Bitcoin Forum

A friend sent me this earlier. Worth a read because it contains good advice.


http://www.844bankbtc.com/bitcoin-selling-mistakes/

Most common mistakes of amatuer Bitcoin sellers

Every day amateur bitcoin sellers post on one of the bitcoin forums about how they were trying to sell bitcoin and got scammed. These amateur sellers are commonly known as “windowlickers“. They lose their money, their bitcoin and still consider themselves smart enough to make money with bitcoin. The fact is most sellers lose more money than they make.

Here is the list of the most common mistakes amateurs make.

Selling bitcoin they can’t afford to lose. People often come into the forums talking about how they were scammed and now cannot pay bills. If you can’t afford to pay bills you shouldn’t be trading bitcoins. Even the best traders get scammed so plan to lose money.

Charging to little. Those profits are what keep you in business when prices fluctuate or you get scammed. Lower your prices to undercut your competition and you are cutting your own throat.

Accepting PayPal as a payment method. Yes, some people accept PayPal but they have a ton of experience and know tricks you don’t. If you accept Paypal you will get scammed, you will lose money and Paypal will come after you. Paypal can even take the money back out of your bank account and send you to collections/ruin your credit

Thinking PayPal friends and family is not reversible. Yes, it is reversible. If you search the trading forums you will find many windowlickers that have been scammed trying that. Then when you get scammed Paypal will look into your account. Paypal is smart enough to know that you don’t have hundreds of friends and family around the country sending you thousands of dollars. Your account will be frozen and you won’t be able to withdraw any money for 3-6 months. For the record EVERY form of Paypal payments are reversible.

Believing that anything you can say will help you win a Paypal dispute. Paypal doesn’t care what windowlickers say. The guarantee the buyers will be safe, not the sellers (it is in the Paypal terms that they don’t protect people selling bitcoin or other “digital goods and intagible items”) If the windowlickers were smart enough to win their dispute they wouldn’t have been accepting Paypal in the first place.
Taking Venmo/Skrill/Neteller. These suffer the same chargeback issues as Paypal but at a MUCH higher rate because they are even more infested with scammers than Paypal is.

Believing a website/forum can help and/or protect them.  Websites like LocalBitcoins and Paxful do what they can but they are understaffed and their primary concern is making money, not settling disputes or answering support tickets. The forums are full of other people just as clueless as you that have no power over the website. Understand you are on your own and expect 2-5 business days for a reply from support. Be prepared that the replies you get may not actually help you.

Believing reload cards like gift cards or reload cards are safe. They can be reversed and scammers do it all the time. Paypal MyCash cards and Amazon are the worst. There are also a lot of scams that will get your accounts shut down after the card has been loaded, you banned and a mark on your credit. Any money stored in the account will be locked and you will never see it again.

Trying to get cash off of reloadable or prepaid cards. Reloadable and prepaid cards are made to put cash on and then spend like a credit card. The way the card companies see it is that only idiots and money launderers try to put cash in and then take cash back out. This is one of the more common mistakes of an amateur and often causes accounts to be banned.

Releasing bitcoins without cash/payment being fully in your possession. Remember, most consumer based payment methods can be reversed.

Selling out of escrow. Hopefully you don’t really need an explanation why this is stupid.

Giving out personal information like bank account numbers or their phone number. There are tons of scams that use these. The professional sellers that do give this information out have safety features on their accounts to protect them.

Believing cash deposits are safe –  There are a number of scams that target bank accounts. These often end up with the police investigating the owner of the account and the bank’s banning the owner from their system (regardless of who is at fault).

Accepting credit cards. These are the easiest scammed of all because credit cards automatically default for the owner of the card and its up to the retailer/seller to prove that the purchase was one the card company approves of.

Believing that if a seller requires a photo ID they will be protected. Photo IDs that will fool police are easily bought online. Even if it is a real ID, most services do not care when they find out that the transaction involved bitcoin and will chargeback against the seller.

so to sum it up one could simply say, that you have to sell bitcoin offline and in an direct exchange for cash or goods? online it only makes sense as an professional exchange. or did i miss something?

also worth adding
if you dont know enough about someone to slap them with a wet fish should they do you wrong. you might aswell stand in the road and throw mony at people you will never meet ever again.

there is only certain things to reduce risk of people wronging you (staying away from reversible payments) but even then its best to be able to know you can slap then when/if they do

Does highlight most of the points. Would have probably been better to post this over at the Trading Discussion. As for the localbitcoins point, usually the replies and disputes are settled within a day. One thing you can do as a beginner to avoid disputes is to trade with people who have had previous trades on there.

