Bitcoin Forum

I just visited NM Tea Company in Albuquerque, NM. I chose this particular tea store specifically because I found him listed as accepting Bitcoin and I want to support the Bitcoin community. However, when I inquired about it, the owner stated that he no longer accepts Bitcoin because, while the idea and principles are great, the volatility scared him. He explained that if he sold 2BTC worth of tea today, which might equal $17, it could be worth only $8 tomorrow which would cause him to have lost roughly 50% of his revenue from the sale.

I'm not versed enough the retail aspects of Bitcoin so I didn't have a rebuttal. I am interested in what this community has to say about his concerns, which can help me to engage next time.

Thanks.

The rebuttal would be that the dollar could also be worth 50% less the next day.

The guy wants dollars, let him have dollars. Accepting bitcoins is awesome for people who want bitcoins. If for some reason customers really want to spend bitcoins and you want dollars use bit-pay or similar to avoid volatility and losing sales.

Also the value could double as easily as halve and if he thinks otherwise he has a worse opinion of the value than average and obviosly should not accept it in his store.

There will be 21 million ever and he doesn't want any, better that other people have them then, nice of him to get out of the way.

Show him Bit-Pay. The volatility shouldn't affect him, then :)

This is a terrible way to think about it. If you do not address the issues merchants are seeing then it will be very hard for Bitcoin to have the wider adoption many hope for. Exchange risk *is* a real concern and you should not shrug it off. Instead we should think about how we can work with merchants and help them understand and manage this risk or even turn it into a non risk.

If you want Bitcoins to matter beyond a tiny sphere, then you have to be ready to solve the problems others are having and not just think about yourself.

I have tried to get people to accept it but they also think its overly complicacted, cumbersome and hard to manage and risky 
( all of which any new payment would have anyway )

the one person i know who does accept bitcoins is only accepting them as an "investment" (he knows they will be worth more in 5 -10 years than now )but not as a currency

this is another problem ,everybody cant just hoard coins hoping the value goes up  ,as addictive as it might be  :D

they have to be traded constantly and thats just not happening enough ,its been said before but if you had a 5 dollar note and a bitcoin in your pocket you would buy your  lunch with the 5 dollar note

the bitcoin needs spendability,outside of silkroad and tax evasion if its ever going to fulfill its potential as a  serious currency 

1. Bit-Pay allows merchant to accept Bitcoin payments without any currency risk. If he wants $10 he gets $10 (minus a small fee).
2. Even if he doesn't want to rely on Bit-Pay, why does he have to wait until tomorrow? He can sell any received bitcoins instantly via an API. He doesn't even need to wait for the coins to clear into the exchange, he can operate with a reserve, or sell short.
3. Was he just scared about volatility, or was he ever actually harmed by it? If he kept it going I doubt he would have any significant losses due to volatility, even without doing anything to protect from it.

You're being awfully negative. Accepting bitcoins is awesome for people who want bitcoins but is also great for people who don't.

Businesses strive to minimize risks. Even if his expected profit/loss from volatility is 0 it creates variance which is bad. The concern is legitimate, his decision is not.

A merchant's speculative position on BTC doesn't have anything to do with whether he should accept Bitcoin payments. He could accept Bitcoin because it's cheaper while going short because he thinks the price will go down, or he can take a long position because he thinks the price will go up but not accept them because it's not worth the hassle.

I want some of the 21 million, but I also want to be able to use them, merchants accepting bitcoins is vital and the more there are the better.

Thank you for combating the groupthink that seems so prevalent on these forums.  It's nice to know there's at least a few who aren't in denial about the problems posed by exchange risk for merchants looking to accept BTC payments.

The good folks at Bit-Pay certainly recognize the problem, and recognize that there's money to be made in providing a solution.  I hope Bit-Pay (and others like them) get some traction in the marketplace...otherwise I fear BTC will continue to go nowhere fast.

it's called "Gresham's Law"...
https://en.wikipedia.org/wiki/Gresham%27s_law

No, I'd be thrilled to buy it with bitcoin and if I was dying to keep my investment 100% in bitcoins, I'd go home and buy more.

The "hoarding problem" is not really a problem as long as the exchanges are as easy to use as Bitfloor.

the current  exchanges are anything but "easy to use "

intersango is fcked (cant get money in or out)  ,gox has got too much rules and regulations and delays   and i dont personally trust small exchanges with big transactions
so i would prefer  person to person trading ,face to face if necessary

I didn't say anything about intersango or Gox. Let's try again.
The "hoarding problem" is not really a problem as long as the exchanges are as easy to use as Bitfloor.
Bitfloor is EXTREMELY easy to use.
Person to person is fine, once there are enough people using it. But online exchanges are necessary to get to that stage.

While those points are by and large valid, nos. 2/3/4 essentially require a company to add a forex function to their operations.  For the vast majority of small businesses, there's simply no rationale to do so.  Even if they have the expertise, these guys just don't have the time.  IMO, the only reasonable option for NM Tea Co. - and indeed 99% of all small businesses - is Bit-Pay.  And not to nit-pick, but with Bit-Pay he would get $16.54 for his tea, not $17...correct?

David Edwards President, NM Tea Co. Inc. (http://www.nmteaco.com/aboutus.html) was once active on these forums (https://bitcointalk.org/index.php?action=profile;u=4240).  Given his last activity here was April 2011, I doubt he's even aware of Bit-Pay.  In any case, it appears to me that he put some effort into getting bitcoin to work for his business.

I've sent an e-mail to the address in his profile asking him to share his thoughts/experiences on bitcoin...perhaps he'll respond.

 :)

My name is David Edwards and I am the owner of New Mexico Tea Company. I was asked by SMTB1963 to respond to some of the discussion.


Thank you for coming in, I hope you are enjoying your tea!



Yes, but it wont! And if it does, I have a lot worse issues to deal with then buying more tea... like finding a bunker to hide in!


I am looking at it logically, and last year the potential gain did not out weight the risk. I saw within a few months bit coin go from $2 to $8 to $16 to $60 (!) and then back down to $8. I had people who wanted to buy tea when it was at $60, if I had done that then I would have lost a significant amount. I also did not want to keep flip flopping and accept them, then not accept them, then accept them again, so I decided to stop all together.

Maybe the system has calmed down now... I have not looked at it in about a year. So you can say... "well just sell all your bit coins for $60 when you take them for $60"... but I have other aspects of this business to run as well. I cant be monitoring bitcoin all day!


I used Mtgox and my bit coin last year, both got hacked right after I sold all my coins.



I am not running a speculative business, nor do I really have much interest in the nitty gritty of finance. I do like the idea of bitcoin as a marketing tool, which is why I experimented with it last year. At the time I made the determination that the extra rigamarole, and possibility of loosing money (Remember I have to buy the product your buying. I only have a certain margin to work with before im paying you to buy it!) was not worth the extra business that it was bringing in.

However, technology has moved on... I did not know about bit-pay, so maybe its time to take another look at it.

Thank you everyone for your input and thoughts on this.

Thank you sir!  (man i love the internetz)


I think that sums it up pretty damn succinctly.


I guess we'll hold off on banishing New Mexico Tea Company from the wiki LOL!

Thanks again for your perspective...if you end up experimenting with Bit-Pay, let us know how it goes.   ;D

You don't know that. The US's currency has certainly crashed before. I agree it's unlikely that it would happen in one day. If you've looked at the price history for bitcoin, it's also unlikely bitcoin will drop by 50% in one day.

If you don't want to invest anything into bitcoin, and just want to use it to increase your customer base, that's still great. We are happy to have you and support you. You can cash out every day yourself with an exchange like Bitfloor, which has free ACH transfers. Or you can pay someone else like Paysius (1.5%) or Bit-Pay( 3%) a fee to cash out instantly for you.

One thing I don't understand is the statement that it's too much hassle for the amount of customers that it was brinigng. If it's bringing in very few customers, surely it's very little hassle. Also very little risk. Even if you were risking leaving some of your assets in Bitcoin, with the very small amount of Bitcoin business you're getting, vs the fanatical support Bitcoin customers give (at least the ones I know), it seems like you have very little to lose.

But obviously that's up to you to decide, whether I understand your reasoning or not. I hope you keep Bitcoin in the loop. If I lived nearby or was even traveling nearby, I would make a point to stop at your store or anywhere that's accepting Bitcoin right now, and I don't even drink tea!

Best wishes. :)

Not really an argument in this discussion but just as a FYI: The highest price for Bitcoin has been $32, and that's where the bubble burst

Volatility is expensive to the ones causing it. It's a setup problem that will solve itself over time, and has nothing to do with Bitcoin itself.

Bitcoin volatility has been decreasing. It may go up again if we experience exponential growth, but we all know this can't go forever, so as long as the system stays healthy, it will always settle with time.

Just tell him to come back later, when it's more stable. Smarter would be to already use it for small sums now, to prepare for the case that things get serious.

