Bitcoin Forum

We are developing a new service that matches BTC spenders and BTC buyers through online retailers (starting with just Amazon).

Spenders: Bitcoin user who want to purchase items from major online retailers using bitcoins at a DISCOUNT.
1. Enter URLs of their amazon wishlist (e.g. http://amzn.com/w/32ARMOSOZDQYV).
2. Fund account with sufficient bitcoins.
3. This creates an semi-anonymous "spend order," with which buyers will be matched with.

Buyers: Users who would like to acquire bitcoins easily, using credit card, at a reasonable premium.
1. Enter in $ amount of how much BTC to acquire, creating a "buy order."
2. GBSB matches the buy order with a spend order.
3. Buyer receives the URL to the wishlist, and makes the purchase for Spender (no personal info is shared with buyer)

After Spender receives the item, he confirms with GBSB, which releases the bitcoins to the Buyer. This essentially makes us a streamlined escrow service.

Currently, we'd like to get a small group of both buyers and spenders to test our service, and provide feedback about the usability of this service. As an incentive, early adopting Spenders will receive a discount on amazon purchases of 5%, and Buyers will only pay a 5% premium. Buyers must have Amazon Prime.

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Awesome. 8)

Neat idea!

Do you think it's necessary to offer a discount to BTC sellers since this service allows them to use their coins somewhat anonymously without any conversion / transfer fees?

Anyway, I have a Prime membership and am a bit of an Amazon junky, so I'd be happy to help you test.

I wouldn't say necessary but,
1. getting bitcoins is quite a bit of work
2. Getting it usually has some fee associated
3. Things should be cheaper in bitcoin since no cc fees and fraud to deal with
4. It would being more people into bitcoin.
    a. For example, people who came in during the bubble and since left, can use their gox account to acquire bitcoins at a 0.6% fee, and spend it at amazon for a net 4.4% discount.
    b. Slickdeals users often go out of their way to get the best deal possible. Hot deal posts often often say "oh btw, use x service for a 3% extra cash back." Now they can say, "oh btw, save 5% if you pay in bitcoin." Furthermore, this deal went front page few days ago. SD is a diverse community and definitely there are those who thinks something is wrong with fiat. People here might also be interested: http://slickdeals.net/f/6066316-5x-2013-1oz-Silver-Eagles-for-134-shipped-via-eBay-26-per-coin? 

Regardless, these fees are adjustable so we'd just adjust them according to supply and demand of either side.

Why do buyers need Amazon Prime? That automatically prevents non-Americans (like myself and many others) from using this service.

We are just beta testing with prime only, as it helps speed/smooth things up. We will expand to other services and countries.

The other main reason for prime, is because for the buyer side, we want to target those who want the most painless acquisition channel. The goal is for the buyer to spend no more than 10-15 minutes on this site, use credit card, and receive his coins in 2-3 days. That cannot be done as of now.

Have you looked into any possible violations of Amazon's Terms and Conditions? The idea you have is pretty brilliant, and I look forward to when you start rolling out to other countries (Australia)!

What about chargebacks?

Haven't seen any obvious violations.
Fraud (chargeback) is handled by Amazon, not us. From the spender's perspective, the item will be in his possession long before any chargebacks occur. That doesn't mean we will be completely negligent and allow rampant stolen cc usage. We will enforce some verification process, feedback, and optional verification for better rates.

That makes sense, and I see where it could potentially drive BTC adoption in these "deal" communities. Looking forward to testing!

What if there's no exact match, which I'm assuming would make up the bulk of the order list.  For example:

I want to acquire $150 worth of BTC.

Spender X wants an item that's $45, Spender Y wants an item that's $100, and Spender Z wants an item that's $55.

Would the system:

Accept Spender Y's transaction, shipping him the item but leaving me with only $100 of the BTC I wanted to purchase, or;

Accept Spender X and Y's transactions, shipping the items but leaving me with only $145 BTC, or;

Accept Spender Y and Z transactions, shipping the items but now leaving a $5 BTC debt on my account?

To start, we'll just match something close. It would be difficult to find an exact match down to the cent in any scenario.

In terms of how to get a large buy order filled with many small ones, I think user feedback will help us eventually decide.
Different ways include:
1. Just list the highest valued wishlist available and force buyer to create several buy orders. (Currently what we have in mind)
2. Give buyer a list of spend orders to choose from (privacy might be an issue if a buyer can browse many spenders wishlists without committing to buy anything)
3. Match a buy order up with multiple spend orders (may be problematic in case of disputes)

Appreciate the questions you guys are asking as it allows me to rehash these things.

