Why PayPal “accepting” Bitcoin is nothing to do with Apple mobile payments and what is Ebays future?

PayPal “accepting” Bitcoin V Apple payments

 

EBay Inc. (EBAY)’s PayPal service will start accepting bitcoins, opening up the world’s second-biggest Internet payment network to virtual currency transactions.

“We’re announcing PayPal’s first foray into bitcoin,” Bill Ready, the chief of EBay’s Braintree unit, said at Techcrunch’s Disrupt SF conference yesterday. “Over the coming months we’ll allow our merchants to accept bitcoin. On the consumer side it will be a sleek experience.”

From http://www.bloomberg.com/news/2014-09-08/ebay-s-paypal-unit-to-start-accepting-bitcoin-payments.html

 

Some people have related this news to the recent announcement that Apple will soon integrate mobile payments, and have effectively done a deal with the major card corporations.

 

Apple announced Tuesday it’s partnering with Visa, Mastercard, and American Express along with several issuing banks to allow iPhone users to store their credit card accounts. Apple Pay will be available in 220,000 US merchant locations that already take mobile payments via the NFC’s short range, secure wireless capabilities.

From http://www.cnet.com/au/news/apple-adds-nfc-to-iphone-6-with-apple-pay/

 

 

The important points to understand Re Apple payments:

In Australia (and the UK  apparently)  for a few years now users have been using a payment method called “Pay Pass” it just means that a user can tap the Visa or Mastercard on a NFC device that is primed for a payment.

let’s go though the steps the Apple payment innovation means for Joe six-pack, as against say, Pay Pass.

Apple mobile payments steps.

  1. Get iPhone device out (hope battery is alive and charged)
  2. Unlock screen, likely by entering a password.
  3. Open an app.
  4. type in another password (likely)
  5. Tap the phone device for payment.

Pay Pass Steps.

  1. Pull out card.
  2. Tap card.

 

So hopefully that’s all I really have to say about Apple mobile payments, if i have gotten this wrong or misunderstood please give feedback.

 

The Pay Pal Bitcoin Vector

This is not about competing with Apple this is about competing for survival as a company, let me explain what is just over the horizon, and explain the points.

  • Ebay is by now a large online company that gains much of its revenue from its integration with Pay pal and fees generated by sales and transactions.
  • I.e just connecting buyers and sellers, Ebay is a connection company.
  • With just a normal amount of competition in the marketplace Ebay struggles to hold this monopoly.

I will refer the reader to the fact that Ebay purchased the “Free” auction site “Gumtree”

http://www.manchestereveningnews.co.uk/business/business-news/ebay-buys-gumtreecom-1069793

so this was way back in 2005 but this is a “horizontal acquisition” that is to say they had a competitor that was also online but offering the thing that generates their revenue, (connecting buyers and sellers) but doing it essentially “for free.”

after the “Gumtree” brand had grown to a degree where it was disrupting the Ebay revenue it made more sense to acquire it and either, close it down or generate revenue from it.

Now I will show you what the future holds and why it may be troubling for Pay pal / Ebay.

 

  • Imagine a “Gumtree” that  can’t be purchased or shut down, it has no central authority. ( it has no owner.)
  • Imagine that this decentralized “Gumtree” accepts both traditional payments and Crypto currency. (this is possible)
  • Imagine that this “Gumtree” can provide sellers and buyers connections at a fraction of the price that Ebay does (where Ebay/Pay Pal generate all their primary revenue)

 

Features of a Decentralized market place.

  • Software is likely open source (at its core) this means multiple “marketplaces” will compete.
  • Auction software is either downloaded via app or completely online. i.e it only needs a browser for the front facing aspects.
  • Apple and Android won’t be able to “ban it” (because it only needs a browser to run)
  • Its core mechanics will run on top of a crypto currency protocol which is decentralized and can’t be closed down.
  • This means no one will own this “auction site” so no one can “buy it”
  • It will use fee free Crypto currency (similar to Quark) and others (Bitcoin with fees) to lower the cost of connecting buyers and sellers to a fraction of previous times.
  • This massive cost reduction will be a large attractor for sellers, and may mean that they overcome any roadblocks that traditional corporations put up for them converting crypto to other exchanges.
  • Pressure from corporations, Banks and their co-operating  governments on exchange points  may just mean that crypto gets “recycled” back into goods from sellers.
  • This means that a viable online decentralized market place economy could grow.

 

Summary

That is a what a decentralized market place is, and it’s probably not too far away, in fact it’s already built.

It can be bootstrapped from any nation on the earth, and can not be shut down, so what is the future of the “Ebay / Pay Pal” “Auction” business model?

Open Bazaar is just one decentralized market place read more about it here : http://cointelegraph.com/news/112430/openbazaar-the-untouchable-online-market-inches-closer-to-game-time

 

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8 comments

  1. Yes you got ApplePay completely wrong.

    The real step: pull iPhone or iWatch, press Pay Button (which is a Fingerprint Sensor to confirm). No password or anything as you say…

  2. “So hopefully that’s all i really have to say about Apple mobile payments, if i have gotten this wrong or misunderstood please give feedback.”

    Wrong.

    I look forward to the day when I can get rid of my “inanimate battery-less piece of plastic”

    That leaves one thing left – How the f&*2 do I get rid of my ID card?

    Perhaps, limiting the need to supply ID would be feasible to stop carrying it around.

    1. why get rid of a plastic card to replace it with a device that can; record your voice, view though your camera and track your precise geographical location? if you want to get rid of “ID” that’s going to be a problem.

      1. You know what scares me?

        A single entity a corporation or a government telling me or other individuals what we can or can’t buy or use our energy on, also telling individuals what unit or “token” they must accept for their energy or “work”

        iPhones scare me, not the device but the lack of critical thought that many users display around the “viability” of the device.

        Some Religious people scare me, becasue they are half educated on matters and see the world in black and white terms.

        “The Chip” is here its called your “Bank account” it can be canceled at any time by a corporation and you will not be able to transact from it, also your iPhone tracks your movements and records all your activities.

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