Bitcoin Visa debit cards are cancelled • Hacker News Board

Re: Bitcoin Visa debit cards are cancelled

#101

Post by ActsJuvenile » Fri, Jan 05, 2018, 4:32 PM UTC

jaxytee wrote: post #94

Kazamai wrote: post #87

Earlier quoted context omitted.

Tether

Exactly. The SEC has said they consider crytpos securities. That would mean the fraudulent price manipulation in the crytpo space (Bitfinex treating tether as USD and pushing up the bid) is securities fraud. This is probably why Wells Fargo stopped clearing Dollar transactions for Bitfinex.

Wire transfer fraud.

I am an insider in the Bitcoin industry, and within 1 day of opening a new bank account we started seeing fraudulent wires flooding in. When we dug deeper, it was shocking to see how many Americans' bank credentials have been hacked. It takes almost no effort for a EEU/RUS hacker to send a wire from a hacked bank account.

Once the fraudulent wire is sent, rest of the wire transfer system is tediously manual. So wire network participants simply choose to block bank accounts that receive repeated bad wires. This is why Wells Fargo cut out Bitfinex and Visa has decided to stop working with Bitcoin companies.

ACH fraud is even more rampant because you can pull money from someone's account without their consent (as long as they don't notice/contest within certain number of days). Coinbase profit margin is 0.5% per trade, so they need to keep their ACH fraud rate below that number to not lose money. ACH fraud rate is well over 1% industry-wide. This is why I strongly believe that Coinbase has to be losing massive amounts to ACH chargebacks.

Re: Bitcoin Visa debit cards are cancelled

#102

Post by beager » Fri, Jan 05, 2018, 4:32 PM UTC

logfromblammo wrote: post #79

thisisit wrote: post #67

Earlier quoted context omitted.

I am sure when the card was introduced these same people would have said - See, bitcoin is so great it is now accepted by Visa and Mastercard. Now we get this. Sometimes it seems the thought process has evolved to - Heads I win, Tails you lose.

Huh. I didn't know Bitcoins could be flipped.

They can be flipped, but it takes three hours to know if it was heads or tails.

Re: Bitcoin Visa debit cards are cancelled

#103

Post by snowpanda » Fri, Jan 05, 2018, 4:34 PM UTC

XnoiVeX wrote: post #54

Just noticed WaveCrest is based out of Gibraltar. It seems quite easy to start a company based in Gibraltar. What are the advantages or disadvantages? Just curious.

+ ~ 10% corp. tax rate (no VAT, gains tax etc.)

+ the legal system is based on English law

+ English is the first language

+ time zone is central to Europe

+ lots of things are allowed such as gambling (hence why online gambling sites are located here often),

+ Part of EU yet self governing. (well technically an UK Overseas Territory but they are far from listening to anything the UK says).

+ No exchange control...

etc.

Re: Bitcoin Visa debit cards are cancelled

#104

Post by DennisP » Fri, Jan 05, 2018, 4:40 PM UTC

jaxytee wrote: post #94

Kazamai wrote: post #87

Earlier quoted context omitted.

Tether

Exactly. The SEC has said they consider crytpos securities. That would mean the fraudulent price manipulation in the crytpo space (Bitfinex treating tether as USD and pushing up the bid) is securities fraud. This is probably why Wells Fargo stopped clearing Dollar transactions for Bitfinex.

The SEC has said they consider some cryptos securities. They've been pretty reasonable about it so far.

Re: Bitcoin Visa debit cards are cancelled

#105

Post by xorcist » Fri, Jan 05, 2018, 4:40 PM UTC

boysabr3 wrote: post #84

I wonder why this happened. Visa is primarily a technology company - not a financial institution. It's incentivesed to keep fraud on visa cards low (so that merchants continue to accept it) and keep its ecosystem of issuers + acquirers happy. If I'm not missing anything, I believe this must have happened because of unusually high levels of fraud on Bitcoin visa cards. Certain acquirers might've complained about abnor…

In that case it wouldn't have been WaveCrest itself that was dropped. They don't touch the Bitcoin, it's their partners that do (the ones that have their names printed on the card). WaveCrest sells pre-paid cards in general. In the Reddit thread someone pointed to new financial regulation in Gibraltar that took force January 1st but so far they haven't communicated themselves in the matter so it's mostly all speculation.

Re: Bitcoin Visa debit cards are cancelled

#106

Post by lern_too_spel » Fri, Jan 05, 2018, 4:42 PM UTC

sametmax wrote: post #95

acdha wrote: post #42

Earlier quoted context omitted.

Or watching it collapse under its own weight: why does Visa even need to care as long as their transaction rate is 4-5 orders of magnitude better and their fees aren’t a whole multiple of most transaction amounts?

