Paypal ditched in favor of bitcoin

Seafile has announced that they will ditch Paypal payments and instead turn to bitcoin. This is an interesting decision with an even more interesting rationale and implication.

In 2013, Seafile emerged as a business-oriented cloud-based storage solution, with a different approach. They provided their customized storage solutions within a company’s previously existing private cloud. The service then enables customization of workspaces in a variety of different configurations to allow companies, teams, or individuals to curate access to applicable files.

Recently, they had a spat with Paypal.

The Questionnaire

What Seafile lacks in size it makes up for in its commitment to privacy. Apparently, Paypal issued a questionnaire to the group in an effort tp better understand their business. Not only was the document bizarrely general, it also utilized some interesting lines of questioning. Seafile felt that the implications [PDF] of some of Paypal’s questions were too intrusive, considering that, as a file storing service privacy should reign above all. Nonetheless, the folks at Seafile filled out the questionnaire to the best of their ability and returned it to Paypal. Until this point, Seafile was using Paypal as their main payment processor.

The Result

Upon inspecting the returned document Paypal apparently felt that some of the answers provided were not sufficient. As a result, they blocked Seafile from using their services. Faced with the outage the group was forced to pursue other means of payment processing. They turned to the group Bitpay and resumed service now accepting bitcoin as a method of payment.

A Deeper Dive

Yes, it is interesting that Seafile has chosen to accept bitcoin. And yes it is interesting that Paypal dropped the service for what, speculatively, were the unacceptable answers that Seafile provided. (Most of which are related to the treatment of customer’s files.) But perhaps the most interesting notion behind the dust-up is privacy.

Seafile addressed the rather specific questions from Paypal in a way that was commensurate with their mission of privacy. Perhaps that was not good enough. As a result, and as mentioned in an updated blog post from Seafile, they turned to a payment method and service provider that they felt could offer consistency….and although not specifically stated, privacy. That is the divide.

Privacy should be viewed as a static term. Your definition should not differ from Paypal’s. In this instance, the privacy provider (Seafile), did not agree with THIER system enabler (Paypal). Every party in the service loop should agree regarding privacy. This concept is so very important to solidify as these systems continue to grow quickly. The implication for privacy is immense.

And just like that, the rise of trustless systems continues.