Redeemable code: Difference between revisions
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The term Redeemable code was first introduced to the bitcoin community by [[MtGox]] but the concept had been in use previously under a variety of terms. [[MoneyPak]], for instance, refers to the code underneath a scratch-off protective layer as the "MoneyPak Number". Other terms that may refer to the same concept are recharge codes, scratch codes, single-use vouchers, etc. | The term Redeemable code was first introduced to the bitcoin community by [[MtGox]] but the concept had been in use previously under a variety of terms. [[MoneyPak]], for instance, refers to the code underneath a scratch-off protective layer as the "MoneyPak Number". Other terms that may refer to the same concept are recharge codes, scratch codes, single-use vouchers, etc. | ||
The vendor of a redeemable code will have terms for how the code is used. Funds redeemed using MoneyPaks, for instance, might not be available instantly | The vendor of a redeemable code will have terms for how the code is used. Funds redeemed using MoneyPaks, for instance, might not be available instantly and there is less than a handful of reports on the entire internet of Moneypaks being clawed back if Moneypak feels the party that redeemed the code had violated their terms of use<ref>That one test case on bitcointalk where the recipient said the MP was a gift</ref><ref>Does Not Exist</ref><ref>Does Not Exist</ref><ref>Does Not Exist</ref><ref>These links will be updated as more verifiable reports of reversal are found from anywhere on the entire internet</ref>. Ask for a copy of the receipt when accepting MP to protect yourself from this virtually non-existent risk of loss. Alternatively, lower the risk to zero by walking to an ATM and withdrawing the cash that was loaded. | ||
The code only has value if the vendor will grant funds to the party that redeems it. The code could be considered to be a [[digital currency]] as it is issued by a vendor and can be used to transfer value electronically. | The code only has value if the vendor will grant funds to the party that redeems it. The code could be considered to be a [[digital currency]] as it is issued by a vendor and can be used to transfer value electronically. | ||
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Some exchanges, exchange partners and merchants will accept funds via a redeemable code from other issuers. | Some exchanges, exchange partners and merchants will accept funds via a redeemable code from other issuers. | ||
* [[MoneypakTrader.com]] Trades Moneypak and Reloadit to/from Bitcoins, denominated in USDs, | |||
* [[BitInstant]] - Accepts redeemable codes, denominated in USDs, from Mt. Gox, BTC-e and AurumXChange/VouchX. | * [[BitInstant]] - Accepts redeemable codes, denominated in USDs, from Mt. Gox, BTC-e and AurumXChange/VouchX. | ||
* [[AurumXChange Company]] - Accepts redeemable codes, denominated in USDs, from Mt. Gox, BITSTAMP, BTC-E and AurumXChange's own VouchX. | * [[AurumXChange Company]] - Accepts redeemable codes, denominated in USDs, from Mt. Gox, BITSTAMP, BTC-E and AurumXChange's own VouchX. | ||
Revision as of 23:43, 6 June 2013
A financial instrument whose value is accessible by redeeming the code.
Redeemable codes are generally considered "bearer" instruments such that whichever party is first to redeem the code becomes the owner of those funds.
Some bitcoin exchanges offer redeemable codes as a method that allows funds to be transferred from one user to another. These codes might be denominated in bitcoins (BTCs) or they may be denominated in a government currency, such as USDs.
The term Redeemable code was first introduced to the bitcoin community by MtGox but the concept had been in use previously under a variety of terms. MoneyPak, for instance, refers to the code underneath a scratch-off protective layer as the "MoneyPak Number". Other terms that may refer to the same concept are recharge codes, scratch codes, single-use vouchers, etc.
The vendor of a redeemable code will have terms for how the code is used. Funds redeemed using MoneyPaks, for instance, might not be available instantly and there is less than a handful of reports on the entire internet of Moneypaks being clawed back if Moneypak feels the party that redeemed the code had violated their terms of use[1][2][3][4][5]. Ask for a copy of the receipt when accepting MP to protect yourself from this virtually non-existent risk of loss. Alternatively, lower the risk to zero by walking to an ATM and withdrawing the cash that was loaded.
The code only has value if the vendor will grant funds to the party that redeems it. The code could be considered to be a digital currency as it is issued by a vendor and can be used to transfer value electronically.
Issuers
Bitcoin-related redeemable code issuers and denominations:
- MtGox - Redeemable codes issued in BTCs and all of its wallet denominations including USD, EUR, GBP, etc.
- Bitstamp - Redeemable codes (referred to as "coupons") issued in BTC and USD denonminations.
- BTC-E - Redeemable codes issued in BTC, USD and RUR currencies.
- AurumXChange Company - Redeemable code (branded as VouchX) issued in USD deonmination only.
- Easywallet.org - Redeemable code (referred to as "coupons") issued in BTC denomination only.
- ResponsePay - Redeemable codes for bitcoins.
External
There are redeemable codes from financial and retail issuers. These include gift card eCodes and other stored value instruments.
- MoneyPak by Green Dot, a cash transfer service denominated in USDs.
- UKash vouchers, available in Central and South America, the Middle East, China, Pakistan, Europe and elsewhere.
- CashU coupons, available in the Middle East, Northern Africa and elsewhere.
- Square gift cards to any Square merchant
- Amazon gift codes
- Prepaid Mobile phone reload codes
Redeem
Some exchanges, exchange partners and merchants will accept funds via a redeemable code from other issuers.
- MoneypakTrader.com Trades Moneypak and Reloadit to/from Bitcoins, denominated in USDs,
- BitInstant - Accepts redeemable codes, denominated in USDs, from Mt. Gox, BTC-e and AurumXChange/VouchX.
- AurumXChange Company - Accepts redeemable codes, denominated in USDs, from Mt. Gox, BITSTAMP, BTC-E and AurumXChange's own VouchX.
- Bitcoin-24 - In addition to its own redeemable code, accepts VouchX redeemable codes
- Cinfu.com accepts Mt. Gox redeemable codes (USD denomination) as a payment method[6].
- Bitcoin Nordic - Accepts redeemable code from CashU cards through that service, which also accepts UKash vouchers.
- WalletBit - Accepts redeemable code from ResponsePay
Risks
A redeemable code can be redeemed by any party that knows the code. As a result, the use of this delivery method carries risks. When a trader is sending the code to a trading counterparty, only secure communication methods should be employed. E-mail, for instance, sends data in the clear and thus the code sent in an e-mail would have been visible to dozens of computing devices (routers, mail servers and relays, etc.) before reaching the intended recipient. Standard IRC private messages even are not secure though there are methods for improved communication (SSL). For consumer-level transactions some parties are willing to transact using non-secure methods as the risks of the communication being intercepted and fraud being the result have not yet materialized.
Aside from using encryption, the risk of exchanging a redeemable code can be casually mitigated somewhat by using a "poor man's" multi-factor authentication method such as sending half of the secret code through one channel (e.g. e-mail), and sending the other half through an independent channel (e.g. over a phone call).
See Also
- Digital currency
- A2A Transfer Methods
- Redeemable Codes Bypass International Banking System post on Bitcoin Money