In a move that has astounded the altcoin community, Ebay has added a section for the sale of cryptocurrencies and mining contracts. Astounded, because this represents a complete reversal on policy as it has been enacted.
While this sounds like a great opportunity for the mum and dad investor to sell some coins (especially given the huge markups, for instance bitcoin being listed between $800 to a $1000 per btc, as opposed to current market value that is between $400 to $500) I would urge caution. Don’t be fooled into thinking that accepting the transaction fees on altcoin sales is the same as fully supporting cryptocurrencies.
It should be noted that there are many instances of people who have sold their coins on ebay only to lose both their coins and their paypal balance to fraudulent reversal scams.
The problem is that digital currencies are intangible. So long as a buyer can claim they never received anything, paypal will find in their favour. A work around might be the use of paper wallets sent by registered post, but it has been pointed out that many potential buyers will not feel comfortable with trusting a seller to forget those private keys. Additionally, it is very much like sending money in the mail – there will always be a risk of loss or theft. The larger the value involved, the less you will want to be sending it through the mail.
There is one way to clearly show that a transaction has occurred: the blockchain. A public ledger of transactions should be evidence enough that a person has recieved their coins. However, in practice this is not working out, as u/unclejessesmullet says in the discussion thread on r/bitcoin:
“Yep, happened to me. I sold on ebay several times, it usually worked out OK but on my biggest sale a guy ended up doing a chargeback after I sent the bitcoin. I provided both ebay and paypal with proof from blockchain that I sent the bitcoin to the address he gave me, but ebay and paypal both were completely useless and gave the guy his money back. Adding a category for bitcoin on ebay is just supporting scammers.”
“Believe me, I spent hours trying to get them to understand that a transaction id on the blockchain was like a tracking number, but they didn’t go for it. Why would they? They provide a competing payment network.”
The blockchain is the receipt that sales on eBay need, so why do paypal and eBay not accept it as such? I hate to be cynical, but I think that it is because they simply do not care. So long as they get their cut of the final value fee, they are happy to accept your listing.
The worst mistake you could make would be assuming that this new category in any way represents eBay embracing cryptocurrencies. Seller protection still will not cover you for intangible goods and until there is an updated terms of service that includes intangible goods, you will be exposed to scammers.
It should also be noted that this is the third time eBay has added a crypto category. Each time it has been removed. People are also noting that the use of the term “virtual” currency, which is not standard nomenclature, demonstrates how lightly eBay has looked into this venture.
A lot of the mums I know got their first taste of e-commerce through eBay. It is very easy to set up an ad and do business. So I know a few of you will be tempted to try and sell through eBay, but for now I would have to urge caution. I know I won’t be selling any of my coins through eBay any time soon, but I really hope that one day it becomes possible.
If you could buy and sell coins through eBay, you would have a massive, stable exchange that the average man or woman would feel comfortable using. That could be a massive boost to the use of cryptocurrency! However that day is a long way off – until then, make sure you are always practising good security and if you do choose to sell through eBay consider selling only paper wallets sent via registered post. Remember, it’s not just buyer beware. Sellers must do their due diligence as well.