Buy BitCoin at Any Wells Fargo or Chase Bank

http://www.betabeat.com/2011/08/15/bitoin-exchange-chase-wells-fargo-exch/

by feydr • 15 years ago

44 23 15 years ago

trevoro• 15 years ago

Are you buying BitCoin at Wells Fargo and Chase? Or are you just making a deposit? This isn't as though these banks are carrying a balance of BitCoin as they would foreign currency.

lukejduncan• 15 years ago

The title is link-bait. You're making a deposit

NHQ• 15 years ago

It is really a currency exchange. This is a pretty clever 'hack', to use branch banking. They could conceivably offer other currency exchanges as well, and compete with the same banks on the exchange rate. You really have to trust the company tho, cuz you are depositing your cash into their bank account.

dkokelley3• 15 years ago

This system seems ripe for exploitation. Banks 'clear' checks by granting the account holder access to the funds they expect to be available. A check can still be bounced or returned days or even weeks later in the case of fraud.

This is how a very common scam works. Receive a check written for more than you were expecting (usually for the sale of some goods or as prepayment for a service). Receive instructions to deposit the check and return the difference to them (with a healthy profit for your troubles). Weeks later, the check bounces and your account is debited the amount of the check, while the scammer has the cash you wired to them. Essentially, the scammer uses your good standing with the bank to cash a bad check.

Given the nature of this system, what's to stop someone from depositing a bad check, emailing the receipt, and receiving BTC after the funds are released but before the check actually clears (or rather, bounces)?

tedunangst2• 15 years ago

It's a social experiment. After someone deposits a bad check and blogs about it, we'll call them nasty names, then it won't happen again.

dkokelley3• 15 years ago

What do you mean by "it won't happen again"? I don't think calling someone nasty names will prevent a fraudster from trying to exploit this system.

If anything, I think the system would shut down to prevent any more abuse.

javert4• 15 years ago

You have it backwards. When someone deposits a bad check it's bad for ExchB. Makes it easy to steal from them. So the question is, how is this a viable business model for them? (I don't know the answer, would be interested to hear it..)

starwed2• 15 years ago

The scam and your idea seem fundamentally different.

I'm not sure exactly how this ExchB thing works, but since your exploit involves personally writing a bad check, and then cashing it at a bank... seems like you would end up being liable.

hippich• 15 years ago

Who said scammer will be using his own checking account to write checks?

dkokelley3• 15 years ago

The scam and my idea ARE different, but the same principle allows both to be accomplished. Funds are made available from checks well before money is collected. To someone unaware of the system, they might assume the check was good because the money was cleared into their account. This is what would trick ExchB into granting you BTC without the guarantee that they were paid.

cowkingdeluxe• 15 years ago

Misleading title.

mcfunley• 15 years ago

Yes, it makes it sound like those banks endorse bitcoin in some way.

jellicle• 15 years ago

Step 1: give money to ExchB, "founded May 2011". Has been in business MORE THAN A MONTH, therefore is ULTRA-TRUSTWORTHY. The invisible hand of the market says so!

Step 2: ExchB gets hacked or gets "hacked", your money disappears

Step 3: profit!

Caution: the profit in step 3 may not be your own.

bproper• 15 years ago

Betabeat did put some money into the Bitcoin wallet MyBitcoin.com and lost it all when the site got hacked.

http://www.betabeat.com/2011/08/02/digital-derivatives-bitco...

javert4• 15 years ago

Step 1: Give money to ExchB.

Step 2: Withdraw bitcoins from ExchB.

That's pretty much how BitCoin is supposed to work. You store the coins in a secure place, like your hard drive. The only real vulnerability is if ExchB gets hacked or rips you off between Step 1 and Step 2. So don't do humongous transactions, and do one at a time (which is probably what you'd do anyway).

Your argument is pretty much worthless. It's a straw man. If you don't understand BitCoin, don't pretend like you do. If you do understand BitCoin, don't make silly arguments.

Non-disclaimer: I am totally not affiliated with ExchB at all. I don't even own any BitCoins.

wmf2• 15 years ago

There's not much risk for a one-time transaction, but Bitcoin daytraders need to keep a balance at the exchange.

wmf2• 15 years ago

Even after reading the ExchB site, I don't understand how this works. You deposit money... into what account? Yours? How does it get to the exchange?

timtadh• 15 years ago

Note: According to their terms[1] if ExchB looses your money (either USD or BTC) they are not liable for that money. Bitcoin is interesting, but these exchange markets are so shady. There is essentially zero consumer protection when using them. I have the expectation when I deposit money in an account to have the assurance that money will be available to me, no matter what. ExchB does not guarantee that. Therefore, I will not use their service or another until such reasonable guarantees can be made.

[1] https://www.exchangebitcoins.com/terms

javert4• 15 years ago

My apologies for saying something similar in a different comment, but:

Step 1: Deposit money to ExchB

Step 2: Withdraw bitcoins

Only vulnerability for you is when you've done Step 1 but not Step 2 yet. Don't do humongous deposits, and don't have multiple outstanding transactions with ExchB, and you'll be fine.

Buy BitCoin at Any Wells Fargo or Chase Bank

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