Mock Bitcoins are displayed on a table in an illustration picture
Mock Bitcoins are displayed on a table in an illustration pictureReuters
Popular digital currency bitcoin is expected to overtake e-commerce giant eBay's paymentprocessor PayPal in terms of US dollar transactions in the near future.
California-based hedge fund Laureate Trust says that bitcoin is fast establishing itself as the currency to use globally and instantly to make purchases or payments over the internet recording nearly $300m (£178m, €220m) daily in transactions.
"Whenever you have an instrument that trades over 300 million US dollars a day, it must be recognized," Peter Tasca, CEO of Laureate Trust, said in a statement.
"The digital currency works, Bitcoin has greater volume transactions than Western Union and we anticipate it will overtake PayPal later this year."
PayPal processes payments totalling $315.3m every day, according to Statistic Brain.
"In the next one or two years, Bitcoin can surpass the dollar transaction volumes of other established payment companies including Discover, and even American Express, MasterCard, and Visa," said SmartMetric CEO Chaya Hendrick.
Bitcoin was launched in 2008 and is traded within a global network of computers. They can be transferred without going through banks or clearing houses, reducing fees involved in the services significantly.
The number of retailers who accept the digital currency as payment option has been increasing, as it gained more in terms of popularity and value. Its value peaked at $1,250 in November 2013, but declined below $300 after troubles such as the collapse of exchange MtGox and crackdown on the currency in China.
Bitcoin is trading at $520.52 as at 7:47 am BST, according to Coindesk.
Laureate expects the price to increase by 50% in the near term, as it becomes more popular for transactions.
Laureate manages a $5bn fund with investments in trade stocks, bonds and option contracts in over 100 regulated market exchanges.
In February, the hedge fund issued a "speculative" buy rating on bitcoin after the digital currency had survived two crashes causing a 70% drop in value within a few months.
In a filing with the US Securities and Exchanges Commission (SEC), eBay earlier regarded bitcoin as a "potential competitor" to PayPal. While PayPal charges a 2-3% fee for processing transactions, payments using bitcoin could be done with negligible fees.
John Donahoe, CEO of eBay, earlier said that he is actively considering an integration of bitcoin with PayPal. EBay still does not accept bitcoin or other digital currencies for payments.

Bitcoin Reddit .....

Bitstamp posts......

submitted  by bs519
Just wanted to make users fully aware that Bitstamp may refuse to process withdrawals unless you go provide intrusive and personal information.
Background: My account is fully verified. I traded regularly in 2013 buy haven't made a trade since December. I purchased $2500 worth earlier this week through a different exchange and sold on bitstamp after the quick price rise.
After requesting with withdrawal, here is what happened:
We have received your withdrawal request. As your withdrawal request met some of our volume and frequency thresholds, we will have to kindly ask you to help us better understand the nature of your relationship with Bitstamp.
In order to do so, we require that an additional KYC (know your customer) procedure is completed before we can proceed with the processing of your transfer.
We kindly ask you to send us a high resolution image of both pages of your international passport and answer the following KYC questionnaire: 1. How did you learn about Bitcoin? 2. The purpose of trading on Bitstamp? Please describe in as much detail as possible how you intend to use your trading account. 3. What is the origin of the deposited Bitcoins? If mining, please specify your hardware specifications and submit a receipt or an invoice for your mining equipment. 4. What are your future plans and activities planned on our exchange? 5. Do you plan more withdrawals in the future? 6. Which bank do you intend to use? Please provide the complete address and SWIFT code. 7. Estimated amount that you would be depositing/withdrawing to/from your Bitstamp account per month (in USD and BTC)?
We kindly ask you to submit your answers and documents in a reply to this ticket.
OK fine, here are the details and my passport (already verified with driver's license and had swift code already entered).
They required that I prove where the coins came from that I sold. I provided the receipt from the exchange. Here is what they came back with.
Thank you for your reply.
Please note that the provided information is for only 5 BTC while you have deposited to and sold on Bitstamp more than xxx bitcoins.
We kindly ask you to send us a signed message of your personal, most used wallet so we can establish the veracity of your statements.
The "Sign Message" feature is an advanced functionality of the Bitcoin client which allows you to sign arbitrary messages to prove to somebody that you are (were) in control of the funds of some Bitcoin address.
Since the exact way how to send a signed message differs between different wallet provider we advise you to try to find the information on your wallet provider's site.
If you are using blockchain here is a shot tutorial:
Thank you for your cooperation.
We look forward to your reply.
Not only is this extremely intrusive, it wouldn't actually show them where I bought the coins. I understand KYC requirements but this is beyond anything in the financial industry. And the coins I traded (under 500) were over the history of my account (not just this one trade). They eventually cancelled my withdrawal so I was able to get coins out (at a loss though).
So just a heads up, be prepared to require this sort of information if you want to trade on bitstamp.


submitted   by Kenishi99
Dear Bitstamp staff
To stop spreading rumors and to be clear why and when you withhold your customers funds I'm asking you to give us an official answer here.

Please answer at least these questions:
  • Why are you withholding customers funds?
  • What exactly happened that you do that (high trading volume, only BTC deposits and no fiat deposits, ...)?
  • When did you begin with these procedures?
  • Why didn't you tell your customers before beginning asking these questions?
  • Do we need to worry about Bitstamps solvency?
  • How do I find out if my account is "flagged" too?
  • Which questions do you ask exactly?
  • What'll happen with the funds when someone can't answer one of your questions completely? (old wallet service down, ...)

Please keep being transparent. This is very important for your customers, for the community and for Bitcoin itself.
After the death of Mt. Gox the transparency and communication with customers got more important than it ever was.