I'm sorry, Sir; but you are remembering this all wrong.  Bitcoin's all time high was just under $32.  You seem to have doubled that number, which is a sign of an emotional response, not a rational thinking process.

Yes, things have moved significantly on that front in the past year.  I'm pretty sure that there are other options than just Bitpay as well.  Such as plugins for online retailer sites that handle the exchanges automaticly via their own API's.  Doesn't Bitinstant also do instant exchanges for merchant accounts as well?

yes ,it was never at $60 but even so ,if he sold a crate  of tea when the bitcoin was $32 and it  subsequently crashed to $2 he would be in the red because the tea suppliers and the landlord  and the staff and the utility companys wont care about a BTC crash and all expect their dough on time  in FIAT regardless

its understandable why he has to drop the bitcoin at that time ,now we have the newer infrasture that negates that risk ,all we need is more open minded merchants like him to at least  give it a fair chance

i would love to fill up my car or  motorbike with petrol  on a btc charge card but it would need to be quick ,i couldnt stay in the gas station waiting  for 6 confirmations to be added to a block before they let me drive away   :D

in thailand  ,you can already buy mobile phone/ internet   credit with BTC but only on  a certain  website and its  slower than using cash in a 7/11 or a card at an atm

as it gets more user streamlined and user friendly  for daily purchases  , the skys the limit for BTC

(fingers crossed)

I think its going to be hard its going to be hard to control the volatility much until the economy grow, which, is accomplished by merchants battling that volatility for a while.  When the market is this small and can be so easily influenced by the actions of a few large players, there is always going to exist this uncertainty.  The real answer is to grow bitcoins popularity.  Greater distribution will bring greater stability.

Look down at the numpad on your keyboard.  See how close the "3" is to the "6"?  ZOMG!!! it's right next to it!  I think you should consider the possibility that Mr. Edwards simply fat fingered the number in his haste to reply (which he did during his business hours BTW).

But since the 30 vs 60 error has absolutely no effect on the validity of his volatility argument, feel free to point to any spelling/gramatical/punctuation errors in the rest of his post as evidence that he doesn't think rationally.   ::)

but merchants are not yet  geared up to accept them

and i think bitcoin fans  hoarding coins in the hope that
 a few years down the line  they might be worth 50-100 -$500 per piece  is not helping the situation
of getting them spent

around europe in many cities people dont know ,i tried to tell a european  admin girl  in work about the system  and first thing she said "but nobody will trust it "  

obviously its a sub 100 million $ market already and its just warming up so "some people Do trust it "   but getting outsiders  to recognise the benefits  and pick it up and run with it will something i will be giving a lot of thought towards  to  help get it out there

on the plus side , a few friends  i have introduced to it have taken to it well and we use btc to trade between  each other ,and also for private loans , wagers and bets on sports etc   :)

This is exactly why I started this thread. I really want Bitcoin to succeed for many reasons. But, I think NMTEACO's concerns are completely valid and the wider Bitcoin community should have a common, well informed, rebuttal for these types of concerns. I'm not a merchant and don't understand merchant issues or concerns, but I do know that things have to be relatively easy before people will adopt new technology for wider use.

The rebutal was stupid (and self defeating, FreeMoney the coins are only worth something if people want them) but THERE IS an easy solution.

bit-pay.  Very easy.  A merchant can signup in about a day, have no currency risk, integrate with online shopping carts, even accept coins from a mobile phone.  If a merchant can figure out a merchant account (CC) they can figure out bit-pay.

Even without bitpay the currency risk is being massively exaggerated.  How hard is it to send all your purchase coins to an exchange and hit the sell button a couple times a day?  Honestly if a merchant gets only a few bitcoin orders this might be easier/cheaper than bitpay.  Send coins to exchange and hit sell.  The intra-hour volatility isn't that high and volatility goes both ways.    The idea a merchant would sell tea @ $32 USD:BTC and not be able to figure out how to hit the sell button on an exchange for 4 months while price fell to $2 USD:BTC is kinda silly.  Like I said if 1% of a merchants sales are Bitcoin and on average they are exposed to 3% intra-hour volatility we are talking about a rounding error in the cashflow of even the smallest business.

Solutions:
small-business with little bitcoin casfhlow --> manually sell coins or use bit-pay
small-business with significant bitcoin cashflow --> use bitpay or develop in-house hedging
enterprise operation with little bitcoin cashflow --> use bitpay or develop in-house hedging
enterprise operation with significant bitcoin cashflow --> develop in-house hedging

The merchant was uninformed, the OP didn't have the information to inform him but now he does.  Short sightedness on the part of  some bitcoin users doesn't change the fact that trivially easy solutions exist.  There is no unresolved problem, simply uninformed merchants.

Merchant doesn't even have to hit sell all the time.

For instance, on Mtgox you can setup a sell order say for million bitcoins at 1 cent or any other below average market price even with empty account and just send bitcoins to the exchange, which will be sold automatically to  highest bidding orders once they reach exchange (~1 hour)

Of course, but what can be done to change this? Perhaps, I'm unintentionally exaggerating the difficulty, but not everyone "just gets it". Some people need to have their hand held throughout the process (not that nmteaco does, but some do) and/or are not "brave" enough to venture into something so new on their own, but really want to be involved. What can the community do to make this process, from beginning-to-end, easier for the least technical among us? If we want this Bitcoin project to move beyond a project and into wide-spread acceptance then something must be done to make it stupid-simple.

Maybe it can never be stupid-simple, I don't know.

Am I expecting too much, too soon?

Simply explain that just like credit cards, payment processors can take away all the hassle and make it easy to accept payments for a far lower fee then credit cards themselves. They don't even have to know the technical background, nor do they need to worry about volatility.
Bit-pay has already been mentioned, there are others as well such as Paymium/Paysius.

I would imagine that setting up a website or creating a well-done flier, and then distributing it throughout the community so that they have it to give to merchants would work wonders for informing people.

Yup.  In fact, bit-pay is easier to figure out than a merchant account from a "fee clarity" perspective.


It's pretty clear (to me) that the above doesn't apply to NM Tea Co.  Mr. Edwards had a MtGox account.  Mr. Edwards had a Mybitcoin account.  Mr. Edwards engaged the community for advice on how to integrate bitcoin payments into his business model.  More importantly, Mr. Edwards accepted BTC in trade for his goods for a period of time.  Unless Mr. Edwards is lying, it appears to me that he had a working knowledge of the mechanics of bitcoin...certainly enough to make a rational decision on the merits of continuing to accept BTC (in the absence of bit-pay).  Insinuating that Mr. Edwards didn't know how to hit his Gox sell button is completely disingenuous, IMO.


The first thing that came to mind after reading the above was Jimmy Fallon's old bit on SNL: "Nick Burns - your company's computer guy"

http://agbeat.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/nick-burns-snl.jpg

D&T (and with all due respect cuz I'm a fan of yours): if bitcoin is truly a superior electronic payment system, and if mitigating the risks of accepting bitcoin are so trivial for merchants, why don't we see better adoption?  Bitcoin and bit-pay have been around for some time now, and we ain't in the days of the Pony Express info-mation-wise.  If the BTC "low fee/low risk" value proposition for merchants hasn't caught on like wildfire by now...why?  How long will the "merchants just don't know enough about bitcoin" argument last?

Edwards/NM Tea Co. is exactly the type of merchant that bitcoin should welcome/cultivate with open arms.  I don't know about the rest of you, but I see an entrepreneur who put some precious time and money into an attempt at making BTC work.  Dude's running both a brick & mortar and a web facing operation (and more?), and he had the foresight to recognize that bitcoin might be good for business.  Dismissing his problems out of hand is, well...

I never dismissed the problem.  I said THAT A SOLUTION EXISTS.  The word solution by definition indicates a problem did (as in past tense) exist.  However there are multiple solutions to the problem.  If the merchant doesn't know, understand, or trust the solution(s) then the fix it to inform/educate/advocate.  Pretending there is no solution exists simply because the merchant isn't informed is well stupid and not very productive.

After two clarifications if you still can't understand that well I just have to assume you don't want to understand that.  I won't be responding further not because you disagree but simply because it likely is pointless.

I think this may be coloring your view.  If you feel BTC has gone nowhere fast you should uninstall it and not look back (maybe save some coins in a paper wallet so you won't be kicking yourself in 2030).  The adoption timeframe for mainstream users is measured in years (if not decades).  Bitcoin isn't just PayPal 2.0 it is radically different.  Not just on the technological level but at the cultural and societal level too.  It puts responsibility back on the user, it has an independent currency, it has no central planner.  Those are hard concepts to grasp, trust, and understand.    Much like the internet took a couple decades to become "mainstream ready" Bitcoin will take a long time too.  I am happy with Bitcoin growth rate (in users, transaction volume, services, and maturity of codebase).  If you really feel that BTC is "going nowhere fast" then honestly there is no realistic future scenario that isn't going to disappoint you.

