

How to Accept Bitcoins Without Fees - zhoutong
http://blog.nameterrific.com/2012/12/the-complete-guide-to-accept-bitcoins-without-fees/

======
lucb1e
> However, processing Bitcoin payments is a completely different experience.
> There's no paperwork (just code), no set-up cost and everyone can get
> started in no time.

So true. That's what I love about Bitcoin: once you understand the technical
working, there is nothing to it. It's all simple rules instead of fees,
interest rates and chargebacks. And all that you own is actually really and
truly yours. No bank could possibly take it from you when they go bankrupt.

~~~
TazeTSchnitzel
There's something rather special about effectively hosting your payment
processor (the Bitcoin RPC server) yourself.

------
DiabloD3
Flagged.

zhoutong is a known scammer. Do not do business with him. He needs to be
banned on HN as well.

Edit: I'll quote what I said in reply to someone else:

Zhoutong is a scammer, he operated an illegal bucket shop known as Bitcoinica
and tried to hide the true nature of the operation just so he could close it
down at its peak and steal several thousand BTC from customers trading futures
on his platform,

He then tried to cover up the theft by selling it to the people who run
Intersango and tried to blame them for the missing Bitcoins. He also tried to
blame "hackers" for it.

In addition, users are suing him for close to half a million dollars for his
lies. His defense is hes claiming he was 17 at the time (early 2012).

[http://arstechnica.com/tech-policy/2012/08/bitcoinica-
users-...](http://arstechnica.com/tech-policy/2012/08/bitcoinica-users-sue-
for-460k-in-lost-bitcoins/)

~~~
zhoutong
It's really unfortunate that the link you referenced contained too many wrong
understandings and misrepresentations. A little research can make the
following clear:

1\. Bitcoinica was a regulated financial service provider before closing down.

2\. I sold 100% of it in October 2011, ~5 months _before_ the first breach.

3\. There has been no conclusive evidence about the last hack.

4\. I was not a defendant of the said lawsuit. I have not provided any defence
regarding the lawsuit.

You're a credible person, but I hope you have credible sources to post here.

I have tried my best to discountinue my involvement on Bitcoin projects while
keeping supporting the currency. I'm genuinely creating value through startups
and you should be able to see this through my effort in NameTerrific.

~~~
zhoutongd
You're a con arstist.

Nothing more.

~~~
zhoutong
I do not understand why anyone would use an account created 9 hours ago and
named as a variant of my legal name to criticize me personally without
conclusive evidence, other than in an attempt to destroy the reputation of an
18-year-old entrepreneur, who is also a victim of the mis-management of his
former startup after acquisition.

EDIT: I'm open to any discussions about your opinions and ideas. Feel free to
email me (email in my profile).

------
barmstrong
Worth noting that Coinbase also does not have a fee to accept merchant
payments (and keep them in bitcoin):

<https://coinbase.com/docs/merchant_tools/payment_buttons>

If you decide to cash out to USD the fee is 1%.

~~~
zhoutong
Thanks Brian. Coinbase is really cool and I also recommend it to everyone who
plans to accept Bitcoin online, especially US merchants.

There are many services in the Bitcoin world with highly similar features and
it's great to see a healthy competition in such an early stage.

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logn
Without Fees? Nice try. The article doesn't cover this at all. I think it
means "Without the High Fees of Credit Cards". Bitcoin has fees and the
article mentions this. If anyone would actually like to write an article about
avoiding BTC fees, I'm interested in that.

~~~
TazeTSchnitzel
Yes, Bitcoin has fees, but they're transparently, voluntarily paid separately
by the customer, not automatically deducted.

~~~
logn
In practice it's not easy to avoid the fees. Maybe I need a custom client? Not
sure. But I know what you're saying is true. If someone could explain how that
would be awesome.

~~~
TazeTSchnitzel
IIRC you weren't forced to by the default client in the past. Fees are
actually optional, but there is no motivation for miners to include your
transaction if you pay none. Hence the client tries to make you pay a fee. If
you pay a higher fee, that means it goes through sooner since miners will of
course priorities high-fee transactions.

------
StavrosK
I recently moved my domains to NameTerrific, and I would definitely recommend
them. I love the management interface and they're very simple. Much, much
better than the bloated GoDaddy.

