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Process your first $1,000,000 of Bitcoin payments for free with Coinbase (coinbase.com)
140 points by FredEE on Aug 27, 2013 | hide | past | web | favorite | 49 comments

Coinbase may have venture investment, but their customer service and week-long verification process will make this a nonstarter. If you want to read some of the more entertaining stories about their customer "service" read this thread:


One of my favorites:

Well they refunded the BTC. In order to get a response, all I had to do was post on several BTC related forums and chat, contact the founders on Twitter, LinkedIn, and Facebook, and file a complaint with the government.

What a company. Now hopefully I am able to successfully transfer the coins out (doubtful).

> Well they refunded the BTC. In order to get a response, all I had to do was post on several BTC related forums and chat, contact the founders on Twitter, LinkedIn, and Facebook, and file a complaint with the government.

Note that the user did not actually have to do any of those things for a response. It made no difference. Coinbase has a queue and they get through the whole thing - you're attended to when they get to your place in line. You can make all those other posts if you want, however there's no evidence to suggest that any of it affects how quickly they get back to you.

Also, by "verification process" you really mean "ach bank transfer", which is not exactly something Coinbase invented. Interfacing with banks is difficult and time consuming and stupid - that's part of why bitcoin exists - but as long as ach is around you kind of have to deal with that. Two parties are involved in an ach transfer, and the banks are the end that take that long. You're blaming Coinbase for the problem they're helping to solve.

They're a startup. I guarantee you there's probably no more than 10 guys there. I've worked at startups and here's the deal- Support is very uneven and capital- (and time-) intensive, when you're new. You haven't worked out all the workflows yet and you're too busy building out product to know when to change gears to handle a support backlog. Eventually it gets sorted out, but the beginnings are always rocky. Don't judge a brand new service based on its support record please... I promise you that not a single person who ever worked at a startup thought "man, fuck those complaining customers... we need to build our vision!"

"week long verification process"!? I really have to call B.S. on that one. I setup a coinbase account a few weeks ago and was verified within 3 days.

I can't comment on their customer service as I have yet to need it.

I hardly think one anecdotal experience of 3 day turnaround is enough to call a second anecdotal claim of 7 days "BS"

For a process that sometimes takes 3 days, I can easily envision someone else having a 7-10 day turnaround. You make it sound like it's an order of magnitude off, but it really isn't.

Ah true. I guess I'm just really used to the 1-3 day turnaround that it seems norma. ;)

I set up my account yesterday and was verified yesterday.

They have some sort of yodelee integration with online banking that lets you verify within seconds.

Why can't coinbase follow Stripe's example of having a "publishable key" for payment forms? If it weren't for the headache of needing to make an API call to create a payment page (or button, or iframe), I would have added Coinbase support to Tarsnap months ago.

Something else that's a bit different is that you have to create an invoice/order number to send along to Coinbase, then mark that invoice as paid later. With Braintree/Stripe, the server makes a call to the service with the amount to charge and it gets back a success or fail which I can then immediately display to the user showing that the purchase went through.

With Coinbase I haven't found a way to have that tightly integrated experience.

Probably because a bitcoin transaction doesn't confirm instantly? (a block is found once every 10 minutes on average).

Exactly. Which means developing a completely separate process for accepting bitcoins over credit cards. I worked on adding Coinbase to my small website a while back but the workflow of how it works is so different, I would have had to write a whole new sales process just for bitcoin.

It seems to me that the process for Coinbase could be exactly the same as the process for Paypal -- post a form with the amount to be paid and the account money should be paid to, and get a payment notification later.

I think this is a great move. For one, it further cements their position as the best-funded, most-respected Bitcoin processor. Even putting $1mm figure into the ether raises their profile.

Their investors (USV et al) definitely understand marketplaces back-and-forth and are in it for the long game. It makes sense to do anything possible to spur merchant adoption, and this is an eye-popping way to do it. Without merchants broadly and happily accepting Bitcoin, the marketplace just can't mature properly.

What % of Coinbase's value of is captured in merchants that will process less than $1mm lifetime? I'm sure it pails in comparison to the potential profits on the (hopefully huge and forthcoming) merchants that will drive Bitcoin at the same order-of-magnitude as Paypal, traditional credit cards, etc.

Really cool giveaways (say a Tesla) seem to work for mass appeal on the other end of the double-end of this. And the press lap it up = free marketing. :)

This is negative marketing. Anyone that does $1M+ a year in online sales doesn't want their payment vendor losing money. What I want are honest FAQs and simple integration options. "Free" is irrelevant. If I can get incremental customers and I hope that means $20,000 more bucks. I don't give a shit about $400 vs. $200 vs. $0. Hell, I pay Apple $6000, and I am only kinda mad.

This is negative commenting. A new awesome feature came out and you said you don't really care about it unless they also provide X features. But then you gave no argument as to whether or not they already provide X features. This leads the reader to assume they don't, when in reality they actually do. So I'm not sure what your point is?

Agreed: I found this offer a bit strange. It alerted my Ponzi-senses.

I'm open-minded, but how can they afford to offer this for free? Will this offer be attractive paying customers, and why do they want to attract non-paying customers?