I believe in reverse.If you want to be safe,always use good reputed exchange for most of them have all required info about both buyer and sellers and you can contact them and ask for help in case you get scammed

i think the point of the localbitcoins is to not think of it as a business with 100 customer service staff with a policy to answer calls in 5 minutes.
local bitcoins is a skeleton crew (like most bitcoin businesses) and to expect a few days reply but be extremely happy to get resolved in a day.
rather then saying expect it in a day and get frustrated if a few days. EG dont over promise and under deliver.. under promise and over deliver

Find it worth reading, actually dealing with reversible payment methods are very risky for bitcoin related exchange. Whether you go with paypal, skrill, credit cards all are subjected to high risk specially in case of bitcoin sellers, buyers may chargeback and also run away with bitcoin which is hard to track or can't be reversed.

From that reading, it seems that the only way to deal is to deal with cash during Face 2 Face meetups. In fact, all forms of electronic payments are reversible, why is it so rampant in the bitcoin world?

I could also buy a 2nd hand camera from eBay, receive the goods and I deny I received the goods and I file a charge back since delivery confirmations are useless?

Why don't you guys use bithalo? www.bithalo.org
Double deposit escrow would solve almost everything mentioned here. If crooks can't profit, they will look elsewhere.



Heck David Zimbeck (the developer) has also come up with an interesting way to give bitcoin more anonymity because bithalo's 'engine' runs off bitmessage. Bitmessage is arguably more anonymous than Tor.
By sending a transaction through a bitmessage channel it makes it extremely hard to know the IP address that sent it because random bitmessage nodes broadcast the transaction for you!

Very much precise but i am quite confused on the number 11 on the list i supposed that this one is all about selling bitcoin without having an escrow right? well im  sorry i just want to clear my minds out

I don't understand how that works. How popular is this service? Although they are many great breakthroughs and solid ideas in crypto, it is often the publicity and marketing aspect that failed.

There will be scammers on every platform, not just with Bitcoin. We live in a world where people want to take shortcuts to get money.

They would spend hours trying to think of creative ways to scam hard working people out of their money. The worst of these are the

people using charities to do this. I once seen a women walking around with a dead child, trying to get sympathy from tourist and begging

for money in Africa. The child was not even her own... just a object to get people's pity for them to open their wallets.  :o

The most common mistake of the amatuer Bitcoin seller is to sell in the first place.  Just buy and hold and wait for the world to adpat to crypto folks.

That is disgusting to say the least and that woman should be put to jail at least for eternity with such gesture. A truly monstrous gesture. By the way why are the money needed for the dead child in the first place ?

Scammers cannot be stopped and there will always be people who will fall for their tricks unfortunately. Personally I sell bitcoin lower than 1:1 rate at Bitpanda but at least I am sure I will not get scammed.

Bitcoin sellers should read more about bitcoin, and read all the stickies in the Currency Exchange and Digital Goods section to lower drastically their chances of making errors. Not much other than this can be done.

I agree that trying to sell bitcoins when you have no experience is really naive, but i think window licker as you put it is abit harsh

yeah, it is better to hold your bitcoins in the exchanges that have only good reputation so you dont lose it

So from the another users suggestion above me keep your bitcoin in the pouch of the people is those you don't know about that. but if you have a more time and MOVE it into your personal cold storage.

I`ve never heard the bitcoin noobs are called "windowlickers".Interesting...

You critisize every possible way of trading bitcoins.

There`s no 100% safe way to trade btc,we all know that.

Can you suggest any 100% secure alternative of buying and selling bitcoins?

At one point you simply have to trust a method such as exchanges (don't leave the coins there) or it will be impossible to buy bitcoins. There is no trustless service, but the risk can be minimized by using reputable services.

I am perfectly fine to pay a higher % fee for the ease of fast buying/selling, without leaving the house and without having to bother checking my bank account/paypal/whatever to see if the money is (still) there. Services charge a fee to make it easier for you and this should be embraced imo.

I think Localbitcoins is safe enough even when selling Bitcoin for PayPal, you just need to check the track record of the buyer. There are plenty of buyers who've been on there for a long time and have 100% positive feedback from 1000+ trades. Sure that doesn't guarantee they won't scam you but it certainly helps. And if you're looking to sell a big amount of Bitcoins, you might consider selling in smaller chunks to several top buyers instead of the whole thing to just one buyer.

