VISA and Mastercard make it harder to buy Bitcoin and other cryptocurrencies

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Sometime in the last week Bitcoin investors started noticing additional fees on their bank statements. It turns out that VISA and Mastercard both decided (how convenient!) to reclassify the way Bitcoin and other cryptocurrency purchases are processed on their networks. Incidents like this pose several challenges for the cryptocurrency industry short-term, but also show just how scared the incumbents really are.

Currently, if you want to buy bitcoin, ethereum or any other alt-coin instantly, the only option is to use your debit or credit card. Transferring funds from your bank has lower fees, but takes several days. Coinbase has long accepted debit and credit cards for instant buys, however, passing on to the buyer the standard 4 percent credit card transaction fee.

Now, it seems VISA and Mastercard have quietly reclassified the way Coinbase credit card purchases are processed on their networks. Coinbase transactions (and presumably all other exchanges, as well) are now being labeled as a “cash advance” rather than a “purchase.” Fees will vary by institution, but what this means is that using a credit card will result in an additional 5 percent fee tacked on by your credit card merchant, in addition to the 4 percent credit card transaction fee already passed on by Coinbase.

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Even worse is that cash advances do not fall under the standard interest-free grace period that consumers expect for other credit card purchases. The moment the Coinbase purchase goes through, the transaction accrues and compounds daily. If that isn’t bad enough, the interest rate is also higher for cash advances  —  an astonishing 25.99 percent in one case. Lastly, but equally as important for some consumers, these purchases will no longer qualify for earning credit card points.

For example, a $5,000 instant bitcoin purchase made on Coinbase using a VISA or Mastercard credit card will now result in roughly $500 in fees + interest too. For most people, losing 10 percent of your investment in fees means that the practice of using a credit card to buy cryptocurrency is effectively over. It will become more difficult for investors to purchase bitcoin and other cryptocurrency on their terms. Transferring funds via ACH takes three to five business days. In a world where cryptocurrency prices can swing wildly in either direction, a week feels like a nail-biting eternity.

In an email to all customers last night Coinbase confirmed the change, claiming “the MCC code for digital currency purchases was changed by a number of the major credit card networks” and will now allow banks and card issuers to charge “additional cash advance fees.” When asked for comment a spokesperson for Mastercard had this to say: “Over the past few weeks, we have clarified to acquirers — or the merchant’s bank — the right transaction or merchant category code to use for these type of transactions (cryptocurrency purchases). This provides a consistent view of such purchases for both merchants and issuers.”

If anything, this change makes things more complicated in the short term. Authorities are already divided on what bitcoin “is”: the IRS has already said bitcoin is not “currency” and treats it as taxable property, however, credit card companies are now telling us that buying bitcoin is the same thing as pulling cash out of an ATM.

Both things can’t be true. By reclassifying Coinbase (and presumably all other exchanges, as well), VISA and Mastercard are doing their best to make it harder, slower and more expensive for people to invest in cryptocurrency. Credit card companies believe it’s in their best interest to turn away millions in additional revenue in exchange for slowing the rush of investment into bitcoin. In many ways, that’s true. The rise of bitcoin and future cryptocurrency is tied to the eventual fall of financial middlemen like VISA and Mastercard. Maybe they just woke up to it.

Read more: https://techcrunch.com/2018/02/05/visa-and-mastercard-make-it-harder-to-buy-bitcoin-and-other-cryptocurrencies/

As Bitcoin plummets Coinbase temporarily halts trading

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Image: AFP/Getty Images

Coinbase — the largest Bitcoin market in the U.S. — has disabled all buying and selling as the digital currency Bitcoin dramatically loses value. 

At 11:11 a.m. EST, Coinbase posted that it had temporarally disabled trading:

All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience. 

About 25 minutes later, at 11:35 a.m. EST, the company said it’s still monitoring the problem:

Due to today’s high traffic, buys and sells may be temporarily offline. We’re working on restoring full availability as soon as possible. 

This “high traffic” is largely in reference to activity in the Bitcoin market. Bitcoin is the world’s highest-valued currency, as one Bitcoin hit nearly $20,000 this December.

But it’s lost about a quarter of its value in the last 24 hours and the fickle currency is now trading at around $12,874 — and some exchanges around $11,000.

Other cryptocurrencies have followed the pattern: Ethereum, Litecoin, and Bitcoin cash have all lost a quarter of their value over the last day. 

All of this frenetic activity likely overburdened Coinbase’s services — something it might better account for going forward: New currencies are inherently unstable, and the today’s cryptocurrencies will be swinging up and down for quite some time.

Read more: http://mashable.com/2017/12/22/coinbase-halts-trading-as-bitcoin-falls/

Bitcoin breaks $3,000 to reach new all-time high

Bitcoin has actually reached a record high assessment of $3,000 per coin to finish a rollercoaster week that start with the long-awaited split of the cryptocurrency.

A variety of exchanges, consisting of popular locations Coinbase and Kraken , valued a single bitcoin at over $3,000, an all-time high that is up $485 on the assessment one month back. Previously this year, Bitcoin rose to go beyond $2,000 for the very first time in May going on to practically reach $3,000 in June just for the appraisal to crash .

Over the last twelve hours, bitcoins worth has actually leapt by over 10 percent as forked currency bitcoin money has actually seen its evaluation crash by 30 percent.Some exchanges consisting of Chinas OkCoin even put the worth of one bitcoin above $3,200 today.

Finally, the rise implies that the overall market cap of bitcoin is more than $50 billion $51,737,289,581 at the time of composing inning accordance with Coinmarketcap.com .

A Coinbase chart reveals bitcoins appraisal has actually passed$3,000 per coin

One chief issue around the currency was unpredictability around the capacity of a split. Some factions of the bitcoin

neighborhood advised for modification to counter the slowing down processing rates of bitcoin. The outcome was a fork called bitcoin money (called BCH)which originated on August 1.

BCH replicated the initial bitcoin blockchain, suggesting that anybody holding BTC was entitled to BCH, too. Not all exchanges consisting of Coinbase supported the forked currency from day one. That resulted in droves of clients obviously taking their coins from Coinbase, as well as risks of legal action, which eventually triggered Coinbase to alter its mind and promise to support BCH withdrawals from clients by January 1. It hasn’t dedicated to trading at this point.

BCH has actually sustained a relatively unpredictable very first week, even for bitcoin requirements.

The currency began life valued around$555, prior to peaking at$ 727 on Wednesday. It later on crashed to its existing rate of around$220 as bitcoin, on the other hand, skyrocketed to cross that$3,000 mark.

The very first week of trading for bitcoin money, viaCoinmarketcap.com

Experts are doubtful of BCHs long-lasting future since, at this moment, beyond the unsteady assessment, there isn’t really in fact anything that can be maded with it. That might

alter in the future if the task draws in sufficient business and designers, however the challenging that it requires to mine BCH versus bitcoin isn’t really warranted to numerous miners. That might adjust modification in the future, as a Coindesk story just recently recommended , however bitcoin stays the more profitable choice since today.

Note: Story upgraded to alter bitcoin money abbreviation to BCH.

Read more: https://techcrunch.com/2017/08/04/bitcoin-3000/