Bitcoin Forum

Hello everyone,

I am a long-time gold bug and a bitcoin newbie.  After learning more about bitcoin, I am eager to diversify my non-fiat currency portfolio with it.  My research so far leads me to suspect the cheapest way for Americans to purchase BTC may be through the LakeBTC exchange using "Ripple" to deposit USD.   I am hoping you can help with some newbie questions I have regarding LakeBTC and Ripple.

1.  The LakeBTC website lists a 0.2% fee for "Trading - Taker"   Is this the fee I would be charged to buy bitcoin?

2.  Is their USD to BTC exchange rate consistently higher than the rates shown at Bitstamp or blockchain.info?   [When I clicked on the "LakeTrader" link of their homepage, it displayed a BTC price of $238.11 when blockchain.info displayed a price of $235.37.]

3.  After buying bitcoin, would I have a LakeBTC web wallet from which I could transfer the BTC to any other wallet for a fee of 0.0001 BTC?

4.  Their tutorial titled "USD Deposit via Ripple" says I need to open a Ripple wallet, fund it with 30 XRP, and then find a nearby Ripple "gateway" that I trust.  Does this mean that I really have to trust the gateway to not steal my money?  If so, how is this trust achieved?

5.  The next step is to deposit USD to the gateway.   What fees, if any, are charged by the gateway for this deposit?

6.  The final step is to login to LakeBTC and request the USD be transferred to LakeBTC.    The tutorial further states "your Ripple wallet will show you the conversion rate..."   Does this mean that the USD I send will be "converted" to a different amount of USD?  

7.  What fees, if any, are associated with this final transfer of USD from Ripple to LakeBTC?

Regards,

MJS

I have some of the same questions as a newbie.

After doing more web research and email exchanges, I can attempt to answer my questions for the benefit of others....

1.  yes
2.   I'm starting to think so.
3.  yes
4.  yes.  The gateways appear to be established businesses, not teenagers running a node from their bedroom.
5.  0.99% + $0.30, maximum $5.00 per transaction
6.  I hope not. 
7.  None I think.

I welcome any comments/corrections.

Regards,

MJS

LakeBTC only accept usd deposit/withdrawal with Ripple, other currencies like cny or btc are not supported.  :(

Last time I used snapswap.us gateway they didn't charge the 1% or so fee.  They had a maximum fee of 5$, regardless of amount of deposit.  Maybe they have reinstated the percentage fee, I don't know.
You have to understand that dollars in ripple are not real dollars.  After you deposit with snapswap, you have snapswap dollars which are iou's.  Then you have to get lakebtc to accept these iou's.  There might be a market-making middle man involved who will charge you for the service of converting snapswap dollars to lakebtc dollars.  Go ahead an try it, but pay attention to what's on the screen.  If you are lucky there will be sufficient liquidity that no market maker will be needed, and all your dollars will go to lakebtc.

Bitstamp's a ripple gateway and Bitstamp USDs in the ripple network are really IOUs. When Bitstamp was hacked everyone was worried it would not honour its USD IOUs in the ripple network.

XRPs (ripples) are the only currency in the ripple network that is not an IOU and does not require you to trust a gateway.

Thanks for the responses and clarifications about dollars not being dollars!  I began using SnapSwap to deposit USD, using Rippletrade to purchase BTC.  I discarded the idea of using lakebtc.  Then I have used SnapSwap (or their BTC department) to withdraw the BTC.  Though I like rippletrade, I have not been entirely satisfied with the service of SnapSwap (e.g., due to delayed deposits and withdrawals), so I would hesitate to recommend them.