It attracts startup businesses, most of which will fail, but some of which might turn into profitable and paying customers later on. A big winner there can easily pay for all the lost ones - esp. since most startups will probably fail very early, not using anywhere close to the 1 million.

Yes, it's a loss leader. However, if they have the cash to support it for a time they might tie some very profitable businesses to their infrastructure.

>This is negative marketing. Anyone that does $1M+ a year in online sales doesn't want their payment vendor losing money.

Forgive me but won't they make money by selling the Bitcoins they receive?

They don't want to. Coinbase is in the business of payment processing, not speculating on obscure forex spreads.

This is a joke. Everyone in the bitcoin community and even in the civilized world believes that the value of bitcoin is going to go up over time.

If they are handling bitcoins then they will be making and losing their daily bread on those obscure forex spreads. The point of using a payment processor is that you don't want to accept bitcoins without a support network and hold them over time by yourself. If that's all you wanted to do, you would use the Satoshi wallet and write some RPC-JSON hooks.

And McDonalds is in the business of real estate, not making burgers.

All I'm saying is that just because they do something day in and day out doesn't make that their business.

To be honest I think doing this to get BTC to sell is a great business model if they trust the price to climb.

Coinbase is not instant like advertised, it's identity verification system to level 2(the one that is instant) is incorrect and I try it every day but it will not accept that the information I provide to prove my identity is correct, even though it is. So I'm stuck at level 1 for no reason,

Coinbase's main thing going with it is that they're the only competitor that seems to have not let the entire operation burn down(bitinstant).

The exact same thing is happening to me! Every time I try to enter my information it says:

> Your ID could not be verified at this time. Insufficient Data for Questions

I've emailed, tweeted, and posted to their support center about it with no response over the last week. They need to get that support staff[1] up and running quick.

1. http://blog.coinbase.com/post/58733449732/we-are-looking-to-...

I think they're trying to question you about database entries regarding your life in Experian-type databases. Past addresses, cars you owned, etc. If you never generated that sort of paper trail, the automated verification fails and they just won't do business with you. I too hope they can set up an alternate method soon.

They actually do do business with you in the form of a 10 btc limit at ach transfer speeds. For most people this is annoying but sufficient. They're just not willing to, you know, give a total stranger on the internet access to $5,000 worth of instantly-transferable goods without knowing their identity.

Great promotion. We just signed up. 1% of $1M is $10k, and compared to the alternatives (CC, Paypal) it's pretty huge savings. I do agree their support/responsiveness needs to be better or they'll cement a poor reputation.

PS: In terms of adoption, Bitpay has several companies doing $1M+ monthly, so this promotion isn't without meaningful value to someone.

I wonder if adverse selection will apply where people will abuse this for high frequency transfers of some sort.

Unfortunately until coinbase support non-US banks, we could only watch and sigh! :)

Too bad it's completely impossible to use the service. It takes forever to get verified and even when you do transfers hardly go through. Total waste of time when I tried it a month or so ago.

I almost double checked if its not 1 April? How will they make money?

The number of people using Bitcoin now is negligible, it may as well be 0. Coinbase is perfectly positioned to be a serious player if Bitcoin does achieve the lofty goals supporters are aiming for: Coinbase will make money hand over fist from personal users if that happens. 0% for merchants is Coinbase investing in the long term success of Bitcoin. The money they would make now from charging merchants is inconsequential compared to the money they will make long term if Bitcoin succeeds.

This is more of a marketing stunt. They might as well pay you to be a merchant.

This appears to only be for merchant accounts. Personal trades will still have a fee.

On the second million.

On personal exchanges between Bitcoin and other currencies.

Also, on the increased value (deflation) of Bitcoin they already hold from the increased adoption caused by the allure of fee free e-commerce.

How will they make money?

The answer is simple: volume.


Interesting development, but $1M seems a bit much.

If you want to make bitcoin really attractive to merchants, this might do it.

No payments to banks in europe :(

Merchant adoption might be key, but user and buyer adoption might be even more important. Merchants will happily adopt if theres demand.

In that direction, it seems like charging customers has become untenable since PayPal (and credit cards, really).

I hope one day Coinbase adds Litecoin support.

Are there any figures on how many people actually care about Litecoin, as opposed to Bitcoin?

One metric to track usage is the number of transactions per day:

- Bitcoin: ~50k transactions/day (http://blockchain.info/charts/n-transactions)

- Litecoin: ~5k transactions/day (http://ltc.block-explorer.com/charts)

I wonder how long until the first merchant to take the money and run? Alice buys something from Bob, Bob sends a tracking number for a rock in a box and chuckles his way to the bank.

Or vice versa, of course, Alice buys something, Bob ships it, Alice never pays.

How would the second scenario occur with BTC? The start of the process is Alice paying.

I'm not clear whether customers will be comfortable paying in advance. There's zero way to recover your money, unlike credit cards or bank transactions.

BTC in and of itself has no answer for the situation of not trusting the merchant. However, merchants typically do business with many customers, don't need anonymity, and have an interest in maintaining good reputations. None of these conditions obtain for the customer in the general case, and this asymmetry explains why all merchants that take BTC are paid before delivery.

Those who need to use a credit card, will.

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