The unresolved problem in my mind, as a merchant... is "why"? The only reasons why MY small business (You seem to be lumping all small business in the same category. But retail is different then restaurants, which is different the a hair salon, which is different then an electrician, which is different from a computer consultant... graphic designer... the list goes on.) would want to accept bit coins is as a marketing ploy.

I see no technical reason why bit-coin is a better solution to accepting money then my merchant services (I have three for different forms of payment, quickbooks merchant service for instore and paypal and authorize.net for online). in 6 years of business I have only had one charge back, so that is not an issue (for my business). There is even some technical reasons why its worse of a solution. Like hacking (though I dont know if thats still a problem). One might argue that the credit card fees are a reason to accept bit coin. But since the number of people who want to use bitcoin is low compared to all of our customers, saving money on the small number of bitcoin transactions is not enough to sway me to accept bit coins for lower fees.

So... it comes down to this (for me); Is doing all this extra work bringing in a completely separate form of currency worth the added number of customers who would not have otherwise shopped with us... and the answer is "I dont know yet"... Obviously I see value in the project, or I would not be on the forms debating it.

BY THE WAY... I have not seen anyone mention the extra accounting work associated with it... When we did accept them, I had to set up quickbooks to work with two separate currencies. (I think I set up bit coin as a Zimbabwean dollar) So when a bitcoin sale came in I would have to accept the payment as a "check" in our system. Then deposit that check as Zimbabwean dollars into the bitcoin account. Then when I cashed out, I would have to treat it like a currency exchange to record a profit or loss from the rates going up or down as a transfered the money from the bitcoin account into our checking account.


Thats hilarious, and im sure there are MANY!

mmm...I don't recall claiming/pretending there is no solution.  In fact, I mentioned bit-pay as a solution in my first post in this thread.  Responding further would indeed be pointless, because we appear to be in agreement on that matter.  My question to you was regarding the apparent lack of broader merchant adoption, given the solutions that currently exist - which you did see fit to address:


Decades?  That is disappointing.  I guess I simply don't understand why a cultural/societal shift is a necessary prerequisite for merchant adoption of BTC.


Currency humor!  (I lol'd)

Speaking of accounting, do you employ an outside accountant for tax preparation?  If so, what was his/her take on that "Magic Computer Money"?

We use a shopping cart software called 3dcart, which I do not see as supported. If someone is willing to write this plugin, i would be happy to implement it. It looks like right now everything would have to be done by hand. I dont see that it would be worth it (at this point) to pay a developer to build the plugin for 3dcart.



I do have an accountant (but not a book keeper, I do that myself). As far as I could tell, having magic computer money is just fine... because I did not treat it like magic computer money. I treated it like a foreign currency.

Lets say I sold $20 of tea for 10 bitcoins. I would ring up the sales in dollars, and accept a check for that amount (in dollars) in our POS. So now I have a $20 check sitting in Quickbooks waiting to be deposited. I would then "deposit" that check into the Zimbabwean Dollar account at an exchange rate of .5. So I would end up having 10 Zimbabwean dollars in an account. I know it sounds like a joke, but quickbooks only allows you to use known currencies. So I had to pick one, and i figured I would never need to legitimately use the Zimbabean doller. Only I knew that these were really bitcoins (as there is no way to create a "new" currency in quickbooks).

So after a while of this, lets say that I had 300 bitcoins in the account, and I was ready to cash out. I would then transfer the money from the "bitcoin" account to my USD checking account using the exchange rate that I sold them for. Leaving dollars in my checking account, and a zero balance in my "bitcoin" account.

The most I ever did was about a $1000 and it was all in the middle of the year. I am not sure what would have happend, or how I would have accounted for it from year to year if I carried a bitcoin balance. I also dont know what would have happend if I made lets say a $15,000 dollar profit from the currency gaining value. I assume its just considered like selling any other commodity at a profit, but im not sure if there are special taxes* for making money on money. It never came up in my case.

*We are an s-corp which does not pay taxes on profits, as all profits are distributed to share holders at the end of each year, and are taxed at that 15% rate that Romney has made so popular. So i dont think that in our case there are any tax implications for making money off of the sale of bitcoins.

I just took a look at their rates... it would be 2.69% to cash out. This is not horrible, but its not great either.

Bingo!
Well, they take the volatility risk and the accounting nightmare(?) from your shoulders, so that's got to be worth something. Right?

Yes, though of course bitcoin created those problems in the first place. So its basically making it equal to a credit card, both in terms of price and convenience. Which then of course begs the question I brought up in my early post "why bother at all?". How many new customers would want my product enough to buy it with bitcoins, but not want it enough to buy it with dollars? (especially because there is no market pressure, you cant buy tea elsewhere with bit-coins *that I know about*)

If all else is equal, im geeky enough to want to implement it just for fun and to promote a cool idea... but the larger question here is "why are more merchants not adopting this"... I think its pretty clear.

You forgot the most important detail of them all, one I left out on purpose: no chargebacks!
That little detail makes it so much different from Credit Cards/Paypal, and on the long run it will save you money for sure, thus increasing your profit margin.

Ofcourse I have no idea if you have problems and lost profit because of chargebacks.

In 6 years of business I have had one charge back for $35 dollars. (And that was from a sale in my brick and mortar (frame stucco) store ) Thats MY business, I know some other merchants might be dealing with more high risk customers. And maybe for them charge backs are a huge issue, at which point the value proposition for this whole thing would be completely different. I know the talk of the town last year was selling drugs with bitcoin and money laundering.

On a more esoteric level about charge backs (and maybe why I have not had many). I am trying to build good relationships with my customers. If I have a customer who wants their money back, its not an issue of their "power" to demand it back, and my "power" to say no... Its a matter of, "in most instances the customer is right", and he or she gets their money back regardless of if its bitcoin or dollars.

Some people buy items with bitcoins that they wouldn't otherwise buy, because they are trying to promote an ideology or bootstrap a microeconomy. Were I a merchant, I would accept bitcoin and post on this forum, simply because it's great advertising.

My take: non-reversible transactions are bitcoin's number one selling point to merchants. I plan to have a product to sell in coming months, and for the reason above, I will not be accepting paypal. I don't want to risk a chargeback with the low margins I will have, especially one 4 months after the transaction. Bitcoin, if nothing else, is THE solution to chargebacks.

Edit: 2nd paragraph has already been addressed...

I think my last post might've given you the wrong impression on a couple of things...

First, I know a little accounting.  I can say with 100% certainty that your handling of BTC transactions within Quickbooks is entirely correct, and I certainly didn't mean to imply otherwise.  What I found humorous was that you happened to represent BTC in your system with Z$ - a currency that was fairly valuable when it was introduced, but was eventually abandoned after hyperinflation made it worthless.  I figured your rationale for choosing Z$ as your BTC proxy had nothing to do with the currency's history, I just found it to be an amusing coincidence.

Second, my use of the term "Magic Computer Money" is nothing more than a reference to a rather silly thread (https://bitcointalk.org/index.php?topic=94883.0) on another part of the forum.

Finally, my inquiry about your accountant was strictly a matter of my own curiosity about his/her reaction to seeing BTC transactions on your books.  None of the CPAs I've spoken with have heard a thing about bitcoin.
_____________________________

IMO bit-pay is a real bright spot in the bitcoin universe.  Too bad they currently lack a plugin for your site's cart software. 

Anyways, thanks again for sharing your thoughts/experiences here.   ;D

If you wan some business to accept BTC, DO NOT! tell them that BTC is a "blaa blaa new currency" but talk about it as a way to transfer currency for 1/10-100th of a cost thy pay for CC, DC etc payments now. Do you know what 5 USD or EUR card payment will cost to a merchant? Find out and weep! 
This "new internet currency" bull shit as to the biggest PR fuck up ever for BTC.
 
 If they get worried about btc-fiat exchange rate, introduce them to a service, that virtually eliminates this risk.
BTC is a low cost and secure way to transfer money with out banks, domestically or internationally.

I concur.

https://i.imgur.com/9Bhmz.jpg

In a nutshell: Sell the points that are important to the merchant, not the points that are important to yourself.

If you are in the business of selling socks and underwear, odds are you care nothing for philosophical and ideological advantages.

+1

That is great! Both in terms of hearing im doing it right, and the currency joke.



Real Transaction Example from a sale accepted though paypal:

Total: $27.77 sale

Fees:
Paypal: .91 cents (3.28%)

Example of accepting with bitcoin and cashing out at the same bitcoin value:

Bit-pay: .75 cents (2.69%)

MTgox and Dwolla (I used them before; .6% for mtgox and .25 cents for dwolla: .27 cents (.97%)

To me it seems like mtgox and dwolla offer a compelling reason to accept bitcoins. (If you are willing to play the market a bit, you might be able to cash out such as to wipe out the fees incurred.) EskimoBob, there is another reason to accept them, beyond being cheap(er) money transfer, and thats the marketing aspect. If I am the ONLY place in the world you can buy tea with bitcoins, thats potentially a bit deal.

