In the light of recent events (see TorrentFreak news), as PayPal banned at least 3 major DNS Unblocker / VPN services, it’s safe to assume that this is only the beginning and the blocking stance will affect more unblocking and VPN services. And we don’t believe that it will be only PayPal to stop processing payments for such services, but also the duopoly formed by Visa and Mastercard by forcing payment processors to adhere to their requirements. It is common knowledge that these three services are the most widely used online payment methods, arguably handling over 80% of payment transactions for virtually any online service, including VPNs.
We asked 3 VPN services and they’ve confirmed our estimation – give or take 5%. An enormous percentage as it is.
Paying for a VPN service using “conventional” methods is bad
– It is bad for you: If privacy is a reason why you choose a VPN, then you shouldn’t use a payment method that would easily identify you. Your transactions history with PayPal and credit cards are stored virtually forever and shared among parties such as banks, governments, tax authorities, 3rd party payment processors and so on. Those transactions will be disclosed to anyone who’s just a bit more empowered to ask for them than the regular Joe.
– It is bad for the VPN company: you’re lowering their profits considerably as they have to pay high transactions fees. Secondly, and most importantly, you’re forcing them to depend financially on payment processors that can simply cut off their income for whatever reason they like, especially under the pressure of lobbyists and governments. The VPN companies, just like any business in the world, need money to operate. They have expenses: employees, hosting contracts, hardware, software development, research. All those aren’t paid with money growing in trees. They’re paid with your money. How else are they going to stay in business if your money won’t reach them, in the first place?
Why you should use Bitcoin (and other crypto currencies) to pay for a VPN
– It is decentralized and can’t be shut down by governments, banks, financial institutions or any other kind of corporations.
– Transactions benefit from a very high level of privacy and even full anonymity in some cases. This means that you can pay for an online service, like a VPN, and nobody would be able to track down the transaction to you.
– It is fast. Transactions are completed almost instantly.
– It is secure. If you follow best practices on how to store the bitcoins, use only secure wallets, then it will be orders of magnitude safer than using PayPal which is as secure as your email account or a credit card. Every year there are millions of credit cards stolen from websites that store them. Paying by credit card is arguably the most insecure method to pay online.
– Almost 0 commissions for transfers. This allows you to transfer funds between your bitcoin wallets without paying high percentage fees on transactions. When you pay for a service, the service itself won’t be charged a high fee for the transaction.
– Bitcoin is used by criminals because transactions are very hard to be tracked.
In some cases, yes. But the same applies to any other payment methods. Cash for example, which is being used by drug traffickers, money launderers, terrorist organizations and virtually anyone who is into illegal stuff.
– It is hard to buy bitcoins.
There are several reputable online services where you can buy bitcoins easily, such as Coinbase, Bitstamp, Kraken. There are also thousands of ATM machines around the world where you can purchase bitcoin instantly. In some countries, you can find them at any street corner. This site should help finding ATMs in your location: Bitcoin ATM Map. Note that not all ATMs are listed. You should check when you visit your local hyper-market if the BTC logo is listed on the existing ATMs. It is also possible to purchase bitcoin from sellers personally, using LocalBitcoins and Mycellium wallet.
– Wallet services are often hacked.
It’s been the case with some, like MTGox being the biggest one. Following their hacks, several more secure wallet services became available. As long as you don’t keep a huge amount of money in your online wallet, there’s not much to worry about. Also, you can use a local wallet on your computer instead of relying on 3rd parties. Banks and e-commerce websites are hacked on a regular basis and there’s been hundreds of millions of credit cards stolen every single year.
– You can lose money because of high volatility.
If you use bitcoin to store a lot of money, it might be a problem. But it is a double-edged sword, as volatility may as well help making a nice profit. In this article we are focusing on using bitcoin as a payment method, not as a highly speculative “investment”. That is a totally different topic.
A VPN is not illegal
Contrary to what the lobbyists and copyright cartels want you to believe, a VPN is not some safe-haven for online criminals. VPNs are mostly used to secure connections against unwanted and unauthorized parties. In civilized and democratic countries, those 3rd parties are the criminals in the first place. A VPN helps reaching censored content. And now think about those countries where one could go to jail for reading some article on Wikipedia or for posting a comment online. And we aren’t referring to hate speech, bullying, terrorism threats and such. Say, just a simple comment that is considered a threat or unwanted by an oppressive regime. People have been killed for expressing their opinions online.
Banning a VPN service for “facilitating copyright infringement” is also wrong. Hard drives, SSDs, flash-drives are used to store copyright infringement content and you don’t see any payment processor or online shop banning storage devices sales.
Privacy is a human right and in these times, when mass-surveillance is common in many countries, therefore a VPN helps assuring that your privacy is protected against malicious actors.
As a final word, we reiterate the need to stop using PayPal and credit cards to pay for VPN services. If you aren’t already familiar with bitcoin and other crypto-currencies, it’s time to learn more and give them a try. Some great resources on how to get started can be found at bitcoin.org. We also recommend to check the Reddit Bitcoin community.