Bitcoil - Exchange bitcoins for ILS

[Meni Rosenfeld]

I have started a new service, Bitcoil. If you have an Israel bank account, I will buy and sell bitcoins for Israeli New Shekels. Payment is done by bank transfers.

For now, orders are processed manually and placed by sending me an email.

Taking into account the fees involved in exchanging ILS and USD, required for most other methods of buying and selling bitcoins, I believe my service is the cheapest way for Israelis to exchange bitcoins for amounts of >100 ILS. Please let me know if you think I'm wrong.

Questions and comments, and of course using the service, are all welcome.

[ADgordo]

יש ישראלים שמשתמשים ב-ביטקוין?

אחלה סבבה

[Meni Rosenfeld]

יש ישראלים שמשתמשים ב-ביטקוין?

אחלה סבבה

Not too many, but there are.
Anyway, I think conversing in foreign languages is supposed to be confined to the "Local" section of the forum.

[yomi]

Nice.

I am thinking of starting something like this and I am curious on how you would handle de delay when receiving funds.

If someone sends the order for buying BTC today and you receive the bank transfer tomorrow, what price will you honor?

Thanks!

[Meni Rosenfeld]

Nice.

I am thinking of starting something like this and I am curious on how you would handle de delay when receiving funds.

If someone sends the order for buying BTC today and you receive the bank transfer tomorrow, what price will you honor?

Thanks!

I go by the price at the time I log in to my bank account and see that a transfer has taken place. This spares me the need to have a system to keep track of the price at the time of placing the order. It also protects me from some kinds of fraud.

[Mahkul]

Holy-Fire didn't know you're from Israel. Cool!

שלום חבר

My Hebrew is very rusty, took me 20 secs to actually type this.

[Meni Rosenfeld]

Holy-Fire didn't know you're from Israel. Cool!
שלום חבר
My Hebrew is very rusty, took me 20 secs to actually type this.

You do now.

[Meni Rosenfeld]

With the recent issues with The Madhatter, I feel that I ought to say a few words about my own risk management strategies and trustworthiness. This also seems like a good opportunity to provide a general status update.

Things have been going relatively well. I'm still evaluating whether it makes sense to me to continue offering this service, and working on formalizing it as a business entity and figuring out the legal aspects.

So far not a single soul requested to sell bitcoins to me. However, demand for buying bitcoins has been very strong, much stronger than I anticipated or prepared for. In fact I'm out of stock as we speak. I am constantly buying on mtgox, but this both increases my cost (which I pass on to customers) and causes delays in supply. I'm working with my bank on streamlining transfers to mtgox, and will try to make transfers more frequent. This also has cost implications, but as I said to mndrix once, having a functioning service trumps minimizing fees. I try to apply the same for my own business. I'm also working on arranging the reserve funds needed for a smooth operation.

I try to build a sustainable business model with fees which, to the best of my estimates, cover any risks I'm taking, as well as incentivize me to continue operating the service honestly. The ideal is that whatever I may stand to gain from abusing my reputation would be dwarfed by my future earnings from maintaining it. If an opportunity to make actual profit by going rogue ever presents itself anyway... Well, I certainly have no intention of taking it. It is well known that otherwise upstanding people can change their ways when facing a large profit opportunity. I'd like to think I am at least resilient to its corruptive power.

I don't typically offer locked exchange rates, for a reason that's mostly technical. I receive payment by bank transfers, and in most cases I have no way of knowing when a transfer order was given. Someone could lock a rate, wait to see changes in the global exchange rate, and back out if it becomes unfavorable. Dealing with this by way of a deposit or payment for a purchase option would be more complicated than I'd like at this point.

If I did offer locked rates, honoring them would be a no-brainer. I'd set aside the agreed upon amount of bitcoins, and for all purposes I have already sold them for a given price, and they now belong to the customer. I'm merely holding them until the payment arrives. Refusing to release them is downright stealing, no different than any vendor stealing the sold merchandise after the sale.

What I do is open rate, I determine the rate at the time I see that I received payment. This is easier technically, but trickier financially. If the rate drops too low my stock could be no longer sufficient for the trade. I do keep a spare to protect against normal fluctuations. But if this happens anyway, I would typically send the bitcoins as they become available (which shouldn't take more than a few days). In the highly unlikely (I hope) catastrophic scenario that the exchange rate crashes, committing me to a large bitcoin payment, and then climbs back up to a level at which I will never be able to purchase the required amount, I will simply send the money back by bank transfer.

[fadisaaida]

I ordered 600 NIS from the site owner. I will update this post to help validate/warn the service

[fadisaaida]

Transaction was smooth , coins received within 24.

[kjhd456]

Honestly, I'm not surprised.
Do you have an exchange fee?

[Meni Rosenfeld]

Honestly, I'm not surprised.
Do you have an exchange fee?

Yes, I have a fixed fee, and my rates embody a certain percentage fee relative to the mtgox rates. Right now I sell with 7% fee and buy with 0% fee.

[Meni Rosenfeld]

I am happy to announce that after a hiatus of more than a month, Bitcoil is back in business, and with a new design courtesy of Crobbo. If you want to buy or sell bitcoins, and have a bank account in Israel, you're welcome to contact me.

However, as much as I would have wanted to say that the legal concerns are all behind us, and it's "warp speed ahead" from now on, in reality Bitcoil is now at best "not illegal". Bitcoin exchanging in Israel seems to be in legal limbo - the activity pattern is prone to be conducive to money laundering, and hence banks frown upon allowing it without a currency exchange license; but it is not legally a currency, in fact it is legally unprecedented, and hence it seems unlikely that such a license would be granted. Until the matter is clarified one way or the other, I'll need to keep a low profile to avoid raising any red flags.

