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Another idea: Sell products and services on your site that have a higher mark-up (say 30% to 100%). This could possibly give you enough profits to make the "thin margin" sales (Amazon) worth the trouble and risk.
I've been thinking about these things myself because I am in the same "thin margin" situation with GoldStarBullion.com. Fortunately, I am a net accumulator of BTC and I have been able to weather the dips in BTC's exchange value. That said, I can appreciate the need to minimize exchange rate risk as much as possible.
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P.S. -- Here are Spend Bitcoins stats for the last month: 8,800 Visits
17,338 Pageviews
1.97 Pages/Visit
55.99% Bounce Rate
00:02:26 Avg. Time on Site
44.39% % New Visits There's gotta be a way to make that profitable.  Yes, I neglected to look at advertising revenue as a way to offset losses or add to the bottom line. |
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Yes, this is a tough challenge because you are basically an exchanger and you are exposed to "exchange rate risk" until you sell your BTC. Ideally, you would sell the BTC into the exchange immediately at the time of receipt so you can lock in your spread (if charging a markup). Using the 24 hour average is bad because, as you stated, people are more inclined to spend with you vs. cashing out when the exchange rate you are offering is better for them than the current market rate.
It is not a big deal to sit on BTC if BTC is appreciating against the currency you are exchanging for but when the value of BTC drops like this last week your losses can pile up quickly.
Solutions:
1. Have a slush fund that will help you weather the dips that can hopefully be made up for if and when the BTC value rises again. This is similar to professional gamblers who have a large enough "bank" to weather long losing streaks until their luck changes back into their favor (perhaps you can take on a partner who is bullish on BTC and is willing to finance you?)
2. Charge a mark-up to give you an added cushion to help weather the down periods. After all, you are providing a service and people will be willing to pay for this service.
3. Figure out how to automate the selling of your BTC into the exchange as soon as you receive it (this means you can't use the 24 hour average) thus locking in your sales price. This is a hedge that bullion dealers like myself use when selling and buying bullion although I don't know of any way to automate this and you still have "exchange rate risk" until the trade is completed.
4. A combination of all of the above.
In summary you are basically a currency trader/speculator. The problem is that sellers of BTC "put" it to you (sell to you) when the BTC buying power is strong thus you are always buying BTC at the top. When the buying power of BTC drops your sales drop off so you don't get to accumulate much BTC at the lower prices. The way your business is structured now, you are betting that BTC will continue to appreciate against other currencies. When it doesn't you suffer losses.
All in all this is a tough situation to be in. You are basically a proxy buyer and currency trader. About the only solution I can see is if you had big pockets and wanted to accumulate BTC regardless of the price swings. Having a steady income of cash from other sources that allowed you to continue buying BTC over time would make it ideal provided you had enough disposable income to cover the sales of your services (your buying of BTC).
I hope this helps!
Trader Steve
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Exactly.
Every private key is just a 32-byte hex number. Every 32-byte hex number can be used as a private key. And hence, every 32-byte hex number has a corresponding Bitcoin address.
Just by coincidence (or perhaps not), the SHA256 hash algorithm can produce a 32-byte hex number from any text input. And while the output isn't predictable, it always produces the same output given the same input text.
So the idea is just to pair these two ideas. Pick a passphrase, compute the SHA256 of it, use that as a private key.
All the Casascius Bitcoin Utility does, is calculate the Bitcoin address that corresponds to your 32 bytes as the matching private key.
You aren't remembering the private key itself, you're merely remembering the text that will produce your private key when plugged back into the SHA256 hash algorithm. Which is good enough.
(When using Casascius Bitcoin Utility / SHA256, the passphrases ARE case sensitive by the way)
This sounds pretty awesome. Do you have a direct link to this utility? Thanks! |
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It's cash. You can't regulate cash. That's what makes bitcoin useful.
