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Square Market Accepts Bitcoin

corner.squareup.com

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Re: Square Market Accepts Bitcoin

#31

Post by jusben1369 »

natrius wrote: post #18
jusben1369 wrote: post #15

When Bitcoin's are converted to a fiat currency that's now a taxable event correct? That's when the gain or loss is "realized" So if you pay in Bitcoin and the platform/processor immediately converts it into $US to pay the merchant does that create a taxable event for the seller? I suspect people would like to pay in Bitcoin to a merchant who accepts and keeps it in Bitcoin so that a gain is not realized and no taxab…

I believe the taxable event is exchanging Bitcoin for something that isn't Bitcoin. Even if the merchant holds on to the Bitcoin, a gain has been realized.

Got it. So that makes sense. If I pay someone in 100 shares of Google vs $US for a service I no longer own the shares but have transferred them to someone else and would be on the hook for the gain or the loss.

Re: Square Market Accepts Bitcoin

#32

Post by sktrdie »

theswan wrote: post #3

How is Square/Stripe getting around the issue that most exchanges wait for 6 confirmations before a transaction is accepted? Are they ignoring the risk of a double spend and just going ahead once a transaction has propagated to the network for mining?

Consider that even with zero confirmations, with enough clients validating and relying the transaction, it's pretty hard for an attacker to propagate a double-spend for that transaction. This is where the big mining pools are actually a good thing.

In a zero confirmation scenario you could send the transaction to all the big mining pools and wait till they see and validate it which could take just a few seconds. This way it becomes incredibly hard, even with zero confirmations, for an attacker to get her double-spend mined because the big pools saw your tnx first.

For large sums of money of course it's safer to wait for many confirmations, but for $30-40, the risk is relative.

Re: Square Market Accepts Bitcoin

#33

Post by hendzen »

wcoenen wrote: post #30
buss wrote: post #8

Earlier quoted context omitted.

> Are they ignoring the risk of a double spend and just going ahead once a transaction has propagated to the network for mining? After a majority of the nodes have seen a transaction it becomes relatively safe to accept it as valid before 6 confirmations. You wouldn't want to do that for high value transactions, but I think it's fine up to a couple BTC (read: $1000 or less). The Mycelium wallet implements transaction…

You can't determine what the majority of the nodes thinks in this way because of Sybil attacks. Otherwise we wouldn't need proof of work as a consensus mechanism. Mycelium's "transaction confidence" feature is well intentioned but it is a disaster waiting to happen.

Agreed, this is a very fragile heuristic. The blockchain exists for a reason folks.

Re: Square Market Accepts Bitcoin

#34

Post by jvm »

theswan wrote: post #3

How is Square/Stripe getting around the issue that most exchanges wait for 6 confirmations before a transaction is accepted? Are they ignoring the risk of a double spend and just going ahead once a transaction has propagated to the network for mining?

> How is Square/Stripe getting around the issue that most exchanges wait for 6 confirmations before a transaction is accepted?

How do you know they're not getting 6 confirmations? They could just give you a confirmation screen, wait for 6 confirmations, then cancel the order in the rare event that it fails.

Re: Square Market Accepts Bitcoin

#35

Post by 7Figures2Commas »

jusben1369 wrote: post #31
natrius wrote: post #18

Earlier quoted context omitted.

I believe the taxable event is exchanging Bitcoin for something that isn't Bitcoin. Even if the merchant holds on to the Bitcoin, a gain has been realized.

Got it. So that makes sense. If I pay someone in 100 shares of Google vs $US for a service I no longer own the shares but have transferred them to someone else and would be on the hook for the gain or the loss.

This is perhaps the most useful way of looking at Bitcoin today. Now that the tax treatment of Bitcoin has been established, using Bitcoin as currency makes about as much sense as using stock as currency. In other words, it doesn't.

Re: Square Market Accepts Bitcoin

#36

Post by bradleysmith »

gojomo wrote: post #19
theswan wrote: post #3

How is Square/Stripe getting around the issue that most exchanges wait for 6 confirmations before a transaction is accepted? Are they ignoring the risk of a double spend and just going ahead once a transaction has propagated to the network for mining?

Probably. Unless you're working in concert with major mining power, it's still hard to engineer a successful double-spend. And by pushing their preferred observed transaction to major pools, Square could help ensure a double-spend can't succeed, or get a near-instant indication that a competing transaction exists. (I don't know if they're doing this.) It also looks like most 'Square Market' purchases take more than a…

>And by pushing their preferred observed transaction to major pools, Square could help ensure a double-spend can't succeed, or get a near-instant indication that a competing transaction exists.

What would this even look like? is anyone doing 'specialized mining' like this, where particular hashing nodes are being used for preferential transactions?

Re: Square Market Accepts Bitcoin

#37

Post by natrius »

7Figures2Commas wrote: post #35
jusben1369 wrote: post #31

Earlier quoted context omitted.

Got it. So that makes sense. If I pay someone in 100 shares of Google vs $US for a service I no longer own the shares but have transferred them to someone else and would be on the hook for the gain or the loss.

This is perhaps the most useful way of looking at Bitcoin today. Now that the tax treatment of Bitcoin has been established, using Bitcoin as currency makes about as much sense as using stock as currency. In other words, it doesn't.

Can I transfer stock to you with three taps on my phone? Bitcoin makes far more sense than stock as currency, especially if higher sustained demand reduces fluctuations in value, which isn't typical for stocks.

Re: Square Market Accepts Bitcoin

#39

Post by wmf »

theswan wrote: post #28
gojomo wrote: post #19

Earlier quoted context omitted.

Probably. Unless you're working in concert with major mining power, it's still hard to engineer a successful double-spend. And by pushing their preferred observed transaction to major pools, Square could help ensure a double-spend can't succeed, or get a near-instant indication that a competing transaction exists. (I don't know if they're doing this.) It also looks like most 'Square Market' purchases take more than a…

Makes me wonder - would we ever get to a point where it's in Square/Stripe/Coinbase/et. al's interests to contribute mining power to help their own transactions along? Or is that pretty much taken care of by transaction fees?

There could be a problem with fees from a merchant's perspective because they are chosen by the sender and it's possible that someone could (accidentally or intentionally) pay with a transaction that never confirms. Merchant providers like BitPay/Coinbase/Stripe/Square might benefit from a way to pay fees on behalf of a transaction to ensure it gets confirmed.

Re: Square Market Accepts Bitcoin

#40

Post by blhack »

goeric wrote: post #11

Curious if they are going to take a lower transaction fee on Bitcoin payments as opposed to credit card purchases. They really should.

Why? They are incurring a potentially-substantial risk in facilitating the transaction for you, as well as providing the infrastructure for you.

That's why CC fees exist, and that's why people providing bitcoin-related services should be able to charge fees too.

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