"We have reviewed your PayPal account and found that you are operating as an e-currency dealer/exchanger including the sale of electronic media of exchange (such as electronic money or digital currency). Per our current Acceptable Use Policy for Money Service Businesses, PayPal may not be used to operate a currency exchange, bureau de change or check cashing business including the sale of Bit coin."
So PayPal knows what BTC is, they just straight up ban digital currency sales.
Paypal doesn't work that way, mate.
If the seller required a good account history, and stuck to the US, he may have not had these problems. Arguably those buyers could have screwed him on anything (remember the story about the rare violin destroyed at Paypal's request.)
There are things worth a lot more than $90 bought and sold on eBay every day. I would argue that buyer to seller reputation and thus integrity is more important than the reputation of the marketplace or medium of exchange.
It must work out better for eBay that way. But it sucks to sell anything of high value.
But, eBay probably made the decision by simply asking who it is better to frustrate: sellers who have very little choice of viable venues at which to sell, or buyers who have a plethora of choices from which to buy.
Even when someone isn't claiming their account was hacked (which would be a problem no amount of cryptographic proof would solve) paypal simply doesn't care. I guess that really sums up paypal: Paypal doesn't care.
I sell a JavaScript Game Engine[1] and have made the exact same experience over and over again. Someone buys it, I send out the license email and the download link and 2 days later I see a chargeback. I can show PayPal screengrabs of the license email and database records, showing that my software really has been downloaded from the account in question. They don't care. It's not "proof of shipment" if the shipment doesn't go through physical mail that supports tracking.
I have since come to terms with the fact. I see it as simple piracy - it still annoys me, but I have to live with it.
Funny thing is: if someone sends me an email, saying he's not happy with my software, I always give them a full refund - which somehow isn't nearly as taxing on my mind as PayPal chargebacks.
If yes, then couldn't I inversely buy an expensive item, then take it out of the box, replace it with bricks, and send PayPal pictures of me getting "scammed"? Would I get my money refunded?
"Proof of shipment" shouldn't mean anything.
Credit card companies. And it's not that they don't care about sellers. It's that they care more about the card holders. Consider the protection they afford card holders for card-not-present purchases. 100% protection.
PayPal doesn't have some immunity to that protection. Open your own merchant account, and you'll have the same issues.
> I see it as simple piracy
When it's the card holder claiming a chargeback for an otherwise legitimate purchase, it's known as friendly fraud. Not so friendly. And generally, it's worse than piracy. Normally you are charged for a chargeback (not sure if PayPal charges you a chargeback fee). So in those cases, you actually lose real money, as opposed to piracy.
This is how someone becomes greedy.
>As an advocate of privacy, Bitcoin intrigued me at a fundamental level. Trying to make money was (hopefully) merely a side effect.
Just a side effect!
>I would be scraping maybe $5-10 every BTC, and I would have to wait weeks to see the money. I also had little capital. My interest faltered.
Wow, what an academic undertaking!
But wait, he goes full casino.
>No way. Too good to be true. I know what you're thinking, there's no such thing as a free lunch, PayPal is an insecure way of trading BTC, etc. I wasn't really thinking at the time.
As far as I'm concerned anyone who is into Bitcoin has no right to be angry at Wall Street, because they get sucked into the same damn game.
Cheers.
Are you trying to say that anyone who tries to make money through arbitrage is greedy or has no right to be angry at Wall Street?
This just further confirms my suspicions that you have to be retarded to get involved with bitcoin. No group of people is so easily and quickly persuaded into losing their money, and so readily eager to repeat said behavior over and over again, than bitcoiners.
There's no scam, if there's no scammer. Think about it.
Having this mindset is a start.
I was also under the impression that PayPal does not allow selling Bitcoin or Bitcoin hardware. This transaction should have been stopped automatically, and it's a shame Ebay doesn't have automatic tools to stop blatant abuse of their own policies.
It does appear that they haven't yet implemented a filter to prevent/warn sellers from selling Bitcoin, though.
