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.
This is one of the worst crypto-debit cards I've seen. Coinbase's card has a "Crypto Liquidation Fee": 2.49% of transaction. (Even Gemini, the most expensive cryptoexchange has 1% exchange fees, while the median is probably around 0.2%)
You are better off selling manually on an exchange (0.1-0.25% fees) and transferring to a sane bank with debit cards and minimal fees like N26(EU) or Charles Schwab(US).
Have a fiat buffer, but control your holdings and don't get milk by fee-vampires like Coinbase.
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 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.
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.
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.
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.
>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.
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)
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
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.
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.
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 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.
The idea is to preferentially spend cryptocurrency over dollars. This only works on the assumption that dollars are ``better money''[1] than cryptocurrencies. People spend worse money before their good money. Coinbase is making a bet that there will be a lot of people sitting on piles of depreciating cryptocurrency that they don't mind liquidating. They're making a very bearish bet, or maybe just hedging their business model to survive a little longer.
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.
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
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.
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 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.
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.
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.
As some people have already mentioned, spending crypto in the US is classified as a taxable event. So I think it's questionable to market crypto as a replacement for traditional spending when you have additional overhead that is not being accounted for and would definitely come up in the event of an audit.
[+] [-] ilaksh|7 years ago|reply
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.
[+] [-] kbody|7 years ago|reply
You are better off selling manually on an exchange (0.1-0.25% fees) and transferring to a sane bank with debit cards and minimal fees like N26(EU) or Charles Schwab(US).
Have a fiat buffer, but control your holdings and don't get milk by fee-vampires like Coinbase.
[+] [-] briatx|7 years ago|reply
I'm not sure why people want to make it harder (and more expensive) than necessary.
[+] [-] londons_explore|7 years ago|reply
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?
[+] [-] patio11|7 years ago|reply
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).
[+] [-] sfotm|7 years ago|reply
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.
[+] [-] chrisco255|7 years ago|reply
Gold is hard to sell in tiny fractions as well.
[+] [-] gohbgl|7 years ago|reply
Of course when both parties are clients of Coinbase or Goldmoney respectively then the ownership of the bitcoins/gold can be directly transferred.
[+] [-] Zr40|7 years ago|reply
[+] [-] freddie_mercury|7 years ago|reply
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.
[+] [-] kurtisc|7 years ago|reply
[+] [-] sfcguyus|7 years ago|reply
[+] [-] berberous|7 years ago|reply
[+] [-] hanniabu|7 years ago|reply
[+] [-] londons_explore|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] seattle_spring|7 years ago|reply
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!
[+] [-] sucrose|7 years ago|reply
[+] [-] bufferoverflow|7 years ago|reply
[+] [-] djpilot|7 years ago|reply
Heck, I even used it to pay my back taxes to the IRS.
[+] [-] simias|7 years ago|reply
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.
[+] [-] headsoup|7 years ago|reply
[+] [-] isolli|7 years ago|reply
[+] [-] jfk13|7 years ago|reply
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.
[+] [-] oarsinsync|7 years ago|reply
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)
[+] [-] tim333|7 years ago|reply
[+] [-] sdfsdfsdfsdf3|7 years ago|reply
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
[+] [-] Matsta|7 years ago|reply
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.
[+] [-] strogonoff|7 years ago|reply
> 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.
[+] [-] thesimon|7 years ago|reply
That should change within the next few weeks as PSD2 requires that.
[+] [-] tshanmu|7 years ago|reply
[+] [-] dalbasal|7 years ago|reply
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.
[+] [-] zelly|7 years ago|reply
[1] https://en.wikipedia.org/wiki/Gresham%27s_law
[+] [-] hellllllllooo|7 years ago|reply
Seems to completely work around the reasons why Bitcoin etc. were interesting in the first place as a technology.
[+] [-] apo|7 years ago|reply
> Crypto Liquidation Fees: 2.49%
https://support.coinbase.com/customer/portal/articles/296991...
[+] [-] seppin|7 years ago|reply
[+] [-] dead_mall|7 years ago|reply
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
[+] [-] foepys|7 years ago|reply
And here I am with my "old tech" SEPA bank account and Instant Payments that take 15 seconds max...
[+] [-] guessmyname|7 years ago|reply
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/
[+] [-] Krasnol|7 years ago|reply
[+] [-] arsenico|7 years ago|reply
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.
[+] [-] londons_explore|7 years ago|reply
[+] [-] lawn|7 years ago|reply
[+] [-] Cthulhu_|7 years ago|reply
[+] [-] dawhizkid|7 years ago|reply
I'm guessing that's a reason why something like this won't arrive in the U.S. anytime soon...at least one blessed by U.S. regulators.
[+] [-] gregoryrueda|7 years ago|reply
[+] [-] Shank|7 years ago|reply
> 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.
[+] [-] wiggler00m|7 years ago|reply
For example: Square.
[+] [-] edpichler|7 years ago|reply
A hedge strategy could help me on this, but this is more work. It's easy to transform it into a more stable currency.
[+] [-] atarian|7 years ago|reply