - why would one want to use Bitcoin?

With the volatility of Bitcoin's price, transfer costs of traditional payment
methods (1-3%) are totally dwarfed by the risk of holding Bitcoins for even a
short period of time.

Maybe there is some opportunity for arbitrage in currency conversion rates,
because of the low daily trading volume? But that doesn't seem like a likely
profitable investment when you can lose 4% of your value at 3am because of a
cascading margin call on a single exchange.

Other than currency speculation and the ease of evading the law, why would
anyone want to exchange a reasonably stable national currency for bitcoin?

~~~
IkmoIkmo
> why would anyone want to exchange a reasonable stable national currency for
> bitcoin?

Name me 10 currencies you'd be comfortable holding. It'll probably be very
difficult. Fact is, billions use currencies with high inflation rates and with
relatively short lifespans. And it's not just places like Zimbabwe that have
many problems besides insane inflation the past decade. It's also relatively
developed countries like Argentina that suffer from insane inflation. It's
also small stable countries with a nice standard of living ($27k GDP PPP) with
an educated population like Cyprus where many lost their savings as bank
deposits were frozen or seized.

And that's just protection from governmental malfeasance that hundreds of
millions have to be aware of. But it's also the fact that billions are
unbanked. We at HN know more than anyone that providing a physical service
(like mail delivery) is 1 million times more expensive than a digital service
(like e-mail). Same for banking, for vaults, for ATMs, for services like
lending, payments, remittance or money transfer. A digital version can be much
cheaper, as well as more accessible. (for a bank you often need proof of
identity, residence and employment. Good luck when you have no birth
certificate, when you live in a slum, when you have an off-the-record job like
selling fruit on the corner of the street). Digital banking can bring cheap
financial services to hundreds of millions who don't have it, yet have
(intermittent) access to networks as simple as SMS or radio, which can plug in
to gateways to the bitcoin network.

Next up is us, the wealthy who enjoy relatively nice financial services.
Bitcoin can save 1-3% in fees on any transaction. Imagine that there's a 1-3%
tax on everything, not value added, everything, every transaction, whether B2C
or B2B, and you have a way to remove that. That's very significant. Entire
industries run on margins of 1-5%. Amazon's 2013 margin was 0.35%, imagine
they could shave off even 0.5%.

Now that doesn't mean we all should actually buy and hold bitcoin. As you say,
the volatility dwarfs this percentage. But volatility can be exclusive to
investors. For example, Bitreserve (founded by the founder of CNET) lets you
lock in the price. That means you can buy $100 of bitcoin, and see $100 on
your account, as if it was Paypal. And then you can spend that $100 anytime
you want, and it'll always be worth that much. On the backend the service then
lets investors create a market to lock in that price, where various investors
make short or long bets, a derivatives market can take out the volatility for
the customer, thereby allowing people to use bitcoin, save costs, yet be
shielded from volatility. That means business to business payments, too.

Besides that there's lots of other things. Like the fact it can be much more
secure. Creditcard fraud is rampant as your password is essentially on the
card and you have to share it everytime you pay, it's crazy. Chargeback fraud
is an issue. Identity theft is therefore an issue. And you can envision crazy
things like a Google driverless car paying, on the fly, to another driverless
car infront of it, to move away, so that it can take that lane and go faster,
because the one in the back is willing to pay extra for speed, and the one in
front is okay with arriving a little later. Those kinds of thing can almost
only be built on a global, permissionless protocol layer. So indeed none of us
may use bitcoin, it may just be a machine to machine currency, it's too early
to tell, it can have an impact in many different ways.

~~~
dangerlibrary
But so little of that is exclusive to BTC as opposed to a digital transaction
valued in national currency, and almost none of the benefits you list accrue
to consumers - they all benefit merchants.

\- Getting rid of charge back fraud also gets rid of charge backs - an
important consumer protection.