So the only hurtle I have at this point is easy integration into my shopping cart. This is something that authroize.net and paypal have been very good at...

What I did last time was sell giftcards to our store by hand basically. You would send me bitcoins, and I would send you a giftcard code worth the dollar amount of the bitcoins you sent, in essence acting like an exchange myself.

If I decided to do this again, what services would you all suggest and trust? what is the communities opinion of mtgox right now? Is it to much hassle buying gift cards, then waiting until I am able to check my email and create them in our system? (It would seem having it automated is out of the scope of possibility, I dont have enough technical skill to write plugins for my shopping cart).

The current problem is that MtGox has a very long delay on Dwolla transfers. :( You also have to go through an arduous verification process, and the wait time is 7-14 days and sometimes longer.

https://paysius.com/ has lower fees then Bit-pay, and they pay out to Dwolla, but they also don't support your cart (although there is a php library available). Bit-pay actually pays out via ACH, and actually bypasses Dwolla completely.

I think the current state of merchant providers is that they just need some adoption and growth, and with that we might start to see more extensive cart support, lower fees, and so forth. For a business that can't be guaranteed a revenue stream from Bitcoining nerds, it may not be worthwhile to set up in the first place, but the more places that accept it, the more the word gets out on the street. It's a chicken and egg problem, and it may be 10 years or more before Bitcoin truly becomes mainstream.

@nmteaco - what shopping cart are you using?

While we can eliminate the risk of fraud, we do introduce the risk of currency volatility.  So right now we can't get our fees down as low as we would like, but hopefully as the BTC exchanges become more stable we can reduce our fees even lower.  

We can put a direct deposit into a US bank account every day, just like every credit card processor does.  We hold no reserves and money is delivered overnight ACH.  Email me if you need any help since I don't get on the forums as much as I used to.  tony@bitpay.com

Does he take credit cards? If so, he's giving up about 2% of his revenue on every single transaction. If,say, the risk of a 50% loss is 1 in 30 (and it's nowhere near that high), that's equivalent to a 1.7% fee. He's still better off taking Bitcoins than credit cards.

Of course, in reality, the chance of an increase in value pretty much balances out the risk of a decrease in value. If you want essentially zero risk, Tony provides that service.

He mentioned 3dcart - I'm assuming it's this: http://www.3dcart.com/

EDIT: It looks like it actually integrates or plugs in directly to QB, which is actually pretty cool.

Looks like the cavalry showed.   ;D

You bit-pay guys keep on keepin on.  The 10+ year adoption assumption is wrong, and y'all will kick it to the curb.

http://t.qkme.me/3qa3qf.jpg

(since I've become an unpaid bit-pay shill, you guys should send me a key chain or sumpthin...thanks in advance)

Yes, but HOW... I would either need to shift my whole cart to a new platform, or do everything by hand (and still pay the exchange fees). Both increase costs. taking bit-pay as an example I only save .59% over pay-pal (16 cents on the average transaction.)

Lets say that I could change carts (or hire a developer) for $5,000. Our average sale is around that 27 dollars I used in the example.  It would take 31,250 bit coin sales to JUST BREAK EVEN! That would take years, even if every transaction that we took shifted to bitcoins. If I processed ten bitcoin transactions a day, it would take 8.6 years to break even. And when I was taking bitcoins last year, I had about 2 a week which would take 300 years!

Even if it just cost me $1,000 to implement bit-pays automated solution it would not be worth it.

Lets look at the math doing it by hand with gift cards... Again, on the average transaction using bit-pay I save .16 cents. So someone I pay $10 an hour would have to be able to get the email notifying us of a bitcoin sale, go into our shopping cart software create the gift card (then sell the gift card from our online store into our POS system so that when we ring up the sale of the goods there is a way to pay for it in POS) and then write an email to the person with their gift card number in there... all in under 1 min... and thats just to "break even".

Bit-pay is a more expensive way to do it, I would not use them unless it was automated, if im going to be doing things by hand anyway, i might as well use a cheaper solution... but as the person pointed out before, there is no real good solution... as mtgox is cheap, but can take two weeks to send the money! I will contact bit-pay and see if they have any interest in developing a 3dcart plug-in-play solution.

EDIT: But maybe im just too emotional to see the true value in bit coins ;)

Guys, what about creating a donation fund for bit-pay to hire developer who will integrate support for their API for 3dcart?

Can't argue with your figures.  Even if you added a surcharge for BTC payments (and your customers were willing to pay it), the business case for switching cart vendors or developing your own solution to support BTC payments just isn't there.  If there was a straight forward/low risk way for you to hedge your BTC exposure, you could handle the transactions manually...but sadly no such mechanism exists (that I' aware of).  Maybe bit-pay or another BTC payment processor will develop a plug-in for 3dCart...


HAR!  (we all knew that, cos you didn't capitalize the "t" in the first word of the last sentence in the first paragraph in your last post)  


I'd throw some bucks at that...can I donate via Pay-Pal?

http://www.xtremesystems.org/forums/images/smilies/horrormovie.gif

I have created a crowd-funding project for this at PMF that anyone can donate to

http://www.piratemyfilm.com/projects/378

using one BitPay merchant to help another!

To participate, you can reserve (pledge) shares.  All donations will be collected once the goal is reached.

this is a old post from Bitcoin > Project Development > Post reply ( Re: CoinHub - for business, that accepts bitcoins (shop plugin, safe wallet, trades (http://"https://bitcointalk.org/index.php?topic=76281.msg846578#msg846578")) )

There are fixed cost for any business to accept a new payment means. Like setting up the cash register and accounting hooks. That's even more significant if there is currency conversion involved. So the first customer walking in with bitcoins IS a significant hassle for the shop owner today.
However Paymium (bitcoin payment processor) is working on it to make it simpler.

Disclosure: I am a co-founder of Paymium.

i just bought 10 shares :)

Fascinating and well-needed thread. The other day I was asking a local trader about the local currency in their town, which has ben around for a couple of years. The 2 main problems were 1) she couldn't spend the local currency on "useful" stuff like paying bills or parking, which meant 2) she had to traipse up to the (physical) currency HQ to convert notes into GBP. Being a sole trader, that meant either closing the shop, or using up free time.

Bitcoin is digital and revolutionary yadda yadda sure, but has the same problems - 1. It's a good way of moving value around the world, but hasn't (yet) got it's own traction - it's more of a common medium than a currency within a (self-contained) group, IOW the transport protocol is (currently) more important than the economy. 2. Switching between "traditional" value protocol (USD, GBP, etc) and BTC is still more hassle than it's worth if your main economic activity takes up enough of your time already.

Philosophy will lose out to functionality every time. Coinhub looks really interesting and bitpay is a major step of course, but BTC is going to need even more smooth, professional transaction interfaces and services sitting on top of it to really become a currency. Talk of what people "can" do given an API needs to be backed up by a whole host of non-technical reassurance.

Will watch this thread with interest. Are there any lists of which epayment systems are/could be supported, and possibly who'd want to use/fund development on them?

Would it help if bit-pay signs up as a payment provider?

http://www.3dcart.com/payment-provider-application.html

posted by scribe:

I think it may be one of the most important threads ever put on the forum.  It's not often one can get real feedback from real merchants about a currency solution; unfortunate that he has to get the typical dickhead talking down to that runs rampant on discussion forums, but nice that helpful and knowledgeable people are chiming in as well.


Frank

Perhaps, but you do save.  If the bitcoin trade volume never amount to much, you've lost nothing for trying it; however, if the trade volume justifies a lower cost method, you'll be motivated to make it happen at that point even if no one already has. 

Still, I'd wager that, now that the developers know that there needs to be a plug-in for 3Dcart, it won't be long before you have what you need.

Many of your potential Bitcoin customers aren't going to be shopping with you if you don't accept Bitcoin. So you don't "save 16 cents." You gained a sale where you previously didn't have one.

Except opportunity cost. And implementation costs. The gulf here is between hobbyists who are happy to invest their free time, and business-owners who need to know that investing time is going to bring payback. Time isn''t just money, it's risk.

I have acknowledged that there is a good reason to take bit coin, and thats to get customers who would not have known about us... but thats a separate argument then if bit coin will save me money over traditional currencies.

A lot of people here just assume its the best thing to do in all cases, and anyone who is not accepting bit coin is an idiot.

My goal here is to play devils advocate, by addressing your solutions with real world examples of why it might not work. Simply saying "its cheaper then credit cards or paypal" is not a good argument for why my business should accept bitcoin. As I have shown, using bit-pay, it would take years to just break even on the investment to get it setup. Your asking me to invest money in something that after years ill get back to where I started. If bit-pay develops the plugin for my cart, then of course I would implement it, even if it costs the same (or slightly more), because if no one uses it, I have lost nothing, and if everyone uses it, I will get new customers.

