Coin Cafe is meant to be an easy way to buy and hold bitcoins, but they apparently do not like people attempting to use bitcoins at the free classifieds provider Backpage.com. After the problems that the website had in the last several weeks, with all of its other merchant processing accounts closed, Bitcoin has garnered some coverage.
However, it appears that users of Coin Cafe are not welcome to use their hosted wallet to purchase services from Backpage.com. The site seems almost hostile to those who would use its services to hire ads from Backpage.com. It seems this is a company policy, not necessarily the company folding under law enforcement pressure.
So far, Coinbase and others have yet to say anything about Backpage.com, but these hosted services are known to work with the government. If the government happens to currently trying to shut down Backpage.com, it seems likely that these wallets will eventually help them.
The solution, for anyone trying to pay Backpage.com, is to get the bitcoins separately and use an actual wallet. Even a mobile or SPV wallet like Electrum will work fine for this purpose. In this scenario, the acquisition of the bitcoins becomes the problem. LocalBitcoins.com will probably be a good way to make this happen. You could buy bitcoins for the long-term usage of the site, for instance, by buying a Paypal MyCash card and going on LocalBitcoins (up to $500). Depending on how fast you want to get your bitcoins, you set a price per BTC you’re willing to pay, and just have one transaction for $500 worth at that price.
Once a user has the bitcoins, they should not leave them in the LocalBitcoins wallet though they could probably do that as well. It would, however, be much more wise to send them to their wallet from there, which is very easy to do. Then using their wallet, pay for the advertising, and keep the coins safe by password protecting or otherwise encrypting the wallet. That would be more ideal than trying to use a web wallet service that ultimately may do something like Coin Cafe is doing.
It would seem that Coin Cafe is fully within their rights, but it becomes a question of whose addresses are interacting with Backpage.com – Coin Cafe, or the user? It would seem that if the user were renting the address from the site, then the address would belong to him or her. Therefore, whatever traffic was taking place to and from the address, it would be associated with the user, not the site.
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