People saying this is anything but an incredibly positive event for the ecosystem are so hilariously delusional with their anti coinbase circlejerk.
This kind of ADOPTION (I.E. REAL WORLD WAYS TO USE CRYPTO)is beyond essential to the greater goals that crypto will eventually accomplish.
This alone could drastically increase crypto payments on a daily basis (even if they’re ultimately translating into USD) and will better stress test blockchains abilities to scale and process transactions. It’s a huge step in the right direction.
The decentralized world was never going to exist overnight (we’re 11 years into this project, btw) and this is huge.
I've been piloting this program and I've got to say it's been a convenient way to pay without draining my real bank account. IMO this is a killer product compared to everything else I've experienced with Bitcoin and cryptocurrency this far, it really bridges the gap.
Heck, I even used it to pay my back taxes to the IRS.
So in this case rather than just pay cash it's paying cash with a little bit extra for coinbase? Is there any genuine value to justify this extra cost?
Everyone charges a fee. This is just a different provider. The proposition is that conversions are seamless so you don't have to worry about manually cashing out assets for payment and you can stay invested until the time of sale.
>IMO this is a killer product compared to everything else I've experienced with Bitcoin and cryptocurrency this far, it really bridges the gap.
So it solves the usability problem of cryptocurrency by... working like a regular bank, more or less? And mostly getting rid of the actual blockchain to use off-chain transactions while having the convenience of the centralized Visa system?
This might be the killer product for cryptocurrency, but in a more literal sense. It shows that the market seems to inexorably converge towards the good old solutions, and the cryptocurrency ecosystem slowly (and rather inefficiently) reinvents the modern banking system.
I wonder when Coinbase will start doing fractional-reserve banking with they off-chain "cryptocurrency" accounts.
This is no more "cryptocurrency technology" than if I set up a script to sell some of my Bitcoins to replenish my bank account when its balance reaches a certain value.
Cryptocurrency is both a monetary system and a payment system. You don't lose all of the benefits of cryptocurrency if the payment layer is scaled up with centralized solutions.
It's a bunch of "hodler" whales who, if the currency is successful enough, will become the next "old guys with nukes".
If most people use bitcoin off-chain then it means that it's the cryptocurrency exchange cartel who gets to decide what is and isn't bitcoin. Who cares if the node in your basement disagrees if all the exchanges have forked away and nobody can trade with you.
The whole "it's just code" shtick is really shortsighted. It's never only just code, it's a complex consensus. Look at all the drama around segwit/bitcoin cash for instance.
It's a partnership with a stored value card provider (Paysafe Financial Services Limited). Coinbase just liquidates your Bitcoin and then settles in fiat.
What paradigm shift? It's capital gains. _Maybe_ there would be an argument that this is a currency conversion but in its current state BTC is totally a speculative financial instrument
The inverse (_not_ paying capital gains on this) would be very weird
The usd/try had a range of 4-7, Bitcoin had 3K-5K in the last year (and if you asked a month ago it would have been 3k-4K). Also by some measures of statistical deviations, BTC was less volatile.
The original post said past couple of years and BTC was very volatile in that period with a range of 1K-18K. Secondly BTC has not been in the range 3K-5K over that last year, but rather 3K-10K. Admittedly January-March this year has been relatively calm on the bitcoin front, but the past couple of weeks have been bumpier again.
Or I should have referred to the Zimbabwe currency...
The Zimbabwe Dollar would be a perfect example. It hasn't been a currency for a decade now and ceased being used as currency many years before that, precisely because it was so unstable. Once official currencies stop being used as currency (first unofficially and then officially) all the time if they don't behave in ways people expect currency to behave.
Bitcoin at this point is purely speculative and this is almost like hooking up a debit card to my Robinhood account and selling stock to pay for it every time I buy something.
Seems to completely work around the reasons why Bitcoin etc. were interesting in the first place as a technology.
"Seems to completely work around the reasons why Bitcoin etc. were interesting in the first place as a technology."
I respectfully disagree. The original goal of Bitcoin was to create a new financial system and instrument which ultimately enables people to pay for things.
What is the reason why Bitcoin? It is digital currency and able to use it to buy daily groceries is the whole point of a currency. It become store of value not only because it can be store of value, but more of you can’t use it for daily spendings and people needs another reason to justify exists of Bitcoin.
Nope « At this time, only residents of the United Kingdom may apply for a Coinbase Card. We’re working on expanding the offer to additional European markets. »
It would likely count as a sale and incur a capital gains tax. You'd spend $5 for that pizza and then another $2.50 on capital gains tax. Probably some more on eating the bid-ask spread.
This is great news! I've literally been living off my Bitpay debit card for the past 2 years, they come in clutch as f, but only have 2 pairs (BTC & BCHABC). But Coinbase has a variety coins, especially XLM & XRP which have ridiculous fast sending speeds (like ~3min), and now finally, you can spend them without the whole withdraw coin-to-fiat process.