[farfiman]

I am happy to announce that after a hiatus of more than a month, Bitcoil is back in business, and with a new design courtesy of Crobbo. If you want to buy or sell bitcoins, and have a bank account in Israel, you're welcome to contact me.

However, as much as I would have wanted to say that the legal concerns are all behind us, and it's "warp speed ahead" from now on, in reality Bitcoil is now at best "not illegal". Bitcoin exchanging in Israel seems to be in legal limbo - the activity pattern is prone to be conducive to money laundering, and hence banks frown upon allowing it without a currency exchange license; but it is not legally a currency, in fact it is legally unprecedented, and hence it seems unlikely that such a license would be granted. Until the matter is clarified one way or the other, I'll need to keep a low profile to avoid raising any red flags.

Just found your service by accident on google ads ( not exactly low profile...)  ... wish I knew about this before!
If its still up and running we will use your service!

EDIT:  I just noticed you use Tradehill.  The Rate difference between them and MtGox is sometimes very high 5-8%.
Any special reason you use them?

[Meni Rosenfeld]

( not exactly low profile...)

My volume recently has been too low even for "low profile" standards, so I can safely try to reach out a bit. Anyway I'm making a slow but steady progress on the legal front.

google ads

Google ads works great for this, because if someone is in Israel and searches for "Bitcoin" I'm almost 100% certain I have something to offer. Problem is, there isn't much relevant search volume. I did a campaign before to test and now relaunched it indefinitely, so expect to keep seeing those ads...

Just found your service by accident ... wish I knew about this before!

It's in my signature and you've seen me before, do you disable signatures or just don't pay much attention to them? Also my avatar is Bitcoil's logo, symbolizing it is a blue-and-white Bitcoin (exchange) service. It's also in some mandatory places like the wiki. Also appears in organic Google results for "Bitcoin ILS", "Bitcoin Israel" and "ביטקוין".

Anyway, I'm not sure how people miss this service but I know they do, hence the Google ads.

If its still up and running we will use your service!

It is, you're welcome to use it!

EDIT:  I just noticed you use Tradehill.  The Rate difference between them and MtGox is sometimes very high 5-8%.
Any special reason you use them?

That's interesting, whenever I checked I had never noticed such a significant difference. But I checked now and indeed there's some 10% discrepancy (why doesn't anyone arbitrage this? The depth isn't huge but I'm sure they could make a nice profit).

The reason for using Tradehill is that we were supposed to start a partnership (which we've postponed due to legal reasons) and we're amicable regardless of any partnership, so it would make sense to use them for backend trading etc. Now that I see the difference can indeed be significant, and seeing as customers would probably expect an mtgox rate, I'll probably switch to mtg rates.

[farfiman]

It's in my signature and you've seen me before, do you disable signatures or just don't pay much attention to them? Also my avatar is Bitcoil's logo, symbolizing it is a blue-and-white Bitcoin (exchange) service. It's also in some mandatory places like the wiki. Also appears in organic Google results for "Bitcoin ILS", "Bitcoin Israel" and "ביטקוין".

Yeah I guess I don't pay much attention to signatures and such.. they are mostly donation requests or tradehill discounts referrals

[Meni Rosenfeld]

It's in my signature and you've seen me before, do you disable signatures or just don't pay much attention to them? Also my avatar is Bitcoil's logo, symbolizing it is a blue-and-white Bitcoin (exchange) service. It's also in some mandatory places like the wiki. Also appears in organic Google results for "Bitcoin ILS", "Bitcoin Israel" and "ביטקוין".

Yeah I guess I don't pay much attention to signatures and such.. they are mostly donation requests or tradehill discounts referrals

Yeah I have those too . My TH referral code is actually a special partner code which is better (for me) than normal codes. That's moot since nobody has used it in ages, I keep it for now mostly to show support for TH.

[farfiman]

Question. I have a friend  that wants to use your exchange service.
He was scared off  when the price went crazy a few days ago ( up and down)
He is looking for some assurance that if he send you his money , that you wont
charge him some crazy rate that happens for a short period of time.
Is this possible?

[Meni Rosenfeld]

Question. I have a friend  that wants to use your exchange service.
He was scared off  when the price went crazy a few days ago ( up and down)
He is looking for some assurance that if he send you his money , that you wont
charge him some crazy rate that happens for a short period of time.
Is this possible?

It's tricky. There are some ways to do this properly but at this time they are either troublesome legally or too much of a hassle. What I can do is lock the rate when he informs me he sent the funds, even before I receive them, so he doesn't need to worry about future volatility if currently prices are stable (but only when I'm available, so he'll have to contact me about my availability).

[farfiman]

Question. I have a friend  that wants to use your exchange service.
He was scared off  when the price went crazy a few days ago ( up and down)
He is looking for some assurance that if he send you his money , that you wont
charge him some crazy rate that happens for a short period of time.
Is this possible?

It's tricky. There are some ways to do this properly but at this time they are either troublesome legally or too much of a hassle. What I can do is lock the rate when he informs me he sent the funds, even before I receive them, so he doesn't need to worry about future volatility if currently prices are stable (but only when I'm available, so he'll have to contact me about my availability).

Thnx for the quick answer. I'll inform him.  He understands that the btc market is a "bit" crazy and doesn't mind , lets say, 5% either way .  He just doesn't want to find out he got 20% less coins than he expected because of a 2 minute spike in price.