For me, the more compelling argument is the marketing aspect of accepting bit-coin. Being an early adopter in this market means that my business will really stand out. Also technical people like to support the thing they are passionate about. If a sizable portion of bitcoin pioneers like tea (in my case) then it makes since to put my products infront of them. But its a risk... I know I wont make my money back on the savings of credit card fees, so I have to take a gamble that enough of you all want to buy my product that it would work out at the end....

Its far from a no-brainer!

It's really not that far.

If you don't have the demand to justify whatever investment a merchant service provider's solution will cost you, then you really don't have a problem. Handle the small amount of orders you get manually and send the bitcoins straight to Bitfloor, and cash out once a day or once a week, and then move the money (for free) via ACH to your account. For the vast majority of Bitcoins history, holding onto your BTC for a few hours or a few days makes you money.

Once you start getting enough Bitcoin customers so that this is no longer feasible, then a small investment in a merchant services solution will make sense.

I did not know about bitfloor... but looking over their site and thinking about all this over the past few days has given me an idea....

Here is what I can do:

1) The shopping cart experience stays the exact same.
2) When they get to the payment window there is a check box that says "pay with bitcoin" (this will really be just an offline payment type so that the order can go though)
3) When the bitcoin checkbox is selected our bitcoin wallet id will show up.
4) there will be instructions to send the dollar amount in bitcoins (the customer will have to do their own conversion)
5) They are checked out, and before I send the order, I just make sure the bitcoins have been transferred.

We are closed on mondays, So I have the afternoon to try and implement this!

Why?  Is there some reason that the script couldn't check the MtGox spot price when called and do the math right then?

nmteaco - you might want to check out these guys: https://paysius.com/

They are offering merchant services, and are 1.49% to cash out instead of 2.69%.

I don't see "3dcart" on their supported carts page, but if they are hungry to compete, perhaps they will do the work necessary to add support it if you contact them.

By the time your Bitcoin customer base is large enough to justify it, there will probably be more merchant services available.

Anyway, like I said before, I don't even drink tea, but if I was local to you, I would stop by your business just for the novelty of completing a POS bitcoin transaction. I'm glad you're sticking around.

Im sure... but do you know the script? I am searching for it now!

I drink tea, but I'm a bit too poor right now to be ordering. (I'm working on that though)

The Paysius guys wrote a plugin for me when I asked. It probably helps that I know them and my cart (Ubercart on Drupal) is fairly popular. It only took a couple days to get it written, installed, tested, and debugged. There's been a couple hiccups due to my webhost being retarded, but we got it figured out easily enough.

All you guys got me in the reality distortion field I figured it would implement the simple by hand transaction on the checkout page of my cart... however it looks like its not that simple.

https://bitcointalk.org/index.php?topic=96796.0

So back to square one it looks like.

Hey NM Tea Co,

Thanks for coming here and posting. 

I think you have given the Bitcoin community some great insight about the unmet needs of merchants.  I especially liked your point about setup costs: the time cost of setting up bitcoin payments far outweighs the benefits at the moment.  We need to make it easier to set up and have a stronger economy in order to make it economically rational for merchants to integrate bitcoin payments.

Hearing about your Quickbooks Z$ solution was interesting too.

Hope you can get payments set up! I'll buy some tea if you do :-)

Thanks,

Chris

PS:  To the Bitcoiners in this thread - this is how merchants feel.  We should be doing more listening and less arguing.  He already had a challenging experience, and we aren't going to convince him that it is actually simple and easy (it isn't).  We are lucky to have a merchant with the patience to wade through all these replies, most would have given up already.

^ THIS
We need to do less theorizing and arguing, and start creating more solutions.

Some ideas for a collections of little tools for merchants to use, that I don't think are available yet:

• A script to pull a pre-generated address from a database table, and present it to the user when ordering. Should be able to trigger an email to the admin when the number of remaining addresses is reduced.
• A script to securely generate new addresses in bulk, and dump the keys to a wallet format while adding the addresses to the aforementioned table. Used for occasional ("quarterly"?) maintenance. For merchants that want it, it could instead store everything in the database for instant transactions.
• A script to instantly create a transaction from a zero-confirm incoming transaction that forwards to another wallet (the exchange, or maybe the cold wallet first). It could have the ability to split the payout between 2 or more addresses by a percentage or other factor. Whether this script actually sends coins would be determined by whether the merchant wants to keep all of its private keys online, or whether it wants to run the transactions in a batch occasionally on a different box. This script would ideally interface with a separate hardware device that has yet to be designed.
• A script to pull data from several exchanges in order to calculate an exchange rate. It should also consider depth, especially for expensive items. This could also interface with the previous point in order to determine which exchange to trade on.
• A script to perform a simple trade on an exchange. It could optionally perform a trade upon receipt of a zero confirm transaction, using funds stored on the exchange already, in order to lock in the rate.

I'm sure there are other tools that should be available, but some kind of reference implementation of each of the above in various languages would be ideal for merchants and such as a starting point.

And if you can shift all that to a "coin hub" like service, we have a winner.
A merchants do not want to become a payment processing centres like CC or DC have :)
Merchant probably wants to download and install the plugin to his favorite shopping cart and register his shop with "coin hub" like service and be done with it.
Yes, it needs some effort but so does CC, DC etc set up.

Question is, how to find few motivated programmers, who can actually write the software for the hub and plugins for the shopping carts.
One way to do it start a GLBSE company and rise the capital (sell equity) via IPO.
 

The Bitcoin community is much larger than it was over a year ago when you were first a BItcoin-accepting merchant.  You might find the additional sales volume we could bring to you to be worth your while.  There are a couple vendors of tea, but there is definitely room for more merchants in this category.

Here's a low-risk option.  Sell your gift card through BitMit.net.  It is kind of like an eBay for bitcoin and it has Buy Now, so you can set the price you wish to sell at.  You can even set the price in USDs, and mark a checkbox so that it will adjust the BTC price relative to the exchange rate.

Here's an example of an electronic gift card ecode that can be purchased through BitMit.
 - http://www.bitmit.net/en/trade/i/2846-100-at-t-gophone-prepaid-wireless-refill-card/description

Here's something else you might wish to consider.  This is bleeding edge, but maybe consider it.

From the proceeds of your sales which were paid using bitcoins, you could turn around and sell the bitcoins to your customers.

https://i.imgur.com/kYUgi.jpg

After you've accumulated enough you print and load a few of these notes, put them in sealed envelopes, and put them in the til.    (Note, however, that project is still under development so a site that prints them similar to http://www.BitAddress.org is not yet functional).

Your only requirement might be that the buyer redeems them to their mobile or tablet before leaving the store so that there is no chance that the coins were redeemed by someone else (since these are bearer codes, once they leave your store you really wouldn't want to guarantee anything)

There are no other sellers yet in your city, so you might find buyers:
 - https://localbitcoins.com/location/nm/albuquerque/

If there is any demand for them, you could have a graphic designer take that SVG and change the design with your own brand.

Or instead of printing your own note, you could resell a physical bitcoin from someone else:
 - http://www.Casascius.com

or one of the several which have been described but haven't yet been produced:
http://www.e-ducat.fr/wp-content/uploads/2012/06/paytunia-card-10BTC-resize.png
 - http://bitcointalk.org/index.php?topic=87441.0
 - http://bitcointalk.org/index.php?topic=64980.msg810841#msg810841

[Caveat, there may be various legal restrictions on offering these in your jurisdiction without there being an issuer.]

Here's another idea:

Give out a tiny bit of bitcoins with each purchase, say 25 millibits (0.025 BTC, worth just under a U.S. quarter dollar).  These can be printed using the same method as the notes above would be).   Put an expiration date on them so that you can reclaim any funds that aren't redeemed within say a month.   But what might these customers do with 25 millibits?  

They could accumulate them and after they have enough to pay for a tea, they pay for their next purchase using them.  (Just like the buy 10 and get the next one free type of promotion.)   You know they won't be going to any other tea or coffee place using them.   Or ... perhaps your customers like to play video poker?   That amount is good for nearly two dozen hands of blackjack from an iPad tablet.
 - http://www.bitZino.com

You can now use bitcoins to checkout on our site....

It is not an ideal solution at all, I have to set the exchange rate by hand every day in the code of the checkout page (I could not figure out how to pull the current price from another domain with javascript)... and everyone who orders will be sending their bitcoins to the same address... which in the other thread I was told could lead to fraud.

However I think people looking to cheat the system are not going to be spending their energy trying to get free tea. Also this is just a stop gap measure until a plugin for my cart is available.

So... just use the shopping cart as normal and when you get to the payment page select bitcoin as the payment method and you will be given instructions on the address to send the payment.

