according to the article above just over $20 mill goes through silk road a year.

yet going by http://blockchain.info/stats

$26mill of bitcoin transactions went around the world IN ONE DAY!!

so please media people dont think silk road is the main use of bitcoin.. its just 1 out of over 365 uses. if you just base it on the cash volume moving around.

but if you base it on the number of websites theres THOUSANDS accepting bitcoin. bitpay have atleast 2k businesses on their books, along with other webstores with their own personal carts and methods of fiat conversion.

silk road to bitcoin is like what 'walking street' in phuket is to the Thailand baht.
silk road to bitcoin is like what the red light district of Amsterdam is to the EURO.

yep a great time to buy coin at $7 and hold it for the rise

then those redeeming at the now $90 can get a nice amount of bitcoin and u have left overs for busness profit or future customers.

or left as a reserve to counter any more volitility/future purchasing power

well if its free electric and you would continue paying rent whether the building was in use or not. then of course using the office as a location for your mining rigs is more beneficial and profitable then doing it from home.

but now you have to think about the equipment and maintenance costs. as well as any "business" costs with registering as a business and all the health and safety regs you will have to abide by, due to having a large scale electrical units housed in these offices, producing excessive heat.

bitcoin foundation already have great PR people.. the crew behind bitinstant are great spokespeople.

and i know atleast one of them is highly involved with the foundation.

if you ever watch any of the public speaking that the bitinstant crew do, their words at these events alone prove my points validity..

i have seen when a mega price dump happens they turn off selling coins or put a warning that their stocks are low. after all why sell coins at a loss

the FPGA is not really hard work to achieve.

look at Ztex.de.. its all there for anyone to do. and has been available since before BFL even became a corporation paying their $50 to buy the brand name...

https://bitcointalk.org/index.php?topic=40047.0 (august 29th 2011)

so its not like BFL ever done much research, just development costs mostly.

fuel costs..
well im talking about the day you finally have the cardboard "GIFTCARDS" in retail stores. where people want to waste car fuel to get their "giftcards" by walking into walmart or a 7-11

offering an online facility is not a GIFTCARD but more simply a redemption code via email/webpage.

which if we take away the whole car fuel go to retailer blah..

lets use blockchain.info. if i put in $100 into blockchain.info wire transfer.. id still get a better rate..

yes but still stipulating ON YOUR SITE that resellers may add on fee's protects you.

secondly when you want to go to walmart or 7-11 if you dont have that stipulation then they would want to sell a $100 card to customers at $100 and then buy the card wholesale from yourselves under $100.

by having terms in YOUR SITE you can protect yourself from resellers demanding a under $100 wholesale price.

although i find the reseller additional fee a flawed business model, i have tried to atleast compensate my thought process to aid your current model and get to a middle ground that atleast removes future headaches you may come across sticking with your business model.

but as i said last week buying at the mid $70's holding it as a reserve to then sell a week later would net you profit without having to have silly +10% gox prices or giving the customer less bitcoin then they expect.

i do agree though that a simple you will receive 1BTC for $100 is better then lots of % and + symbols spawled across the pre-redemption page.

the only issue i still have is that in england i can still go to my local post office visit a moneygram cashier desk hand over the money, be given a code. type that into bitinstant.com and get bitcoin at 6% of the ACTUAL money i have put in.

so a $109.99 customer payment for a product that has a $100 tag but ends up as a under $100 allotment of bitcoin, still seems excessive.

but hey.. baby steps, you'll get there

you will always find that those that want to keep coins cheap for a while will tell you not to buy, or infact try to tell you to sell so they can buy in cheap themselves.

precious metal guys will also say that bitcoins are the devil because unlike 30 years ago when the only alternative to fiat hoarding was precious metal. which helped the precious metal hoarders know there would always be a future demand. suddenly now realise that not everyone will be converting to precious metals, making their heavy hoards less desired and demanded. and obviously less valued in the long term.

so you will always get many people saying why not to buy bitcoin.

take this guy. his first video was hating bitcoin because he is a precious metal hoarder and has no desire to ever buy bitcoin
http://www.youtube.com/watch?v=vRnP2Vj7ppw

take his own quote as gospel "never take anyones word as gospel, especially those who own it and sell it" so that alone is a reason not to favour silver over bitcoin. as he wants you to desire his silver more. and for a precious metal lover he seems to have looked quite deep into something thats not a threat to his metal hoard.

he goes on about how he has no emotions towards bitcoins. yet then makes a dozen more videos about bitcoin. i do not fear termites eating into my home, it is possible to happen. but i would not get emotional enough to make several videos and researching something that i think i wont want in my home.