But if I pay cash in real world, I expect the seller to hand me goods right away - my left hand gives him cash and my right hand takes goods from him. If he refuses to hand me the goods, I can beat him up at the spot. Technology of inflicting severe physical damage over the internet does not (yet) exist, therefore cash can't be used online. Cash can and is being used on the internet (that's what bitcoin is and thousands of transactions have already been successfully concluded) - you just need to know who you are dealing with and be willing to deal with the consequences of a seller not delivering. |
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Same thing is true for the internet. The internet only has 4 billion IPs, so it can't possibly work as a global communication network. But something like the internet is bound to gain some traction.
IPV6 will fix that limit. Nice try, but the internet has fundamental flaws that can't be fixed: * It's a scam, a scam, because the early adopters get all the best email addresses. * It's distributed with no central server to control the production of information. This means everyone will be able to create information equally, and the government will have to compete with everyone else. But every good Keynesian information theorist knows the government needs to be able to manipulate the information people have, or people might not want to continue funding wars and welfare. * You can't convert internet information to other kinds of information. What if I want to talk to someone on the phone? I can't use the internet for that. And if it's not possible today, it will never be possible. * When something goes wrong, it will die. There's nothing stopping everyone from just deciding tomorrow that they don't want to use the internet anymore. Yeah, there are some "ISPs" that might want to encourage internet adoption, but their commitment is not credible, IMO. So you can see that the internet can never work. Don't get me wrong, the internet is an interesting idea that we can learn from. The real communication network of the future will probably incorporate some ideas from the internet. But the internet isn't it. LOL +1 |
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Restrict mining and any trading to people who have verified their identity and credentials with a central authority.
We all love the idea of decentralized this, anonymous that... and you know what? we've seen just how flawed the idea of that is. You have hackers and scammers coming out of the woodwork because of the open, anonymous, accountability free nature of bitcoin.
That is the downfall of bitcoin. By leaving it wide open, you encourage criminals and little kids to swarm to it and try to steal and cheat any way they can imagine with no repercussions.
OH, you're not 18? bitcoin isn't for you. Oh, you can't verify your identity... bitcoin isn't for you.
There you go.
It's cash. You can't regulate cash. That's what makes bitcoin useful. I think people should stop trying to treat bitcoin as something that it is not. When you send cash across the web you better be willing to take the loss if the other party doesn't honor their obligation. This should severely restrict who you do business with. As Matonis has commented in several places, bitcoin is likely better suited for hawala purposes. Online merchants must make themselves highly transparent if they wish to attract cash-paying customers. |
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I come here to watch the cognitive dissonance and zeolatry. Thanks for both!
Call it what you like but you cannot deny economic law. |
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Mass adoption is not needed for bitcoin. It is a commodity that has unique features and benefits and these features and benefits (see link below) are valued by a certain group of people. Most of the people who will value it do not even know it exists yet. If there were never any more usability improvements to the current client, bitcoin would still increase in value over time. Not everyone needs to understand it or how to use it. A prime example is gold and silver. Most people don't know or understand them. Most people don't own them. Most people don't know where to buy them or sell them. Yet precious metals still have value because those who understand economics see that they serve a purpose. Bitcoin is the same way, and in many respects, much better than precious metals. Right now we are in the discovery and speculation phase. Most buyers don't understand bitcoin's true value and purpose - they are merely playing a speculation game and piling in. When challenges arise these same people pile out. We will see many of these speculation bubbles and crashes along the way to higher prices. Bitcoin has too many features and benefits that cannot be ignored nor denied. Bitcoin: A New Commodity Created To Serve Market Demandhttp://tinyurl.com/3ctt5v8 |
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Currently doing some Python hacking for BTC, and since the price drop I'm probably working for 10% of my usual rate. However, I'm having fun doing it; it's the kind of thing I'd usually do in my spare time for free, so I'm not losing out. I encourage other developers to do the same with small projects, I'm certainly enjoying it Some of my fellow cohorts and I were kicking around the possibility of opening a poker room in Seattle that would offer to payout in Bitcoins. Interesting...I guess you'd be taking the angle that you are not betting "money" or whatever it is that is prohibited by the central planners? |
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Successful trade with 72289. He sent first. Thanks!