-David

(It would be nice if someone tests out the system.... if you want your bitcoins returned instead of the order just write that in the comments box (i think bitfloor might keep some of it) )

Hey, david... I have an idea that may help, at least a little, with the exchange rate:
BTCTicker has an image that calculates any exchange rate (using MTGox) for you for example:

http://btcticker.appspot.com/mtgox/1.00btc2usd.png
is
http://btcticker.appspot.com/mtgox/1.00btc2usd.png

and let's say you sell $17 worth of tea:
http://btcticker.appspot.com/mtgox/17.00usd2btc.png

Nmteaco - being an accountant myself, I completely understand your concerns regarding the extra accounting headaches that accepting Bitcoin creates.  I think this is, and will continue to be for a long time yet, a major hurdle in the effort to get legitimate and already-existing businesses to accept Bitcoin directly.

Bit-pay is an awesome service, but doesn't really offer enough of a discount compared to credit cards to make a compelling reason to accept yet another payment method for most merchants.  I know the pain of reconciling credit card deposits into a single bank account from multiple payment methods, and adding another isn't something I would want to do without good reason.  So, even though they give you direct ACH deposits daily, which can be reconciled with sales just the same as payments made with credit cards, it's still one more thing to deal with.

That said, hopefully, we will continue to see improvements in integration with existing systems (shopping cart plugins, etc) that will make accounting and reconciliations much easier.

I think the biggest reason a merchant should accept Bitcoin NOW is not because of the lack of chargebacks, or the "lower" fees, but because in most cases, they will suddenly become the go-to merchant for a group of 10,000+ people who need that particular item.  In this case, if anyone here wants to buy some tea, they are now more likely to order it from you than they were before.  I don't know what your margin is, but bringing in extra sales is usually much more significant than saving half a percent of fees on a few transactions you would have already made.  So then, don't think of it as saving extra on fees - think of it as bringing in extra sales with a little more work.

Great! and since you can change a url with java-script, i can dynamically put in the price in dollars!

Yup! Glad I could help.

David, did you contact Paysius about writing a shopping cart plguin that supports your current shopping cart?

I might have to try this out tomorrow. Happy to have a quick look at grabbing an exchange rate via javascript too if you like. Will PM...

Awesome! Just placed an order for your Jasmine pearls and mango mate.  Can't wait to try them :-)

Thanks for placing the order, and helping me test out the system. It has not come into bitfloor yet... how long do these things usually take?

Depends on the exchange. The general rule is 10 minutes for each confirmation. So, for bitfloor that's about an hour. There's a fair amount of variance however, so realistically it's more in the 0:30 - 2:00 hour time frame.

-bgc

^ fixed the title for you  ::)


60-90 minutes on average, they require 6 confirm to credit your account


A confirm means any subsequent bitcoin blocks, including the first one where the transaction got signed by a miner, and by protocol they are produced, on average, every 10 minutes.

Hmm, please do write the correct form so I can fix it. I can't stress enough that here in Spain they don't teach the English language extensively

Edit: Found the error and fixed it  :D

I for one welcome our new grammatically correct (I mean incorrect, no wait... correct) topic overlords...  ::)

What are you talking about dude? It was a joke, I only changed my post's title nothing more, sorry about not being specific about it.

Btw, good luck with the bitcoin sales  :) will be recommending you to anyone who has an interest buying tea online, cheers

So was mine...


Also the transaction went through! Thanks to Chris Koss for taking the plunge and being the first person to try the new system!

I just ordered an ounce of Earl Grey Vintage.

edit - although I just see that vintage isn't what I thought. I assumed vintage meant classic, tea and bergamot, not rose. I'll give it a try though, my next order will be bigger.

Couldn't some of these problems be easily worked around if the popular exchanges offered an API that generated send-to addresses that would auto-sell at market? For low volume simple cases anyway.

eg. You put an image in your shopping cart that is generated from such an exchange API call. It says "Send 1.05BTC to 1ze656..etc" and that address is linked as "auto-sell" to your exchange account. And ideally the exchange sends a confirm email.

Now when a buyer sends that BTC there the merchant simply checks his exchange account that the USD were received, or believes the email confirm, and approves the sale.

Sure, it's somewhat manual but it's a simple feature that could help many low volume merchants accept BTC when they can't get full cart integration. And it improves liquidity for the exchange offering it as it will bring in trades at current market price.

eg. <img src="bitfloor.com?id=acctcode&amount=10.54"> is all the merchant needs to add much like a paypal button. The image gives amount in btc and address. The exchange tags that address as "auto-sell at market to this acctcode". It's a "magic address". Magic Computer Money should have magic addresses.

Some do this already.  With Mt. Gox, it is "autosell":
 - https://en.bitcoin.it/wiki/MtGox/API/HTTP/v1#Merchant_System

Also, the Checkout Buttons for Mt. Gox have a checkbox where you can indicate that you would like autosell (to have the bitcoins sold at market to USDs).  Here's a site using that -- see the "site-wide pass" at the bottom:

 - http://chipcollection.com/webstore/ordering.html

That's cool that as you hover over the button it updates price as market changes. Now if I could just think of a great idea that hasn't been done already...

I could not figure out how to make the mt. gox checkout button dynamic... When creating the button you have to put in a value... even if you change that value in the code they give you, once the customer clicks the button and goes to mtgox site the original amount shows back up again. This makes the button useless for shopping carts with different values at checkout.

The one you create using the Checkout Button web tool is only like a "pay now" button for a static amount.

For dynamic pricing, the ecommerce/cart script you are using calls the API to get the URL and transaction ID:
 - http://en.bitcoin.it/wiki/MtGox/API/HTTP/v1#Order_Creation

Then your template uses that transaction ID for the html form:
 - http://en.bitcoin.it/wiki/MtGox/API/HTTP/v1#Dynamic_Button

To use the API, you'll need an API key and secret that you've added to your Mt. Gox account created using the "Merchant" role.

Then those two pieces of data are used to build the request header.  It is a little technical (i.e., a little programming knowledge is helpful).
 - http://en.bitcoin.it/wiki/MtGox/API/HTTP#Authentication

I don't know how easy it would be then to tweak your shopping cart software to be compatible with Mt. Gox.  They have one shopping cart they work with -- Magento.  They've released their extension for it:
 - https://github.com/MtGox/magento

Here's an overview of Mt. Gox merchant tools:
- http://mtgox.com/merchant

Has anyone tried out the walletbit.com instant exchange functionality yet? https://walletbit.com/exchange

Seems to use MtGox to turn BTC into USD as soon as possible, so you dampen the effects of the price of BTC changing - i.e. BTC namely just becomes the payment protocol.

Not sure on fees, ease of use though.

Will you be accepting bitcoin payments for purchases at your physical location/store as well?

There is a pretty low-tech method for doing this available now. 

Launch a mobile app (Blockchain for Android) .
Click Request money.
For the amount, click the pen icon to enter USD amount.
After entering the amount it will show a QR code.
Tap the QR code to make it larger and present that to the customer..

Using a web-based EWallet this can be done as well, use Preev to convert USD to BTCs:
 - http://www.Preev.com

ssh into my robot's command terminal. Have him bring my cold storage bitcoin disk online, then ssh into that machine. transfer the bitcoins to my online wallet. close that connection and have the robot take the disk back offline. Then ssh into my online wallet and send them to the address specified.

I'm joking btw, I don't have a robot. I'd just call my girlfriend to do it :-P

That is a lot less likely to happen to the dollar then with bitcoins..

+100

Over the long term it is a lot more likely though, in fact with Dollars it's a certainty to lose at least half it's value in 30 years.

I think you are incorrect, but you are missing the point completely, which is that either is pretty unlikely.

Meanwhile, the dollar is already down FAR more than 50% vs Bitcoin in the last 2 months.

What are you comparing the Dollar to in this assumption, because when people say "bitcoins could drop in value by half tommorrow" the common assumption is that is compared to US $.  If the reverse comparison is also true, then the dollar has already drop significantly over the past couple of months alone, and by orders of magnitude over the past three years.

They are talking in buying power and Dollars have not halved in buying power in the last months.

Okay, but it has in the past 15 years.

Don't know about 15 but certainly 30 (0.975^30 = 0.468) see my previous post.

It's a ll short term versus long term. I can take short term variance but I can appreciate someone owning a small business might not.

Sure, and that's part of why we're all excited about BTC... but a fair observer has to realize that BTC is more volatile and speculative than the USD, EUR, GBP, or other currencies everyone here likes to dump on. The criticisms of those currencies can be totally legitimate, it's just important to temper our enthusiasm with a factual understanding of how far BTC is from being significant in terms of volume of real trade and stability.

Keep in mind to that there is no economy for bit-coins... I can not buy my products from my suppliers with bit-coin, I can not pay rent with bit-coin, I can not pay the power company with bit-coin...

So if the dollar goes down or up in value, it is reflected in the economy of the dollar. In 30 years a dollar will buy less tea, but our customers will also make more as a salary. And while I will make more per pound of tea sold, it will also cost me more to buy.

