Ebay apparently doesn’t want anyone competing with its Paypal service as the website recently took down a merchant listing because the owner was willing to accept bitcoin. While bitcoin is emerging as a popular online payment option, some companies, such as eBay have been slow to adopt it.
Andy Shroder, who put the listing up, is a solar energy research and solar panel manufacturer. When Shroder inquired about the delisting, eBay responded that they do not allow merchants to accept bitcoin as payment. Apparently, bitcoin does not meet eBay’s requirements in regards to security and safety, or at least that’s what the company told Mr. Shroder.
These criticisms, however, are questionable at best. It’s true that if mishandled, bitcoin can be somewhat risky to use. There are a variety of scams and other issues involved with bitcoin, but this is true of all of every type of payment and financial service. Where there is money and value, there will be thieves looking to steal. The real question is whether bitcoin poses more of a risk than other forms of payment, which doesn’t appear to be true.
After years of development, security protocols and software for leading bitcoin wallets are now exceptionally strong. At the same time, anonymity features and the fact that bitcoins can be stored offline in “cold storage” make bitcoin very safe, if you take the proper precautions. Of course, if you mishandle bitcoins by not having a secure password, etc. your wealth will be at risk.
The biggest downside to bitcoin is that once your coins are stolen they are near impossible to recover. That’s why it is important to make sure that your bitcoins are secure from the get go. Pick a very hard to decrypt password, use a secure wallet service, and split your wealth up among different wallets (each with a unique password). Often, when you read about people being scammed, it’s because they didn’t take the proper precautions.
eBay’s current anti-bitcoin policy is a far cry from just a few years ago when the company’s CEO John Donahoe stated that he hoped to integrate the currency with Paypal, the company’s popular online payment service. Unfortunately, the integration never came to fruition and eBay has since adopted an active anti-bitcoin policy. In the past it was common for eBay to delist postings simply for mentioning the online currency.
We can’t speak for eBay, of course, but it seems just as likely that the company is worried about competition as it is about the “safety and security” features of bitcoin. eBay’s big money maker right now isn’t actually the company’s sales platform, but its payment service Paypal.
eBay will be spinning Paypal off in coming days, and is expected to profit from the spin off. The spun off payment service could be worth as much as $40 billion dollars on its own. Once eBay and Paypal begin to untangle themselves it’s possible that eBay itself may grow more open to alternative payment services. Of course, this is pure speculation, and we’ll have to wait to see what the future holds.
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