No you'd pay for both items, which is $155, and you'd get that much in BTC. There's no way to pay for $150 when buying $155 on amazon.

I have an amazon prime account and would like to participate in the test. Let me know if you are still looking for testers.

This is a cool idea. So you can finally buy Bitcoins with a credit card!

Definitely. Watch this thread as I'll be posting invite codes here.

Are you limiting this to amazon.com or do you also want to operate on amazon.de and amazon.co.uk?

No reason why not to expand to as many countries/services that has a similar wish list function. But first things first and that's to work out the kinks for .com

Quite cool...I had this idea a while back and wondered why nobody was doing it.

Interesting enough, BitSpend got blocked from buying from Amazon for doing a pass through from Bitcoin to Amazon purchases.

This may be a good solution having it more decentralized.

You could easily do what BitSpend does in a p2p way like this for all websites. Just cut the profit with the buyers.

I would help test but I do not have a prime account. And I cannot think of anything I need on Amazon very soon.

You point out many of the same things I've considered.
Prime accounts are abused when buying from shared wishlists.

Definitely looking for several amazon junkies to test from the Spender side. The price of items hopefully in the range of $25-$50 during testing.

This is really big. 8)

Everyone wants to pay less (5%) of items they buy, or for any other bills.
People who wants bitcoin also ready to pay more (5% - 10%).

This is not just amazon specific business opportunity.
This can be implemented in every country.

You said it. It is essentially a distributed btc market place. Just so happens that Amazon makes it really easy, especially for new bitcoin users. It makes a good start on 1. Optimize work flow and 2. Get users used to the idea of exchanging goods for BTC. So happens that current conditions allow turning USD->Goods at a premium a reasonable request. With reward cc's like Amazon's card, the premium will be very competitive with other services. https://www.chase.com/online/Credit-Cards/amazon-earn-points.htm

Quick preview: https://i.imgur.com/D0mvKvk.png

Hope to start with ~10 testers next week.
Spenders: post your wishlist here or in PM, prime eligible items only please
Buyers: please have Prime

I am usually available on IRC in the usual bitcoin channels if you'd like to chat.

Very interesting idea. I buy a lot on Amazon with Amazon Prime, and I've been a professional seller on Amazon for several years (I hope to have a Bitcoin product available with Amazon Prime in a few weeks).

I'm not sure if I totally get it, but here are a bunch of questions I have about the longterm plan (answer only if you feel like it, or simply use it as food for thought):

How will the BTC price of the transaction be established? With BTC being so volatile, this seems tricky, and possibly one of the participants may not get the deal they were looking for.

Who do you believe wants to pay a 5% premium to get bitcoins? Seems there are very established/trusted ways to buy BTC for much less, and it's really not much work to sign up for say Coinbase or CampBX (just to name a couple). Do you believe there's a benefit of getting BTC through your service that I'm not seeing?

Seems everyone who participates is at some risk, since a middleman could grab bitcoin, get product sent to friends, and take off (I'm not saying you would do that, but seems you could do that). Or a middleman could get shut down, mid-transaction. Do you have a plan to assure participants of safety? Will you and your business be anonymous?

Have you consulted with a lawyer? Seems many sites that helped people use coin for Amazon have come and gone, I figure there must be good reason.

Do you have a plan in place for when a buyer wants to return a product (say it's defective, or just crappy, or whatever)? Or are all transactions final? Seems you'll have to lay out a ton of ground rules, and I can't help but think people will figure out ways to game this in some way.

As a paranoid worst-case-scenario thinker, you can see I came up with a lot of concerns. I think I would really want to understand all this and feel good about it before even evaluating if it made sense. But perhaps I'm missing some benefits, perhaps for people with different circumstances than my own.

We will explore 2 options:
1. We determine the price at the time Buyer initiates transaction. Spenders fund account with let's say 100% price in BTC, which gives him some room to handle volatility. If BTC prices drop significantly, then his account is no longer sufficiently funded, and his order will be removed from order book.
2. Price is set at the time Spender placed the order, and the Buyer can always refuse to accept the order if the price of BTC has shifted enough to make it too unfavorable.
In either case, we would like the site to operate in such a way that a majority of orders can be expected to be filled within a day. Additionally, I've been thinking of lately of how we still rely on mtgox price as the "value" of bitcoin when their daily volumes are often 10-20k. The bitcoin economy has outgrown this and we as a community should look into better ways to determine the value of bitcoin.