The reason that the volatility in bit-coin is such an issue for a business person is that we have to exchange them out, since there is no economy in bit coins. I would not care if the value of bitcoins dropped by half if my bills where also dropping in half (because I could pay them in bitcoin.)

People cant start thinking in bit-coins, (without doing the conversion in their heads to their local currency with every transaction) until there is an economy.

-David

PS... just an update for people curious, we have had about 5 transactions with bitcoins, it seems to be working well, thanks for inspiring me to start it up again!

But we can buy tea with Bitcoin, and that's a step in the right direction.

+1 I don't drink tea, but I'm recommending your business to all my bitcoiner friends  :)

I think for a business to properly take advantage of accepting Bitcoin - it should cater to a more international audience by providing as much info about labelling, packaging, shipment and possible customs hurdles as possible.

Specifically for nmteaco - I'm in Australia, and I'm reluctant to order because It's not obvious how the tea is packaged and whether it would get through customs.
(e.g are all ingredients labelled thoroughly so that customs doesn't classify some of it as unidentified seeds/plant material?)

The australian customs service website seems to suggest that the herbal teas will get through, if they are less than 1kg and 'commercially prepared and packaged'.
http://www.aqis.gov.au/icon32/asp/ex_casecontent.asp?intNodeId=8867894&intCommodityId=922&Types=none&WhichQuery=Go+to+full+text&intSearch=1&LogSessionID=0

I guess at the moment, providing extra info like that is a bit of a hassle - but down the track, when there are more bitcoin users globally it would surely be worthwhile.

We have never shipped to austraila before. But we do ship pretty regularly to New Zealand, the UK, and the ukraine (oddly enough).

Anyway, if there was some problem, you would not be responsible. Its not good business to charge people money for things they don't get! :)

Great!  I'll try a small order and see if it gets through.

I'd make sure to check with Australia customs about tea specifically. They are nasty nasty down there when checking things coming in and have been known to charge significant fines when plant material was brought in. They are very strict and I've run into it a few times because my sister lives there. Being that you live there I'm sure you know all about it - but always best to verify before running head first into Auz customs there.

edit: Oops. My bad - I see you did check already. I hadn't read up a few posts yet.

Why the ozzies so wacky about plant matter?

Is it drugs, or are they afraid of invasive species?

It's the ecological aspect.   Look at this map for an understanding. 

http://www.aph.gov.au/binaries/library/pubs/rp/1999-2000/2000rp09-01.gif

Australia is a large country, but its population is mostly densely clustered in a very small part of the country's land area.  Even slight ecological imbalances can create problems.   

I export vehicles to Australia, and learned early on that it's best to just go ahead and spend the money and have every vehicle gone over with a fine-toothed comb before bothering with the VIA paperwork.   They don't screw around over there, and will quarantine an incoming vehicle in a heartbeat.  Especially boats, which can have little bits of marine vegetation and such in places you didn't even know the boat had places.   


Frank

Not wanting to invite in invasive species I grok. Especially in such an isolated country.

Equilibrium takes an uncomfortably long (for a human) time to reacquire after that sort of upset.

Hey nmteaco, how is your 2nd try with BTC going?  Been a little over a month since you've set up the improved BTC receipts process, right?

Would you care to write a blurb about what's working better for you, and what (if anything) is still problematic?  Just curious...

 ;D

I'd be interested in hearing this, as well, especially the problems. If you never let us know about them, they can't get fixed!

...and now he's using Bitfloor.  :P That's a really shitty run of luck.

NMTea - I'm much more of a coffee guy than tea, but if you stick with bitcoin after all this, I'll order from you to support you in accepting this currency. What do you have that would be comparable to Peet's Yin Hao Jasmine?

Unless he is the hacker, then it's just poor tradecraft, advertising the services you're going to hack.

;) Just joshing you, NMTeaCo, trying to keep the spirits up.

Yes, I was using bitfloor, and I had not cashed out any of the sales yet. In fact I had more orders then I knew I had because my staff just fills them as normal, (I go in after the fact to do all the bitcoin accounting stuff), and I had not checked it in a few weeks.

Its funny now... rereading about how unlikely it would be for bit-coin to drop in value by half... well my bit coins dropped in value by 100%.

I just lost a few hundred dollars, so its not the end of the world, but it has left a bad taste. I am never going to maintain my own wallet, and do all that stuff by hand, and every exchange has been hacked... not sure whats left to do?

Hopefully bitfloor will come back online!



Jasmine:
Similar quality cheaper price:  http://www.nmteaco.com/Jasmine-Moli_p_168.html (http://www.nmteaco.com/Jasmine-Moli_p_168.html)
A similar price, but a better tea:  http://www.nmteaco.com/Jasmine-Pearls_p_169.html (http://www.nmteaco.com/Jasmine-Pearls_p_169.html)

Hire an accountant who'll work for Bitcoin? Honestly, I don't know. Someone should be able to help, though.


Same here! Good luck, man.

You shouldn't say never. Initiatives like bitcoincard, Ellet, and other attempts of air-gapped, dedicated-devices for managing bitcoins are popping up. Such devices would allow people to safely store their main wallet, even people which are not tech-savvy.


If you really don't trust your skills in protecting your money, maybe you should try diversification? Have multiple online wallets, instead of only one.
But IMHO you should take a look at stuff like Armory and its offline wallets. It's not that complicated.

Reading this makes me want to weep. Mtgox, Intersango, Bitcoinica, Bitfloor, I am aware of these before of course, but seeing this from a traders perspective is something new for me.

Nobody will use bitcoin if it always happens like this!!

I think its high time that some code was put in the public domain that will allow anyone to run an exchange with the security already taken care of.  As someone else said, allow the sunshine of public scrutiny to sanitize the code and perhaps there is a chance of avoiding the hacks! Perhaps we should also consider an injection of peer-to-peer which would (in my humble opinion) greatly improve the securioty both of the platform and of individual transfers.

Really we cannot keep recommending bitcoin to traders and recomending that they use exchanges that are not safe.

And with out exchanges that are safe and trusted, bitcoin cannot grow.

So we really need to focus on the exchange problem, because its a problem for everyone of us and needs to be solved, and evidence is that tomorrows whizzo exchange will have exactly the same issues as the old ones, unless this becomes the priority.

+∞

Its not only a matter of skill, I had a wallet a year and a half ago when I was first checking it out... Its a matter of what I want to spend my time on... even the online exchanges are a pain to deal with compared to just accepting a credit card. I have no desire to spend time keeping track of some file.

If bit-floor comes back online, I think the only answer is to just sell every bit-coin as soon as I get it. The issue with doing that is that it really ups the cost of accepting bit-coins, as there will be higher percentage of fees if im doing lots of little withdrawals.



I think the fact that it has not been a priority is because security is hard. Think how much money banks spend on security... And even with all that, the money is FDIC insured, just incase. Lots of people in the bitcoin community like to bad mouth the banking industry, credit card companies, and the dollar... But could you imagine if those things were run like bitcoin?! The world would fall apart.

EDIT:
I want to add something somewhat positive... this time we are in as it relates to bitcoins is really like the wild west. The bandits come in and rob the train because the people who run the train dont know any better. Overtime things will improve. But again, because this is all just a game, not a necessity (what choice did people have in 1850), who knows if people will care enough to fix the system before it crashes one last time.

This is an incredibly useful thread, with lots of insight. Sad about the retarded arguments of old (volatility doesn't matter if you live in BTC world LOL, the US$ might lose all its value overnight, etc etc).


It's really unfortunate that we have these issues happening periodically. I hope you don't give up just yet, and that you recover your funds.

What about the blockchain.info/wallet ?   This system doesn't have access to your private keys, because it only decrypts them in your browser when you log in.
You can get it to send an encrypted backup to your email - so even if the blockchain.info servers were to just disappear, you'd still be able to recover your bitcoins.

With the capability to 'pair' your account to an app on the android phone, it really is quite convenient.

Surely this would suffice to hold a few hundred/thousand dollars at a time until ready to squirt them into an exchange?

So it is a hosted wallet? Yes that would work. Ill look into it, thanks!

PS...
So it is more secure then the exchanges because they themselves dont have access? The only way for a hacker to get my bitcoins would be to hack my account specifically?

As long as you choose a long, secure passphrase, no one can hack it on their server. It's sent and stored in an encrypted format. They'd have to hack your personal machine and install a keylogger or something along those lines to get your phrase.

NMTeaco -

I just got into bitcoins myself a few months ago, so I can appreciate your current position on the learning curve.

I'd say that YES the blockchain.info wallet would be a great solution for your needs. All of the encryption & decryption is done locally on your machine and the operators of the site do not have access to your coins. Additionally, they email you encrypted wallet backup keys so if one day the blockchain.info site disappears you can still restore your bitcoins into another wallet.

