Bitcoin Forum

Hi,
I was thinking of opening a shop along the lines of silk road for my country. I've been in this business for a while and think this currency could solve a few headaches for me. I had a few questions though.

Since I usually sell in euros, and I would have to set my price based on the eur/bit conversion rate, where should I get this rate from?
(different views from mtgox/bitcoin exchange etc.)

With the wildly changing value of bitcoins due to speculation, I would be trading real goods for potentially worthless coins as opposed to hard cash currently. Is this a risk I can avoid? The general consensus is that this will even out; what kind of time frame (I know that by offering goods in real terms does help this so Im onboard)

If my business takes off under the new currency, could I set up a legitimate currency exchange along the lines of mtgox in my country to float in and out of the real economy? Or would I be better just pitch bitcoins for cash using the highest market exchange rate + 2%?
(Or something similar)

I want to believe in this thing. I used to run a head shop online before paypal decided they didnt like my (fully legal) business model.
I would like to not have morals pushed down my throat by the monetary system when it so obviously corrupt itself.
Just trying to assess the currency risks.

Thanks for your help

check out the anonymous money, anonymous exchane article on weekly.co.nr

If you don't want to take risk of bitcoin price fluctuations, you should quote your BTC prices using actual exchange ratio and "hedge" yourself with counter trades on mtgox. That means - immediately as you accept bitcoins, you sell the same amount on mtgox.

This can be fully automated and then you can receive Bitcoins, but don't take the exchange risk.

You could use CoinCard (http://coincard.ndrix.com) to automatically convert your BTC into a PayPal payment to yourself.  The fees are about 1% on large transactions.

Unfortunately, a lot of the world's commerce is still tied to the dollar, and the most liquid BTC exchange is USD-based.  I use the following script to retrieve recent trades from MtGox.com and calculate a volume-weighted average over the last 48 hours.  This gives an exchange rate of BTC<->USD which is reasonably steady and is based on the most liquid (currently) BTC exchange.  You could modify the script to pull in the current USD<->EUR rate and then use it as a basis for setting prices.


[edit] Oh, and please do consider setting up an exchange in your area!  The more the better.  There are a number of directories of exchangers:

https://en.bitcoin.it/wiki/Category:Exchanges
http://bitcoincambio.com/exchangers
http://tradebitcoin.com/

You can either use one of them or list yourself if you set up your own.

Thanks for the tips. yea, exchange rates would be half the problem, but a currency conversion from euro to usd to bitcoins is just a lot of hassle. if the business worked out, I imagine I would have a lot of bit coins and taking time to change them with mtgox or the like would be  a hassle. So setting up an exchange or a cash for coins where I am would be a massive compliment to my business anyway so is definitely the way I would like to go. I suppose I could do both until i reached a critical mass of say a few thousand coins, then start small exchange for up to 300 euro or the like. Im sure there would still be enough cash to hold the business afloat while i build up that side of it.

Bitcoin-central exchanges bitcoin to euros: https://bitcoin-central.net/

Not as much volume as Mt Gox though.

And their source code is open. You could use it to create your own exchange if you want.

I'm very interested in offering bitcoin for cash locally, but not wanting to do any speculating.  Any chance someone would want to automate a white-market website like this?  I'm happy to offer up real world identity and earn trust the old fashioned way--I just don't want to headache of watching the market 24/7 and don't have the technical skills to implement this myself.

What _exactly_ do you need? The actual BTC/USD quote is available on mtgox and if you want to cover the risk with counter trades, you can do it by few clicks. You can even counter trade the amount firstly on the mtgox and then use the final rate as input for your real-world trade.

Can't get on that bitcoin central at all... Anyone loose money there?

Getting a FFUU reddit face.

This is essentially what I do now for the 5 or 6 people I've helped out--purchase the coins first, then deliver them.  This limits my buying power to the amount of USD that I tend to have sitting in my Mt. Gox account (happily not much since I put that straight into Bitcoin as soon as I got it there and it's done beautifully since), or puts a significant delay on if I use something like bitcoin4cash (since I have to wait to see if the cash got lost in the mail.  happily it hasn't so far, but the process still takes weeks).  I already run a business, so liquid capital sitting in dollars somewhere is a waste for me.  The advantage of a trust relationship would be that I could sell coins with a decent turnaround, and then send the cash I took in from the customer on later.  Obviously, this isn't a service you'd want to offer anonymously.  But I'm new to financial services in general so maybe there's something I haven't thought through here.

http://www.tradebitcoin.com/

Already on there :)

Obviously there are lots of trading risk. One should be careful in trading business. You have to believe in this thing.