Though, i'm curious about the fees/tax side, and I'm wondering if they will be implementing some sort of rewards program in the future
It's not about transaction speeds. It's about the whole point of cryptocurrencies. Try sending fiat money to another country and see if that takes 15 seconds
edit* also, checkout other services like Wirex, they're great
It seems this encourages users to keep all their money sitting in a coinbase wallet... That doesn't seem great when coinbase gets hacked... What happened to the advice of "don't leave your money in an exchange"
If they have been able to develop from a hacked-together exchange like MtGox to a financial institution - with all the necessary certifications and licenses - they should be just as secure (or insecure) as any other bank with an online presence.
they should be just as secure (or insecure)
as any other bank
So are my deposits FDIC insured, even if held in BTC form? And has a government-backed insurer confirmed their insurance would cover Coinbase getting hacked?
Not FDIC, but they do have insurance on their hot wallet funds. The bulk of the funds are in cold wallets, with the keys stored on paper, in a large number of safe deposit boxes in various locations.
The hot wallet insurance covers Coinbase itself getting hacked, but not someone breaking into your account. For account security you have 2FA, and can require confirmations from multiple email accounts for any withdrawals.
I think it's because most vehicles for trading ownership over companies or commodities like gold have a good amount of friction to them, making it impractical to deal with them as if they were money. This might include a minimal value of a sale (e.g. a stock is worth $20 and can't be divided further, although there are systems for owning a fraction of a stock) or trading fees. Bitcoin, on the other hand, is easily divisible into small fractions.
Not saying there might not be some way to make it work, but it probably involves a lot of unnecessary risk and high transaction costs.
Seems like it's just too much headache without any of the purported benefits that bitcoin has over traditional money.
Well stocks can't be sold in tiny tiny fractions. If you have 5 shares of Amazon and 6 shares of Apple...which stock does your debit card provider sell to cover your latte? Also stock markets don't operate 24/7, crypto does.
Presumably the card provider would aggregate everyone's latte purchases together at the end of the day and make a single transaction on behalf of all their users.
The provider could either eat the change in price over the day, or pass it back to the user by first presenting an estimated amount and then a final amount when the transaction is completed when the market next opens.
n.b. Not true; a lot of retail brokerages are happy to deal in fractional shares. A common use case is implementing dividend reinvestment, where you might have the 10 shares you own issue a dividend entitling you to .005 shares; many retail brokerages can trivially support this.
The "How?" is potentially interesting: over the entirety of a broker's book of business, there are a lot of holders of e.g. SPY, so the broker (or their internalizer) just buys (pick a number) 713 shares, assigns fractions correctly, and keeps a tiny bit of the last share on their own account. This comes out in the wash, because retail customers are extremely lucrative to service at scale, and having to be ~$100k long various publicly traded equities to keep the tollbooth running is cheap at the price.
Beyond the point made by siblings comments about selling fractions of stocks I also want to point out that selling small amount of bitcoins or ethereum on-chain is also prohibitively expensive. I'm sure those debit card transactions won't be directly settled on the actual cryptocurrency, they'll just keep a balance internally and make big transactions on the blockchain if they need to balance their accounts. You know, like a bank.
That's still significant for small transactions. Beyond that, will it scale well enough to cost only 10 cents if it becomes the new Visa/Mastercard? The transaction rate of BTC/ETH is still almost negligible when compared to mainstream payment processors.
>Coinbase owns an exchange, so they don't have to commit every transaction to the blockchain, so it's peanuts for them.
My point exactly. It's not a Bitcoin card, it's a Coinbase card, the cryptocurrency aspect is tangential. This is not cryptocurrency going mainstream, it's the mainstream taking over cryptocurrency because it's just so much more convenient to have a Visa card than a Bitcoin or Eth wallet.
At 10 cents it is cheaper than debit card transactions. And credit card processors charge 2-3% on average for transactions... maybe as low as 1.5%.
Visa is more convenient today but it took decades for Visa to get to the scale and scope and convenience it has today. If people start parking more money in crypto and using crypto credit cards it's only a matter of time before merchants start accepting direct payment from coinbase wallets. At that point, Coinbase can bypass Visa and charge a fraction of the fee for facilitating the trade from USD to BTC.
Well, presumably this would be configurable in the mobile app / UI so users can choose how to (order etc) liquidate their holdings in order to fund the card.
Obviously there could be some sane defaults. By default aggregate all card spending against user's margin account, every day/week/month sell the cheapest stock which covers outstanding balance (so if you spent $150, it would first sell 1 share of Apple, it wouldn't start selling Amazon until you run out of Apple shares).
Interactive Brokers offers such a debit card to US clients, albeit not by selling assets automatically, but by using the cash balance or a margin loan backed by the assets. You can then decide which assets to sell (and when to sell them) to cover for the payments made.
This is an extremely available offering from brokerages, including Charles Schwab and Interactive Brokers. The magic word in the industry is "integrated cash management", and the mechanism is usually "You use the debit card as normal, it results in drawdowns against either your cash balance or your marginable equity as appropriate, and (if you get into margin territory) you repay at your leisure by adding new money or liquidating stocks of your choice."
Brokerages love this product, because being a debit issuer is a great business to be in. From an optimizing-your-personal-finances perspective, most HNers should probably get a rewards card from their bank of choice; you can trivially arrange the credit card to pull from a bank account and your brokerage to push to the bank account, in the case where one's spending is materially backed by one's investment portfolio (which feels like not something people should make a habit of in most cases).
