Bitcoin Forum

I would like to contrast ideas and exchange opinions about this matter.

Regardless of the vehicle used (Craiglist or similar forums/sites, mouth to mouth/social meetings, etc.), let's imagine a situation where we would find an opportunity to sell BTCs for cash, physically (face2face).

We do assume that the buyer has his/her reasons for not doing it him/herself, (not tech-savvy, afraid that bank could freeze account, legal stuff, n00bage factors, etc.), please let's focus in the main question and let's not get into a debate about the reasons.

For this kind of cases where the buyer is open to pay fresh fiat for BTCs, how much you guys consider would be a decent and ethic markup from market price?

Discuss.

Eth.

Ethercoin, you say we assume the buyer has reasons for not wanting a paper trail. We can also assume the seller has reasons for not wanting a paper trail. In this case it would be advantageous for both parties.

Honestly, if someone was paying cash for a large sum of Bitcoins they should be looking at below market. For one bitcoin, I dunno, maybe 5-7% markup tops.

I must qualify this by saying that I have yet to read any responses. The fiat buyer (you are buying fiat with bitcoin when you sell BTC), should charge a premium over an exchange. People that deal with exchanges have all sorts of hidden costs that are not represented in the spot price (trading fees, withdrawal fees, etc). If I had to put a number on an ethical premium for not having to deal with an exchange, having the BTC escrowed, and paying with cash; I'm setting it at 3.5% over spot at time of sale. Still people are willing to pay upwards of 10% for this service.

How does this need any discussion? It varies for everyone. Basically as low as you're willing to sell, but as higher as the buyer is willing to buy. How hard is that?

I really don't see how ethics comes into the selling price when the existence of several exchanges makes price discovery transparent

Selling price is a supply/demand curve thing. What does that have to do with ethics? If you are taking advantage of a new person's naivety that is one thing but price is purely a function of supply and demand.

If you haven't mined them and have occupied them via purchase you can argue that you're acting as an exchange and for that there's a fee (1-2%?)

If we're talking about ethics I think that's the right way to go about it.

local btc around here for cash inperson deals are selling for 15-20% above preev. I don't understand how these guys make any sales at these prices but apparently they are.

I am trying to have forum members express what would they consider as ethic a markup for the service i described in the OP, perhaps because I am curious to see what would be the result of the general consensus in that matter, nothing more, nothing less, and nonetheless nothing hard.


It comes to ethics because in the proposed scenario, it could well be that the buyer request our "service" due to ignorance about how to do it for him/herself or as already was mentioned, plain naivety. Overcharging wouldn't be ethic IMO, but since haploid23 correctly appointed "it depends on every person" since we are all different. The goal of this post is to try to narrow down a % range, just that.

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Thanks all for the answers, so far we have 1, 2, 3.5, 5, 7, 10, 15, 20...

I just realize that I haven't give my opinion, I think for a person that I know from before would be around 2%, for a complete stranger 5-10% depends on the case and what I feel the reason of him asking me to do the task is.
Please note that the 10% fee would include preparing offline paper wallet for the guy and whatnot's.

Keep it coming, I think it would be interesting to see what the community thinks.

Eth.

Personally, I'd try to get as much as I can, as long as both person agrees to it. If the buyer agrees to pay me 300% over spot price, does that mean I'm shady for accepting? Definitely not. I did not trick or lie to him, nor did I steal from him.

A good gauge for true market value is to look at prices on exchanges, then look at the percentage difference on LBC with cash. This is the true current market price, which represents the average price people are willing to pay over spot.

Why would you say "below market"? I've never heard of gold sold (or exchanged) for below market before. I could see buying a car below market, but why would you sell btc at a loss unless you did not consider it worth what it is worth?

I would say it would be at least market plus whatever percentage the seller considers worth the hassle of losing his btc and doing the transaction.

Whatever the market will bear?

Also, you need to consider whether you are providing liquidity, taking liquidity or making a one-off deal with your trading partner. If you are providing liquidity (which I assume to be the case) charging a 5 - 10% premium seems to be the acceptable practice.

There is a cost associated with accepting large amounts of cash. I had to invest in a currency counter to count the cash and detect fake bills, and I've gotten a number of fake $20 bills.

This is by far the best answer.

If you charge too much of a markup then buyers will simply not purchase your bitcoins as others will have a more competitive prices.

This here is exactly correct.   Just like any other good or service, you should charge whatever anyone is willing to pay (and you are willing to sell)