Bitcoin Insanity: New Convenience Service Offers Bitcoin for Credit Card and PayPal

By
Gordon Hall
April 11, 2014

What is Bitcoin Insanity?

Bitcoin Insanity is a brand new service offering fast sales of Bitcoin for PayPal, major credit cards (Visa, Mastercard and Amex), bank wire or cashier’s check.

PayPal or credit cards are indisputably the easiest method for non-Bitcoiners to make purchases over the net, yet seldom offered as options.

Why is Bitcoin Insanity?

Beginners looking to buy their all-important first bitcoins experience a degree of friction, even resistance, from their usual options:

  • exchange registration requires a long wait for identity verification procedures and the stately transferal of funds by banks,
  • secure online purchase frequently involves escrow, an unfamiliar concept to many which can leads to confusion, or
  • physical meet-ups for cash purchase, which are often inconvenient due to scheduling or geographic reasons.

Bitcoin Insanity makes things a lot easier on newcomers. As long as they’ve downloaded and synced up a wallet (Multibit or Blockchain are recommended for newcomers by the Bitcoin Insanity site), they can buy small volumes using familiar methods. Of course, nothing stops an experienced Bitcoin user from using the service for quick wallet top-ups or sending Bitcoin tips / gifts.

Price and Volume

Quoting the site here, at a current exchange rate of  roughly $380 per Bitcoin:

22mBTC or ฿0.02 – $10.00

33mBTC or ฿0.03 – $15.00

45mBTC or ฿0.042 $20.00

57mBTC or ฿0.053 – $25.00

Bitcoin Insanity’s convenience does come at a cost but not an excessive one. These prices are regularly adjusted to match Bitcoin, all price updates are announced over the service’s Twitter feed.

Discount coupons up to 15% off have been announced on their Twitter, so bargain hunters should follow it closely.

During EST business hours, Bitcoin Insanity aims to process orders in under an hour.

Why Such Payment Methods Are Rare

As mentioned, cards and especially PayPal are seldom used to buy bitcoins. This is because they allow chargebacks, something which does not play well with Bitcoin’s irreversible nature. Put plainly, banks will reverse payments made to seller’s accounts if buyers allege some breach of contract. This leads to fraud risks for sellers, who have no way to disprove such allegations (unless some improbably progressive bank has quietly established a blockchain forensic department).

Bitcoin Insanity manually process payments after they pass through the PayPal or Mijireh checkout, leveraging their fraud detection routines and financial partnerships to minimize their risk. At this time, purchases are also limited to one per customer per day. Their somewhat higher price is necessary to offset the occasional loss to fraud and the staff costs of manual processing.

Bitcoin Insanity’s Competition

In America, BitQuick will match Bitcoin sellers with anyone willing to deposit with CO-OP Credit Union, Wells Fargo or Bank of America.This method does require you to physically visit a branch location and obtain a deposit slip.

In Europe, BitQuick offers a similar service through SEPA transfers.

In Taiwan, BitQuick.tw offers the bank deposit or transfer purchase method for buyers. In India, BitQuick.in offers the bank deposit, NEFT/RTGS and IMPS methods.

I’ve used BitQuick several times in the past to accept payment from an American client. Transaction within banking / business hours and traffic-time to a local branch were slight drawbacks on the client side, easily offset by a discounted rate for Bitcoin payment. Minor snags in the BitQuick process were always dealt with by their support in a timely and effective manner.

Bit-Tastic is another service offering purchase of Bitcoin for debit or credit card (Visa, Mastercard and Amex). They promise settlement with 2 days and limit purchases to $30.

Last modified (UTC): May 18, 2014 13:24

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