I love Interactive Brokers, but I'm trying to figure out why people use IB's debit card, drawing from margin. I know they have the best margin rates in the industry, but it's still something, and the margin interest isn't deductible if it's not used to buy securities.
Is there a particular tax advantage that I'm not considering? I'd love to know as this sort of stuff is like crack to me.
Drawing from margin prevents you from needing to sell and rebuy securities to free up $ as needed. This means no taxable events occur, so you don't have to deal with capital gains.
It's also the cheapest possible credit you can obtain as a consumer. TBH it's so cheap that you can reasonably expect your investment returns to at least match it in the long run, so as long as you aren't drawing so heavily as to get an unhealthy leverage ratio
Isn't paysafecard the point-and-click-and-become-a-card-provider of the pay card industry along with Wirecard? Used by loads of dodgy no credit check providers, card providers going bust every other week, apparently its harder to spin up an AWS EC2 instance than it is to become a card provider with these jokers.
At a functional level - No 3DSecure support, unexplained failures, little insight from the vendor into paysafe infrastructure. I'm very surprised Coinbase launched on this mickey mouse platform. It's like launching a clothing brand with cafepress.com as your product provider
interesting that this comment has been voted up :) - you are not the target market - if you can spend the cryto you HODLing on Monzo as easily then your comment is valid.
The amount of KYC/AML nonsense you have to go through with Coinbase UK is higher than Monzo/Revolut/Transferwise/Starling, so if you qualify for Coinbase UK card you qualify for any number of better solutions. If you refer to the conversion of crypto to fiat, you simply withdraw to your Monzo or whatever and spend, yes it's an extra click but it beats the embarrassment of card rejected as acceptance of these clown cards is very hit and miss (despite the Visa/MC network backing).
The problem with most banks in the UK is they'll usually lock or even cancel your account if you're dealing with Crypto. Monzo is well known for doing it (Google "Monzo closed account bitcoin").
Barclays is one of the only banks slowly accepting Crypto related transactions.
Most people I know dealing with Crypto are using Revolut as they are not a proper bank. However, they recently blocked transactions to Coinbase's account (this is most likely because they are applying for a UK banking license).
But then you are just not the audience; people with crypto can already (in some countries) convert to fiat indeed, but they do not want to; they want to pay 1 coffee and 20 minutes later a sandwich etc and leave the remainder in crypto. They do not want to conciously get up and convert 100 pounds, do their shopping and repeat that the next day.
Any citations? No comment on this issuer but I’ve been using debit plastic from Wirecard for 5+ years with no acceptance issues and Payoneer doesn’t show signs of going bust.
Paysafe is a big player in the gambling industry. Getting a gambling license in the UK is extremely hard as there is a bit of lobbying involved by the big players.
Same goes in general for Cryptocurrency related services. If Coinbase were to directly provide Visa/Mastercard cards, they would never get approved for the appropriate license. Hence why they are partnering with Paysafe.
The greatest thing about it is that it will be like the ThenX card had been, while it worked. Cryptocurrency will be converted in the last moment, when the spending is made.
I have thought about this many times in the past: How are big companies able to steal these ideas so fast?
Actually, “steal” may not be the correct word, but I don’t think this was a coincidence. Knowing how secretive Apple is, I am surprised that Coinbase was able to work on this project (also in secret?) without them noticing. Or maybe they noticed but didn’t care? Which is even more bizarre considering how sensitive Apple lawyers are with their unreleased projects. There must be some underground market of corporate secrets that I am not aware of because I cannot explain how two companies can work in the same project more or less at the same time without it being the product of a stolen idea.
I had the same train of thought just a few weeks ago when Google announced project Stadia [3] and then Apple announced Arcade [4]. I know what you are going to say, “These two projects are very different”, well yes, they are, but they seem to have the same ingredients: big-4 creates platform for games. Maybe these are really simple coincidences, and I’m just paranoid.
Or...it's just no conspiracy at all because neither Apple not Coinbase reinvented the wheel but put just another card into your wallet? It's not like this is something ground breaking to do if you handle cash in the US.
Not stealing - there have been about a dozen "crypto" debit cards until today. But the speed of implementing it to match the news from Apple - could be, why not?
Not really, it's not easy but it's pretty simple. It's money + politics to get the connections to have a bank underwrite the cards. Apple went a little further with the fancy app and physical card but all the foundations are already available. You can see it yourself if you use any other major bank's mobile apps and cards.
Can you explain what you mean by Apple's ecosystem integration? What is it that they do differently? As far as I can tell, the app has budgeting features that are similar to what mint.com offered a decade ago.
Payment categorisation, maps, etc are long available as services from companies like Yodlee, for example.
For the budgeting part, as well.
What I mean is that it will just feel natural to pay with the phone using the credit card, which you don't really need to get from anyone else, but Apple themselves.
Apple Pay has been backed by whatever credit card you want for years now, this isn't any different. The bank still has to approve you, it's not automatic. I guess I just don't see what's so special about this other than the fancy app.
Because it is not about going to the bank and getting your credit card, and then linking it to the Wallet. I think it will feel different from the experience perspective. For them that is the only way to get traction.
