While covering Bitcoin 2013 in San Jose this past weekend, CoinDesk sat down and talked with Tony Gallippi, co-founder and CEO of the payment processing firm BitPay:
CoinDesk: Why do people need BitPay when they can just put their Bitcoin address on their website and get paid for free?
Gallippi: (Without a payment processor) you have no idea who just paid you, or what is it for …
CoinDesk: What kind of companies need your service?
Tony Gallippi, BitPayGallippi: Ninety percent of our clients are e-commerce … The companies that we have (feel) the most pain trying to collect payments through the available methods. Credit cards were never designed for the internet … If they’re selling a high-ticket item, they’re even more at risk. If a criminal gets their hands on a stolen credit card, they know they have one or two shots to buy the most expensive thing they can buy before that card gets turned off. They buy computers, televisions, gold jewelry… For businesses selling these types of items, they run a huge risk of payment fraud.
CoinDesk: Is there really no fraud with Bitcoin transactions?
Gallippi: People have been trying. The way to do it is to try to execute a double spend. If i have one bitcoin, I want to send it to you and send it to someone else at the same time, and have both of you think you just got paid. The speed of the network now will approve one of those transactions and reject one. To really execute a double spend, you’d have to get involved in bitcoin mining (and spend hundreds of thousands, or maybe millions of dollars) It’s just not worth it.
CoinDesk: How did you feel about the US government action against Mutum Sigillum? Did it surprise you?
Gallippi: That really didn’t worry us at all. We didn’t have any currency in Mt. Gox. It was really just a non-event. What Mt. Gox had set up is a shell company in the United States … The question is, if the entity here is collecting money from customers and sending it to their parent company, is that considered a transmission activity? Apprently the DHS (Department of Homeland Security) thinks it is and says they’re doing it without a license. But I think they’re going to have a hard time enforcing that.
CoinDesk: Is there any role at all for government when it comes to regulating Bitcoin?
Gallippi: It’s going to be hard to regulate anything that is peer to peer, no matter what it is, like file-sharing music. Anything that’s peer to peer, how can the government regulate that? And Bitcoin is open source. How do you regulate something that’s open source, that anyone can use? The only way they could regulate it is at the exchange. If you want to buy in or cash out over a certain dollar level, you need an ID. It’s the same with casinos.
CoinDesk: What will it take before Bitcoin can become truly mainstream?
Gallippi: It’s going to take a while. It’s just going to take time. Bitcoin has already been around for four years. Email was around for 10 years before it took off. The software itself needs a lot of engineering work to be more usable, and they need more services: more exchanges, more wallets, more ways for people to get in and get started easily.