We have ligthning comming up, anx 600+ altcoins to test.

Imagine that you are a business that operates in Bitcoin and pays employees in Bitcoin. How does Lightning solve that? It doesn't. Lightning falls apart if the graph has heavily asymmetric connections, and the only solution is to have banks, which is what these crypto enthusiasts want to get rid of in the first place.

https://medium.com/@jonaldfyookball/mathematical-proof-that-...

Re: Bitcoin Visa debit cards are cancelled

#107

Post by tony101 » Fri, Jan 05, 2018, 4:43 PM UTC

ActsJuvenile wrote: post #101

jaxytee wrote: post #94

Earlier quoted context omitted.

Exactly. The SEC has said they consider crytpos securities. That would mean the fraudulent price manipulation in the crytpo space (Bitfinex treating tether as USD and pushing up the bid) is securities fraud. This is probably why Wells Fargo stopped clearing Dollar transactions for Bitfinex.

Wire transfer fraud. I am an insider in the Bitcoin industry, and within 1 day of opening a new bank account we started seeing fraudulent wires flooding in. When we dug deeper, it was shocking to see how many Americans' bank credentials have been hacked. It takes almost no effort for a EEU/RUS hacker to send a wire from a hacked bank account. Once the fraudulent wire is sent, rest of the wire transfer system is tedio…

As far as I understand it, Coinbase does not allow a user to fund using ACH unless they first prove control of the bank account by:

1) Providing the username and password for online access to the bank account; or

2) Allowing Coinbase to make two micro-deposits to the bank account, and then providing the correct amounts of the deposits when they are received.

Re: Bitcoin Visa debit cards are cancelled

#108

Post by acdha » Fri, Jan 05, 2018, 4:44 PM UTC

sametmax wrote: post #95

acdha wrote: post #42

Earlier quoted context omitted.

Or watching it collapse under its own weight: why does Visa even need to care as long as their transaction rate is 4-5 orders of magnitude better and their fees aren’t a whole multiple of most transaction amounts?

We have ligthning comming up, anx 600+ altcoins to test.

… and perhaps that'll work out but a huge business like Visa isn't going feel threatened by an untested marketing pitch. A very small percentage of people are ideologically committed to cryptocurrencies but everyone serious is going to be looking for proven yes answers to “Does it work at production-level volumes?”, “Is it cheaper than a credit/debit card?”, and “Can my customers use it?”.

For Bitcoin, the answer is no for all three but even if the first and last question were true for something else, the real question is whether #2 could be true: Visa is making a lot of money at 2-3%. If something else started making a serious play, what are the odds that they'd a) give up and go bankrupt or b) lower their fees and be slightly less profitable?

Re: Bitcoin Visa debit cards are cancelled

#109

Post by lawlessone » Fri, Jan 05, 2018, 4:48 PM UTC

lagadu wrote: post #77

etr-strike wrote: post #68

Earlier quoted context omitted.

> Bitcoin effectively froze when Blockstream decided against increasing block size. You mean when the Bitcoin Core implementation of the Bitcoin protocol decided decentralization was an important feature of the currency and transaction compression should be the prioritized means of scaling.

That's the "glass is very half-full" way of putting it :) They could've easily gone both ways: block size increase to 2mb, segwit and lightning network. Hell, Litecoin is well on its way to becoming the de-facto transfer currency between exchanges because it iterates so much quicker (and those 2.5 minute blocktimes sure help).

They might still increase blocksize at a later date. Some other people decided it was a good idea to try force their hand with segwit2x and it failed.

Re: Bitcoin Visa debit cards are cancelled

#110

Post by bentruyman » Fri, Jan 05, 2018, 4:50 PM UTC

illumin8 wrote: post #100

tobiaswk wrote: post #48

Bitcoin is currently not what Bitcoin was when it was created. Slow peer-to-peer transactions and high processing fees. Average fees are hovering around 30 dollars. That's an average. Unconfirmed transactions has been at over 100k for months. The mempool is also hovering around an ATH. The Bitcoin is crippled. Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin us…

> Average fees are hovering around 30 dollars. That's an average. No, they're not. Exaggerating your numbers makes your entire argument less strong. I made a transaction yesterday and the price was only ~$19 if I wanted it confirmed fast (in <2 blocks). The price was about the same last week when I did the same thing. You also have the option of paying a much lower fee if you don't care how fast it transfers. If you'…

> If you're trying to buy a coffee, don't use BTC.

Isn't this sorta what we were hoping to do one day? A proper digital cash replacement? This Bitcoin scalability problem seems like a much bigger deal than most seem to realize. And it's only getting worse.