In fact, launching a debit card now is quite simple and fast if you're using an issuer. Especially the one like Paysafe. The only question is why do that with Paysafe, who have quite a reputation as an issuer, other than speed of the launch.
With Apple Arcade - I think it is purely a coincidence, but Apple definitely wants deeper into the gaming market now - even being there for quite some time and quite some share with iPhone and iPad.
It's not about them being coincidences or secret projects - these are huge markets in general that the big players have not picked up on. For Apple, after their Apple TV, a logical extension would have been to dip into the gaming market as well.
In a way this is great but in another way it's the worst. It's nice to have a practical way to use Bitcoin (or other cryptocurrencies) to buy things in the vast majority of places that don't take Bitcoin.
On the other hand, I have always considered one of the main concepts with cryptocurrency to be the potential ability to avoid third parties taking a cut of all of your digital transactions. This turns it into just another way for big companies like Visa or Coinbase to get rich just on the basis that people need to exchange money.
The basic idea for me with cryptocurrency is that since it's our money we shouldn't have to give control of it to third parties just for basic usage. We have math, the internet, and plenty of computers. We should not need Visa or Coinbase.
KYC has zero to do with information security, and there's a legitimate argument that much of the regulation is anti-competitive regulatory capture with the primary goal of preventing new entrants in the market, with "security" being a secondary concern.
KYC isn't some conspiracy to keep Bitcoin firms out - it's a vital protection against money laundering, terrorist financing and checking for identity theft.
There are very real consequences in the real world when these checks get skipped or overlooked.
Nobody said anything about it being a conspiracy. It's not a conspiracy that entrenched actors advocate for rules they can trivially follow that just happen to kneecap upstarts. It's an expected and recognized behavior of large entities.
That goes double when "terrorism" is brought up, which is a metasituational justification for nearly any conceivable rule.
They aren’t trivial to follow - Standard Chartered were fined $1.1bn for AML non compliance, Swedbank and Danske have lost their CEOs. KYC is vital for the integrity of the economic system precisely because ML is as prevalent as it is.
That's not true. KYC is for preventing money laundering and terrorist financing. You do NOT want the RCMP/FBI asking why you permitted terrorists to use your platform.
It's as much fraud control as legislative compliance. From the perspective of consumers, considering a payment network as 'secure' requires fraud control - by ability to reverse fraudulent transactions and/or making it hard or expensive for fraudulent recipients to sustain operations.
In terms of fraud protection, the bitcoin network is only responsible for ensuring a double spend will not happen. I don't think it should be the 1st layer protocol's responsibility to also handle chargebacks and fraud claims... these issues need to be settled by intermediaries who are willing and able to deal with these customer issues.
Well, you can transfer cryptocurrency direct from buyer to seller with no middlemen but it's kind of clunky and requires both buyer and seller to be familiar with the same cryptocurrency.
And then I was thinking of making a simple transfer app for direct crypto but then you think people are going to use it for illegal stuff and you'll get in trouble for facilitating drug dealing etc.
Or you have the Coinbase/Visa route where it's all KYCed and regulated but not much advantage over regular Visa. Dunno.
I don't see what is in this for the consumer either. If you are not already a holder, why would anyone want the hassle of becoming one, just to pay high fees for each and every transaction (e.g. the 2.49% "crypto liquidation fee" for this card) when you can get a cashback card (e.g. mine gives me up to 10% cashback on some purchases), and why would you not want your assets working for you until as late as possible (not until point of purchase as in this case but up to 5-6 weeks later when a conventional monthly credit card bill become due)? And if you are a crypto holder, why would you want to transfer custody of your crypto to Coinbase and make your tax return a nightmare (i.e. with a potentially large number of small disposals)?
I’ve had this card for a few years, I rarely encounter someone who doesn’t accept it. (United States) I carry this card, the citi cash back master card and the amazon prime visa. Figure at least one works and I prioritize best reward.
Also the categories they offer 5% on (amazon, gas, restaurants, grocery) are likely to take discover.
Thanks for the feedback, good to know. Interesting you mentioned the Amazon card. I would actually be curious to hear your experience with that Amazon card. In looking at the reviews on their site, nearly the entire last two years reviews are pretty abysmal review(one star.) Cheers.
I can't say anything bad or good about it. I get 1% back (or points to spend at amazon) for any purchases, 2% points back for gas, and 3% points when I use it at amazon.
There's been more than several times where it looked like it never applied the points to my account though. I always paid it off in full every month, and sometimes it works sometimes not. When I lived on the road and used it for hotels, while getting reimbursed from them, I was able to rack up $1500 worth of points.
Other than that, it's been fine. Looking around for something a bit better though.
Costco card is better for gas, restaurants, and travel. Double cash card is 2% on everything. Both are Citi, so its one app and account, just have to remember if youre buying gas, restaurant, travel or costco.
Its a NatWest Reward card. Cashback is normally 0.5-1%, but they have additional cashback from selected vendors at different times, e.g. they had 10% on amazon.co.uk purchases and 3% for household bills at one point, and current offers include 10% off at a restaurant I'm already scheduled to visit. Monthly fee is £2 so you need to work out if the additional cashback is likely to net you more than £24pa. Disclaimer: not affiliated with the company, and not saying its the only option or necessarily even the best option - just answering a question.
why would you not want your assets working for you until as late as possible (not until point of purchase as in this case but up to 5-6 weeks later when a conventional monthly credit card bill become due)?