\- I don't need 10 currencies I'd be comfortable holding, but any of these -
[http://fxtrade.oanda.com/analysis/currency-
volatility](http://fxtrade.oanda.com/analysis/currency-volatility) have far
lower volatility than BTC.

\- Bankless people need banks, not cryptocurrencies. There's no difference to
a bankless person between a mobile app to an online bank and a bitcoin
gateway.

\- My credit card pays me back a chunk of that "1-3% tax on everything," my
bitcoin wallet doesn't. Until bitcoin gains market share and the tax goes
away, I'm just paying more to use bitcoin.

\- My credit card company provides fraud protection for when my card is
stolen, my BTC wallet does not.

Looking to the future doesn't make me want to transact in BTC right now.

~~~
beaner
\- Chargebacks happen when cards are stolen. Cards are stolen because they are
fundamentally pull payment methods. Every time you pay, you hand the keys to
your money over to someone else. Think about this for a second, because it is
absolutely insane.

Whenever you pay with a credit card, you have to trust the merchant to (1)
charge the right amount, (2) only do it once, and (3) themselves take your
privacy seriously enough to not have your information stolen by another party,
who, if they did get hold of your card info, could abuse it at will and then
share with more 3rd parties or have it stolen from them!

Credit cards are broken fundamentally. If the only kinds of payments were push
payments, where consumers choose when to pay and the merchant has no ability
to pull at will, the entire issue of credit card thefts - think Target, Home
Depot, or the Russian hackers - would simply not exist.

So chargebacks due to fraud simply wouldn't be there. Sure, there are other
use cases for chargebacks, like you felt you didn't get what you paid for or
something, but that switches to a customer service issue which increases
competition among merchants.

\- Who cares about volatility? You don't need to own bitcoin to use it. When
you want to send it, buy it at the time, then send it. Big whoop.

Also what is volatility on $100? Are you that concerned about losing or
gaining $5, $10, $20 in a day, with a total maximum limit of losing at most
$100 if it goes to zero, which seems extremely unlikely? Nobody said you have
to invest your life savings. Participating in the technology is as expensive
or as cheap as you would like.

\- "Bankless people need banks, not cryptocurrencies." \- _Why?_ You didn't
actually say.

"There's no difference to a bankless person between a mobile app to an online
bank and a bitcoin gateway." \- Which is _great_ , because since "people need
banks" (your words), bitcoin can finally provide it to them.

\- "My credit card pays me back a chunk of that "1-3% tax on everything," my
bitcoin wallet doesn't." \- This is short-term thinking. Wouldn't you want
something that can provide lower fees to gain market share in the long term,
so that discount is not just available to the exclusive group of people who
qualify for nice credit cards, but to every person, regardless of
qualifications or payment methods?

\- Last point is covered by my first point.

~~~
battani
> So chargebacks due to fraud simply wouldn't be there.

That is far from the only reason there is credit card fraud. Actually most
credit card fraud is linked to identity fraud (a hacker stealing someone's
financial credentials or posing as them on an online/offline store).

Most of the credit card information stolen from Target and Home Depot is not
used but sold as quickly as possible on underground forums to "the greater
fool" who is willing to take a risk to use it (if it still works).

Because of the chargeback system, those millions of credit cards stolen are
not a huge issue for consumers because they can immediately lock down their
card. Cards are replaceable keys. If you believe that you've been compromised,
chargeback for whatever amount was stolen from you and change cards. It's a
pretty incredible system for consumers when you think about it.

Contrast that to bitcoin. Your third-party bitcoin storage service gets
hacked, your bitcoin are gone forever. You choose to store your bitcoin
locally and you're exposed to physical theft (like keeping cash under your
mattress).

