AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Mon Mar 25 2013 22:51:16

How PayPal Almost Liberated Cyprus

By: Brian Cohen

Sponsored Link

If you think PayPal holds are a real bummer, just imagine how the people of Cyprus must feel. Gerald Celente of the Trends Research Institute had been warning of "Economic Marshal Law" and a "Banking Holiday" such as that seen over in Cyprus this past week. The Cyprus government isn't just going to put holds on depositors money...they aren't going to give it back in many cases.

But believe it or not, the brains behind the PayPal Hold could have been the same ones to liberate the people of Cyprus. PayPal's original vision was to avert this type of crisis from shocking depositors of local currencies around the globe.

Eric M. Jackson's book "The Paypal Wars" published in 2004 describes how the PayPal option could have played out:

"In the future, when we make our service available outside the U.S. and as Internet penetration continues to expand to all economic tiers of people, PayPal will give citizens worldwide more direct control over their currencies than they ever had before. It will be nearly impossible for corrupt governments to steal wealth from their people through their old means because if they try the people will switch to dollars or Pounds or Yen, in effect dumping the worthless local currency for something more secure... It was this potential that made Confinity's (PayPal's) vision of "world domination" which might have been more appropriately called "world liberation"-all the more credible. ... Whenever this scenario played out, the citizens of these countries especially the poor and middle class, who seldom had access to offshore banking options were always hit the hardest. If PayPal could find a way to empower these people to move and transfer money with the click of a mouse, then we would indeed be on the verge of creating something far more revolutionary than just a new way to split up dinner bills."

Although PayPal has been an option for Cyprus, there has been little if any public discourse or press on the "PayPal Option." Though one Twitter user located in Ireland did seem to be able to make Cyprus money transfer using PayPal:

Anton Sutton‏ (@anton_sutton)
#cyprus bail hack: you can still transfer money out of Cyprus using PayPal and your BoCY debit card. Tried it and transaction went through.
5:58 AM - 21 Mar 2013

Another publication from 2004, this time from the International Monetary Fund, explains how PayPal is not a currency: 

"...the new e-money that has been created on the Internet to date is actually government e-money. As an illustration, consider the services provided by PayPal (www.paypal.com). This service enables the user to send a payment to anyone with a PayPal account or an email address. The payments are made in U.S. dollars or in one of the other currencies that PayPal chooses to deal in. While PayPal makes payments using e-money, the e-money is not private. PayPal works through the banking system, because any payment that moves through PayPal must enter and exit PayPal's system either though an electronic bank transfer or through a credit card payment, which is also an electronic bank transfer. Thus, PayPal is conducting e-banking (payment) services using government e-money, not private e-money."

Enter BitCoin

Wikipedia describes BitCoin as "...a decentralized digital currency based on an open-source, peer-to-peer internet protocol. It was introduced by a pseudonymous developer named Satoshi Nakamoto in 2009."

Fast forward to the 2013 Cyprus crisis. All the press has been going to BitCoin with such headlines as "Cyprus Crisis Boosting Unique Currency, the Bitcoin," "Bitcoin ATM To Open in Cyprus," "Spooked by Cyprus, Spaniards Shield Assets in Bitcoin" and "Digital currency value skyrockets in wake of Cyprus crisis."

In particular "Bitcoin: Virtual Currency Enters Real World" from Bloomberg news, which states, "Welcome to the real world, Bitcoin. The U.S. government has officially legitimized the popular crypto-currency and other "virtual currencies" by attempting to regulate them."

Do you have friends or family in Cyprus? Did they use PayPal or BitCoin to help them during this crisis? Let us know below.

About the Author
Brian Cohen has been an active member of the eBay community since May 1998. He currently trades under the member name Bidofthis.com. His first AuctionBytes article was published in May 2002. Brian can be contacted through his website at BidofThis.com where he always has a "little Bid of This and little Bid of That."




Comments (3) | Permalink

Readers Comments

How PayPal Almost Liberated Cyprus   How PayPal Almost Liberated Cyprus

by: Cassie This user has validated their user name.

Tue Mar 26 00:16:17 2013

Yes, can see that especially with issues of monetary valuations exchange rates games. It's not considered the monetary money till determinations are made via mostly things like exchange rates and processing fees are extracted or applied. These delays are minimal versus a major traded commodity such as derivatives - it's still a markets game of angling money transactions. The danger is the speed of light internet it can also if not managed well accelerate at higher rate on false senses of security.

Paypal has it's flaws too -it's dependent upon e-mail accounts how many free e-mails can you create, how do you control money laundering or group hack monetary exchange volumes as normal or irregular when people turn to it in emergency but may hide a more sinister effect further devalue an entire economy!

Sorry this is my wicked little thinking but can it happen maybe is it possible maybe. Sometimes constantly placements of financial training wheels you can never teach anyone to actually ride the two-wheeler on their own??

I'm not but if an Economic Administrator I would fear a market collapse upon aggressive flux e-money trades transactions may devalue the local currency - or plummet it for easy future long term suppressed manipulations via other nations seeking to devalue a market for profit gains. It can have the opposite effect pumping up paypal valuation holdings as a giant pot of gold some one will sit around and hack away at too! Then what?? hmmmmmmm......then who bails out paypal???

The government is taking 10% who would stop a lucrative site bundled up in economic crisis such as paypal being taken 25%, or certain groups, 50% or 100%?? I'm just asking is it possible?

Could one nation play brokerage over another this way too in monetary panic another opportunity of warfare? You have to look at history silver had it's play in Spain's market collapse, hyper inflation in Germany, The stock market crash and the market collapse in Europe during the dark ages instigated the crusades we all know is an excuse to robe wealth accumulated via Centuries Controlled Silk Road...hmm & didn't a British Trading company once controlled India like sweat shop till the British Empire seized control.

Just stepping back it looks like a battle of confidence corporation vs. government with the people caught in the middle on who to turn to and trust. hmmmmm all so interesting very so!

How PayPal Almost Liberated Cyprus   How PayPal Almost Liberated Cyprus

This user has validated their user name. by: Ed Gadfly

Tue Mar 26 11:41:49 2013

If it comes down to PayPal holding your money against the wishes of the European Union or the US IRS, do you believe that PayPal will look out for your interests and guard your money?

That is what is boils down to. Good luck to folks, hope no one gets ripped off.  

How PayPal Almost Liberated Cyprus   How PayPal Almost Liberated Cyprus

This user has validated their user name. by: Bidofthis.com

Thu Mar 28 17:57:35 2013

Canadian Government busget now includes a Cyprus style "bailout" called a  "Bail-In".  "Bak Liabilities" are just another way of Saying "Deposits"  .. Here is the Text from the 2013 Budget Section Chapter 3.2: Helping Manufacturers and Businesses Succeed in the Global Economy

"The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants."



Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.