So paint a picture for me. How do I otherwise conveniently pay off my credit card bill with crypto? (Honestly, I would like to know, and such information would be a benefit to the general public.)
My two major gripes are that it's first hitting the UK market and it has liquidation fees associated.
I agree with the premise that we shouldn't need to convert to fiat but unfortunately we have to follow the pace of adoption. You could create a POS device tied to a service that accepts crypto-only via chip and pin or magnetic for the business. I'm doubtful many businesses are hearing from their customers that they want crypto only payments, however.
I lead the development of a crypto debit card in the US. If anyone has questions, shoot me a message.
> The basic idea for me with cryptocurrency is that since it's our money we shouldn't have to give control of it to third parties just for basic usage. We have math, the internet, and plenty of computers. We should not need Visa or Coinbase.
How does this give them control? As long as it still use/depends on the Bitcoin network, you still have control.
If anything, this show how cryptocurrency are amazing. Both the little guys and the big guys can use it, even you.
Cryptocurrencies has the potential to solve 2 things I believe is extremely essential this day in age.
- Everyone can use them
- Every amount can be used
I simply can't do a Visa transaction of 1 cent... simply can't... A child can't use Visa either. Both situations will happens more and more with the internet.
Isn't there a Bitcoin fee to open/close a channel and then the fees involved sending via lightning nodes?
Also the routing problem is starting to become an issue with the network at just ~5000 nodes - How will it scale to millions?
Of course these are just the technical issues, there are others concerning centralization which always seems to end up in a monopolistic end game that end up with consumers having no choice but to pay.
> I don't see how I have more control if coinbase hold my crypto and sell it for me when I buy something compared to just having money at a bank.
Can you transfer it using the Bitcoin network? That's when you get your control back. Personally I consider that you should also always try to keep the least amount of Bitcoin possible, and to always keep it to yourself, not on an exchange.
To me also cryptocurrencies aren't a way to keep something either, it's a way to transfer value.
Why not just having money at the bank? Funnily enough I would say that you should actually keep it there and if you actually need to make a payment using Bitcoin, simply find a quick way to transfer that money to Bitcoin.
Cryptocurrencies are amazing to transfer value virtually. They aren't there to replace cash, they are there to allow you to transfer value outside of real life. It's there to allow you to do what you do in real life with cash, but on the internet. Sure Venmo allow you to do it, but I can't have a Venmo account, but everyone can have a Bitcoin wallet and exchange from it.
They allow it.. for sure. The same way that I wouldn't suggest you to hold all your cash over an investment account. They need to allow some holding, or else what else would you transfer?
Nothing can be ideal either, but the closer you get, the better it is.
We need them because of legal limitations, not technical ones
IMHO, at the end of the day the biggest challenge is not technical, but rather it's to change the laws which were made to support the current system, to protect established actors, and to protect their interests
Seems like this would introduce an unwelcome element of pricing uncertainty into every transaction. Instead of knowing at the point of purchase that my latte will cost me $3.95, it's going to cost me some unknown amount of bitcoin depending on the rate Coinbase happens to use at the moment it processes the transaction.
I accept this kind of uncertainty when I use my existing card abroad (although in some cases, the POS terminal offers to do the currency conversion up front); but I don't much care for the idea of introducing such price volatility into all my everyday purchases.
> I accept this kind of uncertainty when I use my existing card abroad (although in some cases, the POS terminal offers to do the currency conversion up front)
Sounds like you're a price-conscious kind of person. Be aware that POS terminal conversions are usually the worst rates you can get, with the POS terminal taking a large % cut on each transaction in exchange for your peace of mind knowing exactly how much it's going to cost you.
If it helps you to see that conversion amount, that can be useful, but generally speaking, you don't want to accept that price and instead be charged the local currency. The amount you get charged will always be significantly less (subject to you not having absurd fx fees on your card, of course)
The fact that this is being introduced now, is kind of telling if this crypto/bitcoin story this far.
High valuations has been a double edged sword. On one hand, it brought attention, interest and such. OTOH, it sucked all the energy into trading/speculation and all but forced the like of coinbase to specialise in it, neglecting everything else.
I have to say, crypto has been (and still is) an interesting look into what money is and how it might evolve. It seems that possibly inevitably, getting paid for work and paying for goods and services is "naturally" an extreme iceberg... The tiny piece of the whole that's visible. Below the surface is most of the "ice," the enormous volume of currency trading and other high finance uses.
Really cool! The barrier to me to adopt it is the high floating prices of bitcoins. I already use it to do transactions overseas, to receive payments, etc., but I never let bitcoins on my wallet for more than some hours.
A hedge strategy could help me on this, but this is more work. It's easy to transform it into a more stable currency.
How is this different than the Coinbase Shift card? I had a shift card and the fees on purchases made it prohibitively expensive so I stopped using it after a few purchases.