couple weeks later.. he now has bitcoin and has confidence in bitcoin, but now wants to scare people about the alt currency litecoin.
http://www.youtube.com/watch?v=JI2LVH4JfV0

the lesson to learn is those shouting propaganda have a hidden reason

its about trust.

first of all..
if you try to do a paypal trade then forget it.
traders wont deal with unverified paypal so you need a verified account. to have a verified account on paypal you need a bank account. which brings up the question. why prefer to use pay pal over wire transfer in the first place.

the answer on many minds is charge bank fraudsters. only a small amount of OTC traders will take on the risk of a paypal trade.

so attempting to mention the phrase paypal in the same conversation with trading will cause people to suspect you even without knowing the details.

secondly people do trade on otc, but if you only want 1btc the hassle involved with dealing with someone remotely will have a higher price for a small amount. so its better to just use blockchain.info, dwolla, moneypack etc.

OTC is turning more into the wholesaler place where people that want bulk who have trusted experience and have a trusted method of payment get the good deals as there is obviously less risk, less headaches and they can spread their profit margin across multiple coins to give others better deals.

everyone else has to use the "retailer" sites like local bitcoins, bitinstant etc

you could ask for his IP, but in the end everyone knows his address, name, family, how much the mortgage of his house is, his previous court appearances. so knowing his IP is meaningless now.

what needed are those that actually got defrauded by him to pull their finger out and use the information legally. else there's no point going on about it and just leave it as a lesson learnt.

+100

nope. from what has been read. alot of people invested at the time on avage $1000 each. so then wasting another $1k on flights or a couple $k on investigators, court fee's etc is not in their interest.

some people were not socially outbound enough to want their names made public or form a class action suit.

then came whispers of the SEC being interested already, made those few people that would have put money into a court case, decide that it was no longer required to spend their own cash and leave it in the hopes the SEC will do something.

the short of it..

no one bothered. alot of doxing and remote harassment with trendon and his family. but no one went to him to slap him across the face with a wet fish face to face.

lesson to learn. if its gonna cost you alot of money slap the person you are dealing with, with a wet fish face to face if they break the deals contract. then think hard and deeply about doing the deal.

the itunes $50 CLEARLY  states why its $59.99 on that website.

"activation fee"

its not just showing on one page $50 and at the checkout $59.99 without giving a good reason.

so please do the legal bits...

its called terms and conditions, descriptions, transparency, crossing the T and dotting the i's..

you wont expand your great product into bricks and mortar retailers in your current form.

you think i say all of this because i am trying to tell people not to use your service .. no i am not.

i am telling you in as plain english as possible to UP your game, as you can make alot more money long term by changing the back end of your business model and atleast looking beyond your daily profits, to think about monthly/yearly profits you could make. aswell as expanding your brand name.

if your not going to do a "reserve" business model where you buy while cheap to then profit later, but instead copy the business model where retailers add on a "activation fee" that will lose you some browning points when going into meetings with retailers, as they love a cut of the retailer advertised price.

but not having and T&C to be transparent also will hurt you, as the retailers will see lots of pitfalls that customers can use and abuse.

having a "if you don't like it, don't buy from us" mentality instead of a functional business brain that is searching for idea's suggestions and criticisms to improve your brand. or if you simply cannot handle criticism which is actually beneficial to your product. makes you not a wise business man.

i will make it simple in laymans terms so you can tart it up into the proper legal terminology

Terms and conditions
Some retailers may charge an activation fee,delivery fee or service charge fee ontop of the advertised price, to cover the costs outside of giftcoins.me control.
Please be aware that the redemption rate is based on MTGox +10%, the actual redemption value you receive will be able to be seen prior to redeeming your card.
Due to the nature of these products a refund is not possible after a redemption has occured.
for more details of our policies please contact us at: <your email>

feel free to add more terms and conditions to cover your back if you can't be arsed to change your business model.

i am glad you have moved one step forward by promising a pre-redemption valuation. thanks. now a few more steps forward and your brand name will have no issues expanding.