Bitcoin does not solve the fraud/theft problem. I facepalm every time I hear
that argument. Chargebacks are omnipresent today because they protect
consumers because theft has always been and will always be part of any
financial/payments system — simply because thieves don't target "how" you pay
(push vs pull doesn't matter) but target where you store your wealth.

~~~
beaner
> thieves don't target "how" you pay (push vs pull doesn't matter) but target
> where you store your wealth.

I wasn't arguing against this. Your credit card is where your wealth is
stored, if it can be used to purchase things. And your wealth is stored with
Target if they have your CC info. So places like that seem a likely target for
attacks.

> Contrast that to bitcoin. Your third-party bitcoin storage service gets
> hacked, your bitcoin are gone forever.

M-of-N key schemes will prevent this in the future. Also not the only option.

> You choose to store your bitcoin locally and you're exposed to physical
> theft (like keeping cash under your mattress).

I don't see how. If your stuff is encrypted or your devices locked, then they
would not be susceptible to theft from your mattress. They'd have to be stolen
from your hand while unencrypted or device unlocked.

Not sure that I buy that most CCs are somehow gotten through a means other
than 3rd parties who have them.

Another point is that if you get your info stolen, why should the merchant
take the loss? They've already given out the product. It's your money to be
responsible for, if the merchant doesn't hold the means to charge it, which
they wouldn't with bitcoin. This realization will lead to more secure systems,
since consumers would not be able to charge back willy-nilly.

~~~
battani
> Your credit card is where your wealth is stored.

Your credit card is just a means of payment (a key). Your wealth is stored at
your bank.

All these merchants may have your bank keys, but they can't use it to charge
you illegally because they will incur costs (a chargeback fee and then some).
It a great system in which both the consumer and the merchant are incentivized
to behave correctly...

------
johnyzee
Coinbase business development is kicking ass and taking names.

~~~
Mahn
They'll end up bought by a big name company if Bitcoin continues to grow, I'm
sure.

------
cvburgess
The official Braintree post on the one-touch side of things is super
interesting and vague[1] - does anyone know what the UX is like from a
developers point of view?

[1] [https://www.braintreepayments.com/blog/one-
touch](https://www.braintreepayments.com/blog/one-touch)

~~~
benmills
Hey I work at Braintree on our SDKs. You can find the list of things you need
to do to enable one touch here[1]. For Android there is nothing outside a
normal Braintree integration you need to do and for iOS you need to register a
URL type as well as make two changes in your app delegate to tell us about it.

We generally think about two ways you can integrate with Braintree on the
front-end: the drop-in UI and custom. Drop-in [2] means you yield control to
us, but you get a dead simple integration which includes one touch paypal and
venmo out of the box. If you go the custom[3] route it's obviously more work
to integrate, but adding one touch only requires some button that starts the
paypal or venmo flow.

 __Edit: __You can also download ParkWhiz
([https://itunes.apple.com/us/app/parkwhiz-find-book-
parking/i...](https://itunes.apple.com/us/app/parkwhiz-find-book-
parking/id595743376?mt=8)) and install the PayPal app to see the user
experience for yourself!

[1] [https://developers.braintreepayments.com/ios/guides/one-
touc...](https://developers.braintreepayments.com/ios/guides/one-
touch#enabling-one-touch) [2]
[https://developers.braintreepayments.com/ios/sdk/client/drop...](https://developers.braintreepayments.com/ios/sdk/client/drop-
in) [3]
[https://developers.braintreepayments.com/ios/sdk/client/payp...](https://developers.braintreepayments.com/ios/sdk/client/paypal-
and-venmo)

~~~
cvburgess
Thanks for the links! The UI looks clean enough, I wonder how many users will
chose to use paypal/venmo over adding a cc...

------
blueking
Bitcoin was created to get rid of the likes of Paypal.

~~~
dreamweapon
Was it?

As in, do you have some empirical basis for that statement -- as in, you know,
something related to actual statements made by the creator(s) of the original
bitcoin protocol itself? Or is it just something you find nifty to believe in
(therefore it must be true)?