Shift just shut down, apparently. So that’s at least one difference. From their website:
> We hope you enjoyed using the Shift Card and truly thank you for your loyalty. We, unfortunately, will be retiring the program in April of this year. All Shift Cards will be officially deactivated on April 11, 2019.
So I can take my currency, trade it for crypto, then spend it at stores?
Do you know what would be even more crazy and innovative? If I could skip the middle part and just exchange my dollars directly for goods and services!
You can, but your sarcasm seems to assume people are just simply converting dollars into bitcoin just to use this debit card. This feature may not be for you, but for those who trade or accept it as a payment for their goods/services. It essentially eliminates the process of selling the bitcoin and/or waiting a few days to transfer the funds to your bank.
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[ 2.6 ms ] story [ 264 ms ] threadThis kind of ADOPTION (I.E. REAL WORLD WAYS TO USE CRYPTO)is beyond essential to the greater goals that crypto will eventually accomplish.
This alone could drastically increase crypto payments on a daily basis (even if they’re ultimately translating into USD) and will better stress test blockchains abilities to scale and process transactions. It’s a huge step in the right direction.
The decentralized world was never going to exist overnight (we’re 11 years into this project, btw) and this is huge.
Heck, I even used it to pay my back taxes to the IRS.
So it solves the usability problem of cryptocurrency by... working like a regular bank, more or less? And mostly getting rid of the actual blockchain to use off-chain transactions while having the convenience of the centralized Visa system?
This might be the killer product for cryptocurrency, but in a more literal sense. It shows that the market seems to inexorably converge towards the good old solutions, and the cryptocurrency ecosystem slowly (and rather inefficiently) reinvents the modern banking system.
I wonder when Coinbase will start doing fractional-reserve banking with they off-chain "cryptocurrency" accounts.
This is no more "cryptocurrency technology" than if I set up a script to sell some of my Bitcoins to replenish my bank account when its balance reaches a certain value.
What are the benefits if you relay solely on existing payment networks for transactions?
If most people use bitcoin off-chain then it means that it's the cryptocurrency exchange cartel who gets to decide what is and isn't bitcoin. Who cares if the node in your basement disagrees if all the exchanges have forked away and nobody can trade with you.
The whole "it's just code" shtick is really shortsighted. It's never only just code, it's a complex consensus. Look at all the drama around segwit/bitcoin cash for instance.
Also does Visa or Coinbase then make a server side log of all the transactions?
The inverse (_not_ paying capital gains on this) would be very weird
How are you defining volatility? Because by any reasonable metric that is absolutely not true.
Or I should have referred to the Zimbabwe currency...
The Zimbabwe Dollar would be a perfect example. It hasn't been a currency for a decade now and ceased being used as currency many years before that, precisely because it was so unstable. Once official currencies stop being used as currency (first unofficially and then officially) all the time if they don't behave in ways people expect currency to behave.
Seems to completely work around the reasons why Bitcoin etc. were interesting in the first place as a technology.
I respectfully disagree. The original goal of Bitcoin was to create a new financial system and instrument which ultimately enables people to pay for things.
https://www.buybitcoinworldwide.com/anonymity/
[1] https://transferwise.com/
[2] https://www.theverge.com/2019/3/3/18248826/revolut-workplace... and https://twitter.com/phillipcaudell/status/110108122935141580...
For example you've been sitting on a pile of bitcoin with massive gains and spend it straight out of the account.
The US is kind of complicated with different rates for short term and long term gains.
I declared UK crypto gains recently. It can get complicated if you try to follow all the instructions properly.
Though, i'm curious about the fees/tax side, and I'm wondering if they will be implementing some sort of rewards program in the future
And here I am with my "old tech" SEPA bank account and Instant Payments that take 15 seconds max...
edit* also, checkout other services like Wirex, they're great
The hot wallet insurance covers Coinbase itself getting hacked, but not someone breaking into your account. For account security you have 2FA, and can require confirmations from multiple email accounts for any withdrawals.
Fiat is FDIC insured, crypto has different insurance.
https://support.coinbase.com/customer/portal/articles/166237...
Can't that model be expanded to include any tradable commodity? Why can't I get a 'Gold debit card' or a 'Nasdaq Debit card'?
Would there be a market for this?
Not saying there might not be some way to make it work, but it probably involves a lot of unnecessary risk and high transaction costs.
Seems like it's just too much headache without any of the purported benefits that bitcoin has over traditional money.
Gold is hard to sell in tiny fractions as well.
Presumably this would work the same way Coinbase will choose whether to sell some of your bitcoin or some of your ethereum (i.e. you choose)
I’d assume they don’t see a market, more than they don’t see a practical way to make it work.
The provider could either eat the change in price over the day, or pass it back to the user by first presenting an estimated amount and then a final amount when the transaction is completed when the market next opens.
n.b. Not true; a lot of retail brokerages are happy to deal in fractional shares. A common use case is implementing dividend reinvestment, where you might have the 10 shares you own issue a dividend entitling you to .005 shares; many retail brokerages can trivially support this.
The "How?" is potentially interesting: over the entirety of a broker's book of business, there are a lot of holders of e.g. SPY, so the broker (or their internalizer) just buys (pick a number) 713 shares, assigns fractions correctly, and keeps a tiny bit of the last share on their own account. This comes out in the wash, because retail customers are extremely lucrative to service at scale, and having to be ~$100k long various publicly traded equities to keep the tollbooth running is cheap at the price.