In both examples you gave, bank account info are required. Unless you trust coinbase with your bank account password, to verify account ownership takes several days. It also suffers from the 10btc/day limit. Credit card cannot be used to purchase, and GBSB can potentially be anonymous by using store bought gift cards. In any case, you will never have to trust us with your personal info, as we will never require you to provide it to us.
I'd say from the bitcoin buyer's perspective, this service is more comparable to bitinstant. With major differences being 1. Rate of exchange is known prior to transaction, 2. Longer wait, 3. Do not depend on other exchanges. 4. Never have to leave the house.

I'm not sure what you mean by middleman. There are 3 parties involved in these exchanges. GBSB, Spender, and Buyer. If you mean GBSB=middleman, then yes, there's always counter party risk when using any bitcoin service. Products cannot be sent to anyone besides Spender's input address and still have a valid tracking #. If GBSB is shut down, we still retain all contact info and bitcoin withdraw addresses to refund users.

What do you mean by safety?
We will be a registered LLC, so no. Customers' anonymity will be preserved however.

Yes because they are buying the items themselves and abusing Amazon Prime. This services leverages the wishlist functionality, which doesn't require us to conduct any business with Amazon. With that said, yes we are consulting lawyers and will do everything to avoid any cease and desists from Amazon.

No returns is current policy. I agree there will be many ground rules and procedures for Spenders(which will be well documented), and hopefully that the discount incentive is enough for them to overcome that. The process will be designed to be much simpler for the Buyer. There will always be ways to game any system, and we can only learn and update as we go. Eventually, we want to develop into a more open exchange that allows users to set their own rules, pick their own escrows, and take full responsibility of their own actions.

Thanks, I appreciate your thorough answers, they totally make sense. You've clearly thought this out quite a bit, and I appreciate that!

What's GBSB? Great Britain Sewing Bee?!  ::)

getBspendB

Ok, I didn't check your profile pic. :(

Looking for 1 tester as a spender who will want multiple items on Amazon and can provide good feedback. I'll be personally fulfilling your orders. You'll be getting a 7% discount for everything you buy (up to a reasonable amount) in exchange for testing :)

So you want someone who wants to buy stuff on Amazon using Bitcoin? And the USD equivalent will be based on last Mt. Gox trade (not that this detail is vital, just curious)?

Correct.

What I've used before is at http://btcdx.com/ is the (vwap + last)/2 price. It has been pretty good for transactions that take more than a day to complete.

Yet another bitcoin bootstrap site... Yawwwwn.. Tired of bootstrap

I think this is a great idea.  I'd love to try + I have amazon prime.

Why do you say it's bootstrap? It's in fact Foundation. Everyone's tired of bootstrap, including myself.


Does that mean you'll test as a bitcoin buyer?

btw, question regarding privacy vs transparency.

The goal is to be as transparent as possible to increase confidence. I'd like everyone to basically be able to deposit into their address, and allow their transactions to be tracked via blockchain. However, that might create privacy problems as addresses might be monitored. Would you guys prefer all funds to go through a central wallet before being redistributed in order to obscure individual transactions?

If people really want privacy, couldn't they take steps themselves to try to hide their tracks? In which case, being transparent might be the way to go, and those wishing to privacy can figure out ways to be more private.

(I have zero experience at trying to be private with Bitcoin transactions, so my apologies if I'm oversimplifying it.)

what would you like to see in terms of transparency?

I was just agreeing with the transparency as you presented it, to increase user confidence in your new service. Would be good if you could get more feedback, maybe some people prefer the idea of privacy.

We are just about ready to beta test with 20-50 users in order to collect feedback. If you're interested in testing, simply fill out this form: http://goo.gl/f8DyYG

Beta launch announcement here with a very thorough description: https://bitcointalk.org/index.php?topic=307922.0
Please sign up!

Cool idea. As you are offering discounts which is even better

Sign up for beta! We need testers.

Back in May, I was asked to help start a business that would solve 'the exchange problem' for Bitcoin, and I came up with something very similar to this (in June, in fact!). For legal reasons, the interested parties decided ultimately not to pursue the idea, so I am so glad that you are!

After asking my former partners, I will now share some of the significant differences in our b-models, and why I think you should steal these ideas for yourself and bring them to life!

1] Allowing users to set their own exchange rates (as is done on LocalBitcoins, with option to peg to an exchange's price), offers you many benefits. The largest is that users will automatically adjust your "SAVE 6%" parameter each moment of every day according to changes in both market conditions and the unique preferences of each Buyer/Spender pair. Those wishing to make large purchases, or those desperate to have orders filled quickly, should have the opportunity to offer whichever longshot exchange rate the market will bear. These longshot orders will draw both Buyers and Sellers to your site and increase the desperately-needed liquidity of this marketplace. Setting something at 6% is arbitrary, rigid, almost certainly the wrong number, and most of all completely unnecessary.

