PSA: The biggest threat to Bitcoin at the moment is BitPay

A few weeks ago BitPay made a change to their payment window, which has far reaching implications.

They do not show a Bitcoin address anymore at all, you only get a link like this: "bitcoin:?r=https://bitpay.com/i/*****************". This is called BIP70 standard. How this works from a technological side, is that your wallet no longer sends the transaction directly to the Bitcoin network, but to BitPay, and then BitPay decides whether to publish the transaction to the network, or reject it (please feel free to correct me if I am wrong and/or is I have oversimplified things). By doing this, BitPay literally becomes the gatekeeper deciding which transactions are "correct", based on political whims. This already means that BitPay invoices can be paid only with several wallets, as most wallets do not support BIP70 at the moment. While there is nothing wrong with BIP70 per se, what is wrong is that BitPay has made this mandatory.

While I do not have any solid proof that BitPay is using this to blacklist addresses / transactions at the moment, it is inevitable that sooner or later they will be forced to not only blacklist some addresses, but more likely to only accept payments from whitelisted addresses. The argument is very simple - up until now, there was no technological way to "reject" a Bitcoin transaction. Now, BitPay has implemented a method to do exactly that. Since the method already exists, the governments will no longer accept the excuse that it is impossible, and will force BitPay (and other Bitcoin payment processors) to implement blacklisting / whitelisting. The worst case scenario would be allowing to only accept payments made using centralized wallets with mandatory KYC.

This greatly hurts the fungibility of Bitcoin. The reality is, that most merchants accept bitcoins via BitPay and other Bitcoin payment processors. If I can not use my bitcoins to pay the majority of the merchants, then they are worth less than "untainted" bitcoins.

What we, as a community, can do to fight this?

1. Develop and promote privacy / fungibility improvements for Bitcoin. In my opinion, weak fungibility is currently Bitcoin's biggest problem / risk.

2. Boycott BitPay and any other Bitcoin payment processors implementing mandatory BIP70.

3. Promote other, socially responsible, pro-Bitcoin payment processors. Contact the stores which use BitPay, and ask them to switch to another payment processor. Explain your reason why you will no longer purchase from them until they switch their processor.

A list of recommended Bitcoin payment processors:

CoinGate - https://coingate.com/accept-bitcoin

Coinpayments - https://www.coinpayments.net

CoinsBank - https://coinsbank.com/merchant

Why some other payment processors are not recommended:

Coinbase - did not integrate SegWit yet, purposefully spammed the network (no transaction batching) to create a transaction backlog and raise the fees: http://bitcoinist.com/mempool-coinbase-spamming-bitcoin/ , supported SegWit2x attack: http://segwit.party/nya/list/

Coinify - supported SegWit2x attack, planned to call "the chain that will have the most hash power" as BTC: https://support.coinify.com/News/NewsItem/View/47/coinify-statement-on-segwit2x-hard-fork

Gocoin - supported SegWit2x attack: http://segwit.party/nya/list/

Submitted February 18, 2018 at 08:54PM by shadowrun456 http://ift.tt/2HrQKzI