But also, Coinbase owns an exchange, so they don't have to commit every transaction to the blockchain, so it's peanuts for them.
That's still significant for small transactions. Beyond that, will it scale well enough to cost only 10 cents if it becomes the new Visa/Mastercard? The transaction rate of BTC/ETH is still almost negligible when compared to mainstream payment processors.
>Coinbase owns an exchange, so they don't have to commit every transaction to the blockchain, so it's peanuts for them.
My point exactly. It's not a Bitcoin card, it's a Coinbase card, the cryptocurrency aspect is tangential. This is not cryptocurrency going mainstream, it's the mainstream taking over cryptocurrency because it's just so much more convenient to have a Visa card than a Bitcoin or Eth wallet.
Visa is more convenient today but it took decades for Visa to get to the scale and scope and convenience it has today. If people start parking more money in crypto and using crypto credit cards it's only a matter of time before merchants start accepting direct payment from coinbase wallets. At that point, Coinbase can bypass Visa and charge a fraction of the fee for facilitating the trade from USD to BTC.
Obviously there could be some sane defaults. By default aggregate all card spending against user's margin account, every day/week/month sell the cheapest stock which covers outstanding balance (so if you spent $150, it would first sell 1 share of Apple, it wouldn't start selling Amazon until you run out of Apple shares).
20 years ago I could write a check against my Vanguard mutual funds and I'm pretty sure they weren't the only brokerage that offered it.
Brokerages love this product, because being a debit issuer is a great business to be in. From an optimizing-your-personal-finances perspective, most HNers should probably get a rewards card from their bank of choice; you can trivially arrange the credit card to pull from a bank account and your brokerage to push to the bank account, in the case where one's spending is materially backed by one's investment portfolio (which feels like not something people should make a habit of in most cases).
Is there a particular tax advantage that I'm not considering? I'd love to know as this sort of stuff is like crack to me.
It's also the cheapest possible credit you can obtain as a consumer. TBH it's so cheap that you can reasonably expect your investment returns to at least match it in the long run, so as long as you aren't drawing so heavily as to get an unhealthy leverage ratio
Of course when both parties are clients of Coinbase or Goldmoney respectively then the ownership of the bitcoins/gold can be directly transferred.
At a functional level - No 3DSecure support, unexplained failures, little insight from the vendor into paysafe infrastructure. I'm very surprised Coinbase launched on this mickey mouse platform. It's like launching a clothing brand with cafepress.com as your product provider
Ill stick with Monzo thanks
Barclays is one of the only banks slowly accepting Crypto related transactions.
Most people I know dealing with Crypto are using Revolut as they are not a proper bank. However, they recently blocked transactions to Coinbase's account (this is most likely because they are applying for a UK banking license).
That should change within the next few weeks as PSD2 requires that.
> card providers going bust every other week
Any citations? No comment on this issuer but I’ve been using debit plastic from Wirecard for 5+ years with no acceptance issues and Payoneer doesn’t show signs of going bust.
Same goes in general for Cryptocurrency related services. If Coinbase were to directly provide Visa/Mastercard cards, they would never get approved for the appropriate license. Hence why they are partnering with Paysafe.
I have thought about this many times in the past: How are big companies able to steal these ideas so fast?
Actually, “steal” may not be the correct word, but I don’t think this was a coincidence. Knowing how secretive Apple is, I am surprised that Coinbase was able to work on this project (also in secret?) without them noticing. Or maybe they noticed but didn’t care? Which is even more bizarre considering how sensitive Apple lawyers are with their unreleased projects. There must be some underground market of corporate secrets that I am not aware of because I cannot explain how two companies can work in the same project more or less at the same time without it being the product of a stolen idea.
I had the same train of thought just a few weeks ago when Google announced project Stadia [3] and then Apple announced Arcade [4]. I know what you are going to say, “These two projects are very different”, well yes, they are, but they seem to have the same ingredients: big-4 creates platform for games. Maybe these are really simple coincidences, and I’m just paranoid.
[1] https://www.apple.com/apple-card/
[2] https://www.coinbase.com/card
[3] https://stadia.dev/
[4] https://www.apple.com/apple-arcade/
I mean, accusing Coinbase of stealing the idea is ridiculous.
With Apple Arcade - I think it is purely a coincidence, but Apple definitely wants deeper into the gaming market now - even being there for quite some time and quite some share with iPhone and iPad.
On the other hand, I have always considered one of the main concepts with cryptocurrency to be the potential ability to avoid third parties taking a cut of all of your digital transactions. This turns it into just another way for big companies like Visa or Coinbase to get rich just on the basis that people need to exchange money.
The basic idea for me with cryptocurrency is that since it's our money we shouldn't have to give control of it to third parties just for basic usage. We have math, the internet, and plenty of computers. We should not need Visa or Coinbase.
Other than mining fees?
There are very real consequences in the real world when these checks get skipped or overlooked.
That goes double when "terrorism" is brought up, which is a metasituational justification for nearly any conceivable rule.