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Still waiting for my product too  |
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UPDATE:
New Dial Options: You can choose to have either the "HOROLOTECH" logo on the dial or you can elect to have the dial say "BITCOIN CHRONOGRAPH". Either way, "BTC" will still be engraved on the rotor which is viewable through the exhibition back.
is it too late for mine? No, it's not too late. Just PM me your preference. |
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UPDATE:
New Dial Options: You can choose to have either the "HOROLOTECH" logo on the dial or you can elect to have the dial say "BITCOIN CHRONOGRAPH". Either way, "BTC" will still be engraved on the rotor which is viewable through the exhibition back.
UPDATE: This limited edition will say "BITCOIN CHRONOGRAPH' on the dial.
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it's better this mybitcoin thing happened now rather than later, I didn't really know how popular online wallets were to be honest, Finding out it could be as much as 100k btc gone was a surprise to me. But the upside to this is, of all the ideas sprouting up around bitcoin this online wallet crap needed a reality checking kick to the balls most of all, because it would have kept growing, imagine in the future an online wallet company got so big and trusted that it had a substantial percent of all coins in existence(yes people WOULD do that, deepbit..) then *poof* its gone! theft/government or fricken tsunami, cause doesn't matter, your coins are gone because you all gave up control and created this centralised point of failure for yourselves, a company being trustworthy isn't even the point as things can be lost due to a variety of problems however well intentioned. it's an unnecessary risk it's a costly lesson for those who just lost coins but a good lesson none the less. since I started mining last year I have always secured and encrypted my own wallets (+backups), and try to minimise the amount my coins are exposed you can't stop it 100% or you couldn't spend them, just like cash you need to hand over the bills at one point, the few times I had to sell some coins (a small amount on britcoin) it went well, but I was still a little nervous during the process, and I was in an out quickly, no holding funds or coins online for more time than needed, because the truth is, if something goes wrong and I lose my coins it's my own fault for trusting them with them. because that's the point of bitcoin, people taking control of there own money, With that mentality(which a quite a few us us have) the idea of permanently using one of these online wallet things always sounded insane, bitcoin's main features are being decentralised and having direct control of your money(we all know that) so the question is, if enough people use things like an online wallet and make a certain company big and "trusted" and create a potential centralised point of failure whilst simultaneously giving up the control of there coins, why are they using bitcoins at all?, why not banks or paypal or credit and debit cards? just trust them with your money, they're even regulated.. It's people not securing there own coins that has created most of the bad press, making things seem much worse then they are, causing public loss of confidence, Some casual news headline(inaccurate) readers still think bitcoin itself was hacked and is now worthless because people can make their own "counterfeit" coins,(yes I read that on another non bitcoin forum) bitcoin is working perfectly, the protocol is fine and running exactly as intended, these online wallets and insecure websites you just hand your wallets and coins over to and then they get "lost" is a separate issue. Imagine a real wallet full of cash criticised the same way as bitcoin, "So i gave him my wallet, bulging out the sides with cash it was, and then, you're not going to believe this, HE RAN OFF WITH IT!, so insecure! these wallets will never catch on, definitely not secure enough to put cash in AVOID!" just ignore the actions of the wallet's owner and blame the wallet. that's the news cycle were in, they ruin it for the rest of us. sorry turned into a rant there  +1 |
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Since when anyone in US cares about The Constitution? I thought there are like dozens of current and enforced laws which are clearly in direct violation of The Constitution. Anyone would like to list top 100?
So True. |
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I think this quote applies:
'Yes, make sure you get permission from your masters..."
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I will trade 7.70 BTC for a $100 Wal-Mart Gift Card or a $100 Safeway Gift Card. I can handle several gift cards if you would like to trade me more than one. I have references here: http://forum.bitcoin.org/index.php?topic=26907.0You send first. PM me if interested. Thanks, Trader Steve |
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what kind of quality guarantee do you provide?
Our products are guaranteed to be as advertised. If they are not, you can give us a bad report here. Before writing a bad review though, please give us the opportunity to fix any concern that you may have with your order. Thanks, Trader Steve |
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