2] Charge exactly 1% of the traded volume, because 1 is the smallest number, simple, and easy to remember. Rank users (anonymously) based on how their cumulative total of fees paid (as a reputation/feedback-type system). Save users the trouble of 'buying and selling' objects to themselves to increase this reputation buy just allowing them to purchase reputation directly in the form of a donation to GBSB. Such a costly signal will credibly indicate a user's seriousness to his or her target-counterparties.

3] I feel that there are numerous opportunities to improve communication of your value proposition. We decided to emphasize:
-Purchase Bitcoins ANONYMOUSLY via CREDIT CARD (yes, it's possible)!
-Spend Bitcoins on WHATEVER YOU WANT with COMPLETE PRIVACY!
-Reliability (much harder to close down, or encounter bank trouble (as happened to BitFloor, BitSpend, etc. because you do not move any fiat around).

Currently, your webpage does not discuss these (amazing and monopolistic) benefits, and has that 6% fee information, which will probably confuse and frighten most users into thinking that both Buying and Selling will land them with a (big) 6% fee. I think opportunity for improvement here.

4] None of my partners were lawyers, but according to our research, the business would 'accept Bitcoin from one party and send them to a different party', which would probably classify the business as a 'money transmitter' entailing a world of legal hurt, unless we lived outside the US or ran the site from TOR (ie, illegally). We discussed that another solution would be not to use a website at all, and use simple, open-source software tools once the marketing phase was completed.

5] We had some screenshots on what the user was required to do for their Amazon wishlist, which included a] setting the Wish List Privacy Settings to "shared" (required), and 2] setting the Wish List Profile's address (required), and "Don't spoil my surprises" settings, etc.

6] We had a "How it works" section, one draft looked like this:


1. Placing an Order
   a. Alice is browsing Amazon and wants to buy an 'All-New Kindle Paperwhite'. She checks out the tax and shipping and sees that it there is a free shipping deal, and no tax, so the total USD cost for this will be $119.00.
   b. Alice checks out the Bitcoin price, on NAME and around the internet, which seems to be around 125. However, knowing that NAME offers other advantages to BitBuyers, Alice decides that she'd like to try and pay just 0.9 BTC ($112.50) for the Kindle.
   c. Alice sets up an Amazon Wishlist containing the Kindle (see Setting Up Your Wishlist).
   d. Alice begins to Place an order by submitting the following information:
      1. USD Value: 119.00
      2. BTC Value: 0.9
      3. Amazon Wishlist: Link: http://amzn.com/w/Qzzz
      4. Requirements: None
   e. Alice pays (1.01 * 0.9) = .909 BTC to an address we provide, thus Placing the order.
2. Claiming an Order
   a. Bob is browsing NAME, desiring to buy about $100 worth of Bitcoin.
   b. Bob sees Alice's order for .9 BTC at a USD cost of $119, implying a rate of 132.2 USD/BTC.
   c. Bob finds the rate and amount acceptable, so he Claims the order.
3. Filling an Order
   a. Having Claimed an order, the clock is running for both Bob and Alice. Bob now purchases the contents of the Amazon wishlist using his own credit card/paypal/M-PESA/whatever, and has them shipped to Alice. Notice that Bob can do this without knowing Alice's address, and Alice recieves the Gift without knowing anything about Bob at all.
   b. Upon receiving the contents of her wishlist, Alice leaves positive feedback for Bob.
   c. Bob leaves positive feedback for Alice, and the funds are released to Bob the same day.

With the transaction complete and both feedbacks entered, the feedbacks become visible on the site for people to use in assessing users.

If something goes wrong, instead of leaving positive feedback, either Alice or Bob flags the transaction for moderation.

7] We also had a Who Knows What table/infographic that had rows "BitBuyer","BitSpender","NAME","Merchant", and columns "That the transaction involves Bitcoin","BitSpender's name/shipping-address","BitBuyer's name/credit-card-information", with appropriate green checks and red X's.

8] Since you sort of need to trust GBSB with holding your Coin until the order is fulfilled, we thought about doing random promotions, where anyone with an open order could win a prize.

9] 4th of July Freedom party and what have you.


Anyways, that's all I can remember for now, I had all kinds of ideas for stopping competitors and expanding globally, but I can't quite remember them in detail. It was a long time ago.

Good luck!! I can't wait to try it!

WOW! You are amazing sir. Here's the main announcement thread, and it's ready to be used immediately: https://bitcointalk.org/index.php?topic=307922.20

I have considered a lot of the options you have. PMing you for further contact.