And then I was thinking of making a simple transfer app for direct crypto but then you think people are going to use it for illegal stuff and you'll get in trouble for facilitating drug dealing etc.
Or you have the Coinbase/Visa route where it's all KYCed and regulated but not much advantage over regular Visa. Dunno.
Also the categories they offer 5% on (amazon, gas, restaurants, grocery) are likely to take discover.
I can't say anything bad or good about it. I get 1% back (or points to spend at amazon) for any purchases, 2% points back for gas, and 3% points when I use it at amazon.
There's been more than several times where it looked like it never applied the points to my account though. I always paid it off in full every month, and sometimes it works sometimes not. When I lived on the road and used it for hotels, while getting reimbursed from them, I was able to rack up $1500 worth of points.
Other than that, it's been fine. Looking around for something a bit better though.
So paint a picture for me. How do I otherwise conveniently pay off my credit card bill with crypto? (Honestly, I would like to know, and such information would be a benefit to the general public.)
run away, run away.
I agree with the premise that we shouldn't need to convert to fiat but unfortunately we have to follow the pace of adoption. You could create a POS device tied to a service that accepts crypto-only via chip and pin or magnetic for the business. I'm doubtful many businesses are hearing from their customers that they want crypto only payments, however.
I lead the development of a crypto debit card in the US. If anyone has questions, shoot me a message.
How does this give them control? As long as it still use/depends on the Bitcoin network, you still have control.
If anything, this show how cryptocurrency are amazing. Both the little guys and the big guys can use it, even you.
Cryptocurrencies has the potential to solve 2 things I believe is extremely essential this day in age. - Everyone can use them - Every amount can be used
I simply can't do a Visa transaction of 1 cent... simply can't... A child can't use Visa either. Both situations will happens more and more with the internet.
If you don't believe me, our team hacked together https://ln.pizza as a demo of the tech.
Also the routing problem is starting to become an issue with the network at just ~5000 nodes - How will it scale to millions?
Of course these are just the technical issues, there are others concerning centralization which always seems to end up in a monopolistic end game that end up with consumers having no choice but to pay.
I don't see how I have more control if coinbase hold my crypto and sell it for me when I buy something compared to just having money at a bank.
Can you transfer it using the Bitcoin network? That's when you get your control back. Personally I consider that you should also always try to keep the least amount of Bitcoin possible, and to always keep it to yourself, not on an exchange.
To me also cryptocurrencies aren't a way to keep something either, it's a way to transfer value.
Why not just having money at the bank? Funnily enough I would say that you should actually keep it there and if you actually need to make a payment using Bitcoin, simply find a quick way to transfer that money to Bitcoin.
Cryptocurrencies are amazing to transfer value virtually. They aren't there to replace cash, they are there to allow you to transfer value outside of real life. It's there to allow you to do what you do in real life with cash, but on the internet. Sure Venmo allow you to do it, but I can't have a Venmo account, but everyone can have a Bitcoin wallet and exchange from it.
1. Storing value as Bitcoin
2. Storing it on an exchange
3. Doing the actual transaction using traditional methods
Nothing can be ideal either, but the closer you get, the better it is.
We need them because of legal limitations, not technical ones
IMHO, at the end of the day the biggest challenge is not technical, but rather it's to change the laws which were made to support the current system, to protect established actors, and to protect their interests
I accept this kind of uncertainty when I use my existing card abroad (although in some cases, the POS terminal offers to do the currency conversion up front); but I don't much care for the idea of introducing such price volatility into all my everyday purchases.
Sounds like you're a price-conscious kind of person. Be aware that POS terminal conversions are usually the worst rates you can get, with the POS terminal taking a large % cut on each transaction in exchange for your peace of mind knowing exactly how much it's going to cost you.
If it helps you to see that conversion amount, that can be useful, but generally speaking, you don't want to accept that price and instead be charged the local currency. The amount you get charged will always be significantly less (subject to you not having absurd fx fees on your card, of course)
High valuations has been a double edged sword. On one hand, it brought attention, interest and such. OTOH, it sucked all the energy into trading/speculation and all but forced the like of coinbase to specialise in it, neglecting everything else.
I have to say, crypto has been (and still is) an interesting look into what money is and how it might evolve. It seems that possibly inevitably, getting paid for work and paying for goods and services is "naturally" an extreme iceberg... The tiny piece of the whole that's visible. Below the surface is most of the "ice," the enormous volume of currency trading and other high finance uses.
https://www.theverge.com/2019/3/3/18248826/revolut-workplace...
https://blog.revolut.com/weve-made-mistakes-but-were-learnin...
A hedge strategy could help me on this, but this is more work. It's easy to transform it into a more stable currency.
For example: Square.
> We hope you enjoyed using the Shift Card and truly thank you for your loyalty. We, unfortunately, will be retiring the program in April of this year. All Shift Cards will be officially deactivated on April 11, 2019.
> Crypto Liquidation Fees: 2.49%
https://support.coinbase.com/customer/portal/articles/296991...
Do you know what would be even more crazy and innovative? If I could skip the middle part and just exchange my dollars directly for goods and services!
You're paying 2.49% on every transaction, and the fee rises for certain kinds and volumes of transactions.
Not innovative.