One person could easily act as buyer and seller. Seller receives payment and withdraws it to a virtual bank account attached to a random prepaid credit card that can be bought at any store with cash, then "buyer" (the same person operating a different account) contacts PayPal and claims they never received it from the evil seller. PayPal must reverse the transaction and eat the loss because it was against their policies for the transaction to ever have taken place. There is some work involved, but even just one $300 transaction per day is certainly plenty of money for alot of the kinds of people that would do this.
It's far from clear that PayPal must reverse forbidden transactions. In fact, the behavior seems to be "PayPal can do whatever it chooses with forbidden transactions." In computer science terms, the result of submitting a forbidden transaction is undefined: it might go through, it might not go through or something entirely unexpected (party van?) may occur.
Given the number of people who try to scam PayPal every day (it's a huge and visible target, to the extent that a security company basically spun out of PayPal), I'd be very surprised if this hadn't been tried already.
This is why trading channels like #bitcoinotc discourage any use of paypal - but for times where you have to use it, there's the trust system.
Clearly there is a free lunch, and it's buying Bitcoin on Ebay.
http://www.ebay.com/sch/i.html?_nkw=bitcoin
Look at all that free money.
I mean, for the small price of feeling like a twat, a small transaction fee, and locking up a couple hundred bucks for a month... you get a Bitcoin. So why aren't these listings being sponged up by a few people that don't mind the twat factor?
Kinda takes the point out of bitcoin though doesn't it?
If you think the point of Bitcoin/Litecoin is being able to transact with it quickly and easily over eBay, you might want to look into the other things you can do with these new currencies.
No, no he wouldn't. This is Paypal we're talking about.
A challenge with a volatile pair like BTC-USD is keeping the portfolio delta hedged, i.e. neutral with regards to movements in BTC-USD. Without the ability to even borrow BTC effectively this becomes difficult to do cost-effectively. That said, a volatile pair in a fragmented market allows for market making sans leverage.
Taking a space arbitrage, as the author presented, and executing it as a space-time trade, as the author presented (buying in one place, waiting, selling in another), is not arbitrage.
I.E. Why is the space vs. space-time distinction important? Why is borrowing BTC important? You give an "i.e." but I still don't understand delta hedged.
But you can also block non-US buyers I believe which will slightly reduce your risk.
So much hassle to cover VPN costs...
I did appreciate the author's "discovery" of a market mechanism... I'm going to go bid on some bitcoin now and do this arb the right way!
We have a fairly large number of transactions per day, so I can only assume that our account got flagged somehow.
That said, Paypal only sides with us if it was a transfer of Paypal balance. If the transaction was backed by a credit card, and the credit card was charged back rather than done via a Paypal dispute, we will lose every time.
Of course, we don't purposely do business with anyone from China, but they go to great lengths to cover their origin, even employing Mechanical Turk workers to do some of their dirty work. The guy who purposely sold BTC to someone out of China was literally begging for what he got.
And these guys are virtually untouchable. We are a small business and we see a ton of this stuff, so I can imagine what larger businesses must experience. eBay alone must be the conduit for tens or hundreds of millions in fraud from China.
Amidst all of the talk about stolen IP, military secrets, etc. emanating from China, the likely billions of dollars in fraud targeted at American consumers and businesses is the great untold story.
It's slower, and there's the slight cost of postage, but as least you have proof of postage as it's technically a physical item.
eBay sellers who sold virtual goods got caught a few years ago when eBay changed their policy on virtual items, but I've noticed sellers often now delivery the item via email but also on a burned CD or whatever to skirt the rules.
http://stakeventures.com/articles/2012/03/07/the-may-scale-o...
People buying your bitcoins for 100-200% above market price.
After you send the bitcoins, they do a charge back on you.
Can't get your bitcoins back and Paypal is on the buyer's side. SOL.
It is not enough just to show them some online tracking which shows that the item arrived (even in some cases if it has a signature verification attached).
http://bitcoinfan.blogspot.com/2011/12/why-selling-bitcoins-...
If something seems too good to be true; it probably is.
