While various governments around the world are looking at ways to regulate Bitcoin, companies dealing in virtual currencies are subject to subpoenas. This should come as no surprise, as any company in the world needs to adhere to specific laws of the country they operate in. That being said, subpoenas for a Bitcoin payment processor are a clear sign of why centralized services are not the answer.
BitPay – Largest Centralized Bitcoin Payment Processor
When a merchant wants to accept Bitcoin payments directly, they will more often than not choose the cookie-cutter solution and sign up for an account with one of the many payment processors available. From a convenience points of view, it only seems to make sense to do so, as these payment processors offer double=spend insurance and convert Bitcoin to fiat currency on behalf of the merchant
This is also where the problem lies, as Bitcoin payment processors – such as BitPay – are touching customer funds directly. Bitcoin transactions are sent to addresses generated by and belonging to BitPay; and the conversion to fiat currency is done through exchange and bank accounts belonging to BitPay as well. If