P.S my first post mentioning the reserve model the bitcoin was at $75 and at one point dropped to $68. it is right nw $88. you could have bought 100 coins and held them for one week and then given people redeeming their coins at $88 a more accurate $ vs BTC and still had BTC left over for personal profit.

a profit of between 15%-23% giving the customer a proper at mtgox value or even more profit by keeping your % above spot. but hey you know whats best.. lol

its nothing new. regulating the fiat side has always been a thing that most countries do. bitinstant already have stuff like this covered, as do the other legit exchanges.

its just now that governments are mentioning the terms "virtual conversion to legal tender" instead of the old "other currencies, digitial, or foreign to legal tender" blah blah. the SEC/FSA laws have been the same for ages..

so if you want to cash out to FIAT then expect more of the same from the likes of bitinstant, dwolla for amounts over a few hundred euro, dollar, pounds when using exchanges.

but if you wish to convert bitcoin to litecoin, name coin, dev coin or any other virtual. or vice versa.. you will remain unaffected.

imagine itunes selling their $50 gift cards advertised at $50 in walmart but the walmart checkout operator says to the customer that it will cost $54. then being told "if you dont like it, dont buy it"
imagine the customer got home and found out that music tracks at normally 50c, where the customer thinks he can redeem 100 songs. is surprised to see only able to redeem 45 songs.

now ill give you 3 options to try.
1. build up a reserve, to pre-buy coin on the cheap(during a dump)and hold it for the later redemptions that are higher value.
or
2. raise your "spot price" to an amount to both cover your profits and the profit margin a bricks and mortar retailer would want to receive. thus not requiring a reserve.
or
3. carry on as you are and wait for complaints at advertising standards agencies to begin, then watch what happens to your legit business when all your funds are frozen and you are stand infront of a courtroom.

now to put the 3 options into the itunes scenarios legally.
1. itunes does a deal behind the scenes with recording companies to reduce the songs wholesale cost to under 40c so that itunes makes a profit, where they sell it online (10c a song profit). also the cost price is low enough that itunes can produce cards and sell the cards to retailers so that customers can purchase them for $50 knowing they will get 100 songs.(5c profit to retailer 5c profit to itunes per song)
hang on..... wow thats exactly how itunes does it.. wow that must be a shocker to you.

2. dont do deals behind the scene but have advertised on the card that the $50 card would not give them 100 songs, but would give them 10-20% less songs to cover the convenience of buying locally.

3. ignore words such as honest pricing, transparency, retail law, contracts of sales. and wait and see what happens

also to note this is a statement on apples own website

hmm lets see what walmart says, and 7-11,, oh look they have fair prcing policies too...

wow.. i wonder why

by specifying a retail price printed on the gift card carboard.. but the customer not able to buy it at that amount is a failure.

by the supplying them bitcoins without pre-informing them of the amount they will get is a failure.

this is where retail vs forex fails.

trying to run a retail business plan using forex strategies wont work.

you HAVE to build up a reserve and to trade behind the scenes away from the gift cards to make your profit to ensure that when retailers and customer get is what is correct and lawful. you have to be legally accountable for your actions.. saying "total nonsense" makes me know 100% you have never been in business before.

i am sorry that it seems like hard work. but welcome to the real world.

and i bought bitcoin via wire transfer in under 10 minutes, the price i seen is the price i paid, and the amount of coins i seen was the amount i received.

it is possible. so please re-evaluate your business plan before thinking you have a hope in hells chance of taking your product to retailers. (this coming from someone with great experience in these matters)

Edit: great news a before redemption value being shown.. great thank you, one step in the right direction.. now to ensure that customer only pay $100 and retailers buy off you at whole sale under $100 so they can make a profitt. and you'll be ready to go to retailers with a superb offering

lol $100 costing $109 but giving the customer under $100 of value...

hmmmmmmmmmmmmmmmmm.....

that is a business model sure to fail in the retailers meeting room

you have the price tag showing $100 so that is the retailers price (the price customers pay).
the retailer needs to make a profit, so they would need to buy the cards off you for under $100 to make a profit. this is called whole sale price.

you also need to make a profit so you need to ensure the amount of bitcoin covers your profits but also meets world governments price advertising laws.

the most suitable solution is to pre buy Bitcoin whilst it is low and to hold it. so when someone in a month or 2 redeems their $100 card. the bitcoin you buy now will (hopefully be at $100 each) to cover the costs.

basically working using a reserve.

EG

cards display $100, retailer paid $90 whole sale.
you bought 1.1538BTC today using the $90. then when bitcoin reaches $100 you can give the customer 1BTC. netting you some profit.(0.1538btc)

with a great idea such as gift cards, you cannot be lazy and over charge the customer by showing one price. the retailer charges them another price and you redeem the customer an amount of bitcoin that does not relate at all to the current market price of bitcoin.

that is not how retail works.

havent researched if mtgox does truly own trademarks "bitcoin" but if they do then:

the idea of owning the trademark. was not to gain control to then whip and govern others. but to pre-empt governments buying up the trademark and claim it as their own creation.

but hey, all government needs to do is buy mtgox and thus the government whips and lashes upon the bitcoin community will begin. so i hope MTGox sticks to their ethics to never sell out to government