The safest transfer method seem to be LBC with direct inter bank transfer. There is no way refund or chargeback could be made this way.

Just don't dealing with reversible payment method like paypal or others, i might agree with you that the wire transfer is a good option however the bank transfer has high fee especially for the international transaction, the alternative is open the localbitcoin, and find the seller on your area then pay with the cash, that's it

I believe there is a reason why it is called Localbitcoins. :) It is meant for domestic regional dealings. Assuming the fund transfer is internal and domestic, the fees should be minimal. I refrain from international wire transfers because the fees are a deterrent.

But the even safest method is buying with cash if you can find a seller in your place. If you don't know the person, then it is not advisable to receive funds from an unknown person because we don't know the source of those funds. I one time did a cash transaction and it went very smooth without any issue.

As long as there is a banking trail and you keep a log book of your sales, it should cover yourself? I am not a legal expert here - can anyone clarify? :)

I do not know understand why BTC sales is such a hassle. I am aware of the legitimate concerns of money laundering. But if a dubious character were to use their dirty money to buy physical goods from Target, Walmart and resell it on eBay to get hard currency, then what is the difference?

I think the most common mistake of amateur bitcoins sellers, they use payment method using reversible services are like paypal,skrill and neteller without escrow service and they usualy sell the bitcoins to users who has not positive feed back, so they was got scam.

i think all the things that were mentioned here are only a simple common sense!

there have always been scammers around the corner to take other people's money and run away. and it doesn't matter if it is bitcoin or it is paypal or even paper money being traded hand to hand, there will always be some people who want to exploit the gullibility of others and make money from it.

so it is always up to the people who are using these services to keep their eyes open, know the risks and benefits and then jump in.
and those who jump in with their eyes close deserve losing money and they have no right for coming to forums and cry about it.

The most common mistake of a amatuer bitcoin seller is that they don't know about escrows or anything and they believe anyone easily without thinking about the risk involved with it that is the reason they mostly get scammed because only a few people don't scam people without escrow.

I agreed with your points, anybody that is going to transact with anybody must enforce the use of Escrow service

Agree! Escrow services ! You should do escrow if you have to transact big amount of bitcoin and i think also low but i do prefer big because it will be a lot lost if you will be scam but in low sort of nothing happen :D

I thought of a scenario when I was taking my dinner earlier -

What if the seller and the escrow are the same person (but login using 2 different accounts)?
or
What if the buyer and the escrow are the same person (but login using 2 different accounts)?

People do it every day, and ebay encourages it.  Ebay works for the buyer, and Paypal works for ebay. 

If a buyer says he didn't receive the item, Ebay refunds him the full price plus shipping.  Then Paypal takes the money from your bank account, even if it leaves you with a negative balance.  There is nothing you can do about it, and they don't care.

What is this world becoming? How prevalent are these practices? Are stories to share?

Then why are people still with Paypal? But this will lead to the next question - Bitcoin is a good alternative and it protects the seller but it puts buyer at disadvantage.

When you are on Paypal/Ebay - The seller is disadvantaged
When you use Bitcoins - The buyer is disadvantaged

What is the balance?

But there are a couple of hardcore Crypto sellers on eBay who are still surviving strongly with hundreds of positive reviews. How do they survive?

Bank is indeed probably the safest but the drawback is the fee you'll need to pay to receive the money, usually between $15 - $30 depending on the bank. Also, you have to wait for at least a few hours for the money to become available, sometimes longer while PayPal is pretty much instantaneous. For big amounts though, it's definitely worth it to pay the fees and get the money sent directly to your bank account.

It is possible, but what reputation will this Escrow have in the community, if he or she scams people? The only way this will work is if this person are busy with a long Con, where they build trust and wait for the whale, and then jump with the mother load.

Most of these people would make enough money from the Escrow service, if they have build enough trust for them not to have to scam people. ^smile^

Escrow services scamming people is not so unheard of and it has actually happened before with big escrow people here on this forum too!

and the solution for that is also easy too when using bitcoin.
you can simply use multi signature bitcoin addresses for example addresses with 2 out of 3 signature that each party has access to only one key and then spending it would require at least two party signing.

The most common mistake is people selling BTC to people who aren't reputable and they don't use escrow and then they get burned

There are allot of people who dont know what to do with their bitcoins so they are making big mistakes and that causes allot of trouble because the bitcoin is worth allot of money and you dont want to lose that.