Please clarify.

~~~
Mahn
The original creator(s) just envisioned money designed to work in a digital
medium. From there people derive that if Bitcoin is money for the internet it
can replace PayPal, though in practice is more complex than that.

The reality is that as it stands now, Bitcoin is hard to understand and
properly use, so even though it can be used as-is if you know _well_ what you
are doing and are careful, for Bitcoin to be usable for the vast majority of
people a layer on top that makes it more consumer friendly is most likely
necessary. Thus Bitcoin itself probably won't replace PayPal on its own, but a
service that "consumerizes" it like Coinbase or Circle might, if Bitcoin were
to become massive.

------
ycombinatoracc
First they ignore you, then they laugh at you, then they fight you, then you
win.

~~~
viraptor
I don't think bitcoin won yet. I haven't heard of paypal allowing people to
pay for bitcoins yet. (as in transfers of funds to exchanges) They accept it
for their service, but noone else can.

~~~
clamprecht
Using PayPal is a really bad way to sell bitcoins, because PayPal lets the
buyer dispute the transaction, reversing payment. If you sell bitcoins via
PayPal, you're taking a big counterparty risk (not to mention the 3rd party,
PayPal itself).

~~~
ewoodrich
> PayPal lets the buyer dispute the transaction, reversing payment.

What would be the alternative? CC, ACH, and most other payment systems also
have a mechanism for chargebacks.

~~~
tracker1
Small claims court.

Seriously, this is precisely the kind of thing common law and the court system
is for. Just the same as your recourse with cash. As for international trade,
buyer beware.

------
sassypants
Bitcoin remains the best and most liquid savings vehicle over the last five
years of its existence. Assuming savings = holding currency for over 1 year.

On 98% of the days that you could have purchased Bitcoin you would have
realized an increase in purchasing power in a year's time. In those 2% of
cases where you could have purchased Bitcoin and seen a loss over one year,
you would have still seen an increase in purchasing power in another 300 days.
(This is mostly dealing with the June 2011 bubble)

There has never been a time where you could hold Bitcoin for 2 years and lose
purchasing power. On the contrary, holding Bitcoin brings on average a 5x per
year return in purchasing power.

Past performance, future gains, blah blah. Judgement is about taking into
consideration the facts we have now and comparing them against past
performance. There are very good reasons why Bitcoin is valued around
$6billion now and very good reasons to think it will be valued higher in the
future.

You should be placing your life savings in Bitcoin, and only purchasing the
USD that you require and holding it for as short of a period as possible. This
would have been the best strategy for 98% of 1 year periods over the last five
years, and 100% of 2 year periods over the last 5 years.

Debit cards that draw on Bitcoin balances and allow you to use the VISA and
Mastercard networks should be the most interesting products -- because they
allow you to expose yourself to the dollar's periodic collapse against Bitcoin
for the shortest period of time.

I'm sure I'll be downvoted and that people will tell you that Bitcoin is super
risky and that you should only invest what you can afford to lose -- but
shouldn't that be the case for the dollar and not Bitcoin?

The dollar loses 90% of its purchasing power against Bitcoin on semi-regular
schedules, and people keep purchasing more after each collapse. This routine
should get old after a while, but that's what happens when you don't use
Bitcoin as your unit of account!

~~~
bdcravens
You're using a time-span that's a full 20% of the item's lifespan. Anyone with
a single college level statistics class wouldn't be able to keep a straight
face reading this.

 _over the last five years of its existence_ The first exchange didn't come
online until summer of 2010.

What's the 1 year picture like for everyone who had coins in Mt. Gox?

~~~
sassypants
I've been through college level statistics classes. Nothing I learned in them
suggested that holding currency for less than a year was an appropriate
measure of savings.

You're complaining that Bitcoin hasn't been around long enough to make a
proper measure of its performance. Then you complain that people who gave
control of their coins to Mt Gox didn't get their coins back.

I don't understand what these complaints have to do with the fact that Bitcoin
has been a fantastic savings vehicle for five years running. (Or four if you
prefer)

~~~
bdcravens
I don't deny its performance, and I'm actually quite bullish on it. I just
think 365-665 days is a fairly arbitrary number, and a lifetime of 4-5 years
is not enough to draw conclusions from.