------
hnolable
This isn't entirely related but I'd be interested if anyone knows the tax
implications of _spending_ bitcoins. What happens if you receive bitcoins when
they're worth 10 USD and then spend them when they're worth 20 USD. What tax
rules apply here?

~~~
zhoutong
The same problem can happen with any foreign currency. So the normal foreign
currency accounting rules apply.

IF you're operating as a business:

When you receive 1 BTC at 10, assuming your accounting currency is USD, you
should record a 10 USD revenue and a 1 BTC cash inflow (shown as 10 USD in
balance sheet).

If the value of 1 BTC rises to 15, for example, you need to make an adjustment
to the Unrealised Foreign Currency Gains and Losses account to reflect the
change. The BTC cash account should be shown as 15 USD in balance sheet (with
the same 1 BTC holdings) and there's an unrealised foreign currency gain of 5
USD (a temporary contra-expense account in equity section).

When you finally spend the Bitcoin at 20 USD, close the "unrealised" account
to the "realised" account, and increase the realised gains to 10 USD. Now you
should have a 20 USD expense, 0 USD cash balance and a 10 USD realised foreign
currency gain. That's 10 USD worth of "net" expense.

So, 10 USD revenue and 10 USD "net" expense. Everything is balanced. That's 0
USD closed to P/L.

IF you're a consumer:

It should be treated as 10 USD capital gain because you disposed the asset at
a higher value than the cost base. Equivalently, you can claim a capital loss
if you dispose the asset at a lower value than the cost base. However, whether
this is acceptable in your country depends on your actual circumstances.

------
justinkelly
hey zhou, what % of purchases use bitcoin?

~~~
zhoutong
Currently about 20% of NameTerrific payments are made in Bitcoin. Credit card
is expected to be the dominant payment method anyway.

~~~
justinkelly
thanks, thats higher than i expected

are you specifically targeting the bitcoin crowd with nameterrific?

~~~
zhoutong
Not really because there wasn't any advertising happening around the Bitcoin
idea. However we did a soft launch within the Bitcoin community when the
payment solution wasn't ready, and that gained some initial adoption (with
100% Bitcoin payments).

Domain market is extremely competitive. But for domain registrars that accept
Bitcoin, I'm quite confident that NameTerrific is simply the best. That's
probably why the adoption rate is quite high.

EDIT: Just to clarify, we're seeing much more credit card orders coming up
recently so it seems that the market for Bitcoin is quite limited. I guess
even the largest Bitcoin merchants (like WordPress) may not have a large
absolute figure for Bitcoin use. However, to us, accepting Bitcoin is somehow
a symbol of "geekiness" so it's a good thing to continue.

------
zhoutongd
ZhouTong is a thief and con man.

<https://bitcointalk.org/index.php?topic=95738.0>

He WILL steal your money.

Do not trust him.

~~~
StavrosK
I don't understand this, it seems to be posted all over this thread, but it
doesn't make much sense. Did anyone get it?

~~~
kgo
There's a lot in that thread to sort through, but...

The exchange that zhou founded had about 60,000 bitcoins stolen in two
instances. Plenty of evidence pointed to an inside job, probably by zhou
himself.

This link provides Zhou's explanation of what 'really' happened, where he
claims a Chen Jianhai, Chinese multi-millionaire with ties to organized crime
who hunts for ancient relics and artifacts in his spare time, was the 'real'
thief.

<https://bitcointalk.org/index.php?topic=95795.0>

I'll leave it to others to assess the plausibility of this scenario.

~~~
StavrosK
Ugh, now I font know if I can trust them with my domains. Too bad, I might
have to move away.

~~~
zhoutong
The events following the acquisition of my previous startup Bitcoinica gave me
a big hit on reputation. This made really frustrated as well.

Basically I sold 100% financial interest in October/November 2011 and I
stopped all involvement in the company after April 2012 when I started
NameTerrific. The new management was unable to process refunds to affected
customers and a series of chaotic events blew up. Many were made up
(especially the insider job theory about the last hack) for profit (for
example, the owner of the exchanger who wrote the story retained $40,000 funds
illegally and refused to provide any information needed to reclaim the money).

Your domains will be safe as I had absolutely no intent to operate any
unethical business. Bitcoinica was controlling at peak $1 million in assets
during my management and nothing went wrong at that time.

