absolutely not. there's still tons of counterparty risk with paypal.

isn't that why you're here in the first place? bitcoin's irreversible transations eliminate alot of counterparty risk.

Anyone who has used either service care to comment/review it? While I do appreciate the creators coming on the board to discuss their product, I'm curious to see what users say. How is the dispute process? What are the pros/cons?

I think that you'll still experience arbitrage from people who will game your system via whatever exchange rate you choose. The key would be to pick an exchange rate that minimizes your losses as much as possible. 0.5% over the prevailing MtGox might work, but in a fast moving market, you might get left holding the bag still.

Depending on the volume you plan on moving BTC in and out of the market, you might want to contact MtGox and see if you can get a discount. 0.3% isn't much per trade, but based on the fact that you will probably be executing several small trades with a fairly high frequency, you might be able to make something work out. Worst case, they say no =)

On average, how long has it actually taken for people to receive BTC sent? Based on the wiki, it says it could take anywhere from 10 minutes to hours, to days.

Do most people usually add a fee to speed up the transaction?

The problem with BTC is not the exchange rate of it for fiat currency. The problem is that it's a pain in the a** to actually USE it to exchange BTC for goods/services.

You're also going to need alot more than 100 USD - you'd need a reserve of every particular asset class you're trying to be an exchanger in, and you'd need a large reserve depending on the volume you are anticipate.

Since BTC is a pretty thinly traded asset (as compared with volume seen on NYSE stocks - with $100,000+ buy/sell orders placed every second) reserves of $1000 USD per asset would probably be more realistic. Even then, if your service catches on you're going to need to come up with more reserves fast, especially if your customers are moving more toward one thing (ie, everyone dumping USD for gold...).

edit: another key to being a currency exchanger (or a business of any sort) is to get stuff cheaper than the average consumer and sell it at a fair markup. If you want BTC to sell on your exchange, start mining, and use the BTC you accumulate in your exchange. For other assets like gold and silver... good luck. Large players sell precious metals at a markup; it depends. APMEX is a pretty well-known and reputable dealer in precious metals, they mark up credit card orders ~2%, and they charge a fixed amount over spot (usually $50 per ounce, for gold). If your're serious, you might want to try getting your hands on a metal in quantity at a discount.

Why do people keep thinking that "well, if I can convince enough people to do x..." somehow the price will change?

The price of bitcoins is not affected by the stuff people post here. It's affected by what people actually DO with their fiat and their BTC.



Also, arbitrage is by definition, taking advantage of a market inefficiency for profit. The reason why markets are, on a whole, efficient is because people exploit these inefficiencies. While it is likely that a large group of people will exploit this inefficiency, more likely the spendbitcoins.com owner will change his exchange rate to quit hemorrhaging money.

I don't get it. How can people be so trusting with bitcoins?

Treat BTC like you would real money. Hell, you probably bought them with real money anyway; if you didn't, you mined them with computer equipment you paid real money for. You wouldn't play fast and loose with your bank account balance or credit cards, would you?

Then again, people would, and people do. A fool and his money are soon parted, and that applies to ALL stores of value. Just because it's digital doesn't mean someone doesn't want to steal it.

Guys, the problem with BTC is not that people aren't using them for spending