And so if they're not known for what to do with their bitcoin and where from they can get the bitcoin?and know about bitcoin?

   Good advice for new members like I am. I still didn`t have opportunity to sell bitcoins I collected. I`m concentrated on saving, and that will remain like that for next couple months.
   I`m very careful with my bitcoins, I needed a lot of time to collect them, many captcha`s solved, many hours invested in that. Before any sale I will double check everything, I will remind what OP said and some other members.
   It`s better to see where others made a mistake, and try to not make the same mistake. Thanks for all this comments, this means a lot for new members here!

Reputable members are hard to come by since they can sell their accounts in this forum.

We need the stars to be aligned and luck and pray that trade goes smoothly

The most common mistake of amateur Bitcoin sellers is selling Bitcoin. That's why they are called amateurs. :D Professionals hodl their Bitcoin and will never sell them for fraudulent fiat money crap...

Many of the mistakes listed are not specific for Bitcoin, these are general mistakes of people with a lack of business/trading experience. Besides that, people using Paypal deserve to be scammed, since Paypal's "service" is tuned for exploitation (financially and privacy-related) of its users. It's the exact opposite of what Bitcoin stands for. So a former Bitcoin-user that uses Paypal to "cash out" (= buying debt-burdened fiat currency) is showing that he/she did not understand anything about Bitcoin.

ya.ya.yo!

it isnt seller, but imo the most common mistake of amateur bitcoin owner is cloud mining... they all fall for these ponzis. and believe or not, a few get scammed more than once with this same scheme.
"fool me once, shame on you. Fool me twice, shame on me"

Both the child and the woman should have been aborted long before the scam took place.  Me, I don't pity dead children any.  They're much better off than the rest of us.

Accepting paypal or other reversible forms of payment would be the commonest ones.
Sometimes, people just don't learn from the mistakes other people make.

I have also seen few sellers sending bitcoin to wrong buyer address which can be because not checking bitcoin address twice before sending bitcoin. Other common mistake may be accepting paypal as payment method and when buyer charges back paypal refund the buyers and sellers left with nothing.

I have read some post in this forum like escrow has cheated the seller or the buyer. so really we are in a world with scammers all around. so only few digging about the other end person and commonsense would prevent getting scammed.

Even after being so cautious more get scammed because there are more talented scammers than genuine persons

I have seen sellers in LBC (very experienced ones) who are willing to sell their coins for Paypal. But the premium was extremely high. When normal traders were charging a maximum markup of 5%, these guys were charging up to 25%. But still, they may be having some technique to prevent fraud. Else, how can their trade be profitable?

You wouldn't catch me selling Bitcoin via any other avenue than a reputable one, not that I've ever sold any anyway. You'd have to be a tad certifiable to be dealing with the average internet moron who's not going to blink about taking your money away. Far too much risk for a piffling premium.

People dont take bitcoin serious, isnt possible to me to undersntand and believe at this stage around bitcoin people still loosing their bitcoins to scammers, stop invest into hyip and ponzis, and well im not selling my coins i made it once and i regret those, now i collect and invest, soo for sure its a mistake to sell, as long you dont know whith you are dealing.

Well, someone rightly said " Learn from other's mistakes, because if you learn from your own mistakes, your life will be short " so if people see others making mistake then they must learn from that. I think the most common mistake newbies or amateur sellers do is accept reversible payment for BTC.

that was a good read although some of it is exagerated. I know plenty of people
who started trading and because they were safe they never lost a cent.

I do love the reference "windowlickers" lol that's classic and will be using that one
myself.

We can't deny that accepting reversible payments are common because most of the people are using it. And they don't have choice but to adopt it and use by means of it.

But learning from the mistakes of others is still not enough in able for you to learn from it, always remember that experience is the best teacher.

So I guess there are still sellers that are not going to learn from the mistakes of others as long as they are not experiencing it.

Try to use your little insect brain bryant.
What do you think the 25% fee is for?  :-[


Ah nvm he is sig spamming for betcoin.ag now :D

Selling bitcoin or receiving bitcoin for goods is just like a cash transaction on craigslist. You don't want to get scammed, but much unlike a cash transaction, you can't bring a weapon. That of course you try hard to DOX the user or trace him. Handle it with a grain of salt and expect losses if you are playing loosely.

But charging 25% fee is not relevant to the fact that there is still a charge back risk. There's no correlation. I am getting sleepy and do not see the link yet. Please enlighten me. :)