Blockchain.info has a support/development thread on this site that is dozens of pages long and where they have provided plenty of details of their security measures and have satisfied this (very demanding) community.

For someone with your transaction volume, I think it's a no brainer to use their wallet and make periodic deposits on an exchange or do an OTC exchange via a trusted forum member where they send you a personal check and you send them bitcoins. The only other thing to remember is to NEVER forget or lose your blockchain.info wallet password as they cannot recover it. That goes hand in hand with the admins not having access to your coins.

Honestly, I don't really trust any exchanges very much and only leave assets on an exchange for as little time as possible.

Bitfloor was one man show run by a 25 year old guy with experience as a programmer, but no real business experience. He was grossing about $2500/month and living in New York City while being responsible for  $300k or more in assets. I don't see how he could afford to eat, let alone pay for security audits and the like, so the Bitfloor hack was a foreseeable disaster waiting to happen.

Edit: What jwzguy said above me is correct. He's just not as verbose as I am.  ;D

I think the new method for hacking is this whole social engineering attack... hack into twitter or facebook, get access to my gmail, then lastpass, then find wallet password... But I have the advantage of not being a big target, so its unlikely someone would go to all that trouble!

I am really liking blockchain, I created two wallets, one for online transactions, and one for instore transaction. Downloaded the ipad app, and have it autobackup both to email and dropbox. Password is a 15 character generated password from lastpass.

Wish I knew about them before. But we are back in business accepting coin!

I am also really impressed with Blockchain.info. They've done an excellent job. I just got their Android app and now I feel like I could go to merchants and demonstrate how they could easily accept bitcoin at POS. Their wallet allows you to import from many different backup formats and sync with the satoshi client. It offers many ways to back up your keys, as you mentioned. I just noticed they have a built-in mixing service for anonymous transactions and the nice big green buttons for depositing cash are awesome for showing ease-of-use (although the fees are too high for me personally.)

I only have one complaint so far, and that is that the Android client doesn't seem to have any security. I just got this phone so I'm still figuring it out....I assume there's a way to lock access to certain apps on it. That may be why they don't have any password on the app itself. But until then I can't leave it paired to my main wallet - anyone with access to my phone could steal all my BTC.

Like small cap stocks, Bitcoin prices are still volatile. But as it grows it should become more stable.

In the meanwhile, stick to Bitpay and their instant conversion to USD service.

Double Encrypt your wallet.


In Blockchain.info/wallet -> Account Settings -> Password -> Second Password

Awesome. Thanks for the help Stephen. This is exactly what I wanted.

Thanks for your order... I even got a text message from blockchain.info saying I got the payment.

As promised, I just made my first order. Thanks for sticking with us.  :D I'll get 4 oz next time once I decide if the expensive one is worth the extra money.

I notice that your shopping cart asks "what bitcoin address will you use to send the coins?"

If your bitcoin volume grows, this is not going to be a reliable way to identify orders since with a lot of wallets, it's hard to tell which coins are being sent. You are probably better off relying on pricing things to the 3rd decimal like you do already and hoping that no two people are invoiced at the same price.

I'm not sure of the best way to do it, because the coding is over my head. But my guess is that your bitcoin volume is low enough that having 2 invoices that are identical to the 3rd decimal place is unlikely to happen.

For everyone else: Go support this company! Buy tea for yourself and for your grandmother! His shipping rates are extremely reasonable, so buy a bunch in small amounts and try them all!

No - Thank YOU for taking so much of your own time to help us understand the issues merchants face in real life.

Also, it feels good to do something with bitcoins aside from gamble on blackjack and poker! ;D

I did not make that form required, But I figured it would just be another bit of information that might be helpful. But in most cases I can use time and value to figure it out.

In your case the wallet ID you put in matched the one that I received the bitcoins from.

As you say I would have to get two orders at the same time with the same value to be confused, and if that happened, it would not really matter who's was who's anyway!

And betting on bets on bets.

NMTeaCo, Thanks again for sticking it out.

It would if only one got paid, but yeah, very unlikely to be an issue at your scale.

Thanks for the update, nmteaco.  I think your experiences with BTC so far should serve as a wake-up call to the BTC community.

Now that all the "he just didn't know what he was doing" and "it's really not that complicated" and "the merchant was uninformed" arguments have been silenced, maybe this community will start to recognize that merchant adoption is perhaps the biggest obstacle to the success of bitcoin.  If merchants can't adopt it, BTC will remain mired in all the piss-ant drama that comes with the value of a currency being based on speculation vs fiat gambling (financial scams, ponzis, thefts, and security fuckups notwithstanding).

To be certain, I reject the argument that "merchant adoption will magically happen on it's own, sometime in the future (we promise!)".

Merchant adoption?  That's hard work...isn't it?  Yeah, it is.  But the reward of the hard work is that when BTC is made valuable to merchants, all of the rediculous ongoing drama that BTC can't seem to shake disappears like a fart in a windstorm.

@nmteaco, gotta say it again: thanks for sharing your experiences - and more importantly thanks for being patient with the small-minded who would so easily dismiss your problems WITHOUT providing any solutions.

ps - nmteaco...you know Breaking Bad?  (ABQ, yo!)   ;D

Great post, I agree with all of it.

I actually just eat at the Denny's that Walt was in at the start of this season about an hour ago. Its funny that in the show that Denny's is supposed to be in some other place, because its very recognizable as being in Albuquerque.

We really dont have that much meth in Albuquerque, and not nearly that many gang members! ;) Also I have never seen a tented house in New Mexico! They did get a few things right though, lots of people do refer to the area as "the 505". I do enjoy the show though.

Thanks...nice to know there's a like-minded bitcoiner here.


Yeah, I worry about the impression such a popular show might give to your city.  Hell, there is WAY more meth where I live, but you know TV...

The wife & I have spent a couple of weeks in Taos/Red River every summer for damn near the last 20 years, sometimes visiting close friends in ABQ on the way up/back from TX.  Beautiful place you live in.  (jealous)  I'll lobby for going thru ABQ next summer and look you up.   ;D

Anyways  wish you continued success.  http://www.xtremesystems.org/forums/images/smilies/thumbsup.gif

EDIT:  Now back to drunken troll wars! (https://bitcointalk.org/index.php?topic=106318.0)

My tea arrived here in Sydney Australia today - thanks nmteaco!

Customs opened the package to inspect - but apparently the inspection showed 'no items of quarantine concern'
I found this slip in the outer package:
http://cryptobond.com/misc/AQUIS_opened_for_inspection_small.jpg

The tea arrived in a vacuum sealed black package - which I assume is the original as it didn't look tampered with.
This surprised me a little, because I dont' see how they could actually examine it close enough to ensure it was what the label said it was....

Perhaps they were just ensuring it was properly sealed and professionally packaged?

I completely agree with all of this - I'm a geek and thus love bitcoins and accept the risks that come with it, how the average folk dont even understand it, they have had there fiat currency all there life, its what they know and trust - if bitcoin is to reach the mainstream, the risks that come with it need to be mitigated or removed completely - otherwise people wont trust it and will stay with what they know, shitty currency thats rigged.

That's great news! And the bitfloor hacker thanks you for your order.  ;D

nmteaco: I haven't kept up with the BitFloor news lately, but I heard they were considering allowing withdrawal of USD, since only BTC was stolen. Was most of your money there in USD? I'm not sure if you meant you hadn't sold the BTC from recent sales yet, or hadn't withdrawn the USD yet.

Many of the merchants that accept Square (using the dongle, possibly with Square register but mostly just the Android / iPhone mobile app) might also be willing to give Bitcoin a try.  This list of "bleeding edge" merchants is here:

 - https://squareup.com/directory  <--  Plug in your zip code (U.S.) and see what merchants you have nearby.

A good first step might be to visit one near you, and while swiping ask the merchant how much they are paying Square (answer 2.75%), if there have been any chargebacks, and then plant the bug in the person's ear about Bitcoin.  Having a mobile app (e.g., Bitcoin Spinner  or Blockchain for iOS / Android) handy and a QR code to scan (e.g., from a paper wallet - http://BitAddress.org ) lets you demonstrate right there how the merchant can accept bitcoins easily.  

(Notification to the merchant could come with SMS notification that Blockchain.info offers, for example, and there are other methods.)

Ouch.

Well, fortunately now there is integration with your shopping cart provider (3DCart)  which works with BitPay so that you don't have to be exposed to counterparty risk of doing it yourself through an exchange.  Looks like you're already doing this:
 - http://forums.3dcart.com/27113-post5.html
 

Any chance you'll be adding that capability for your visitors to your store as well?   I had pointed a Bitcoiner who was traveling through Albuquerque to stop in, but Bitcoin wasn't accepted for payment:
 - http://www.reddit.com/r/Bitcoin/comments/1ig126/im_working_in_santa_fe_nm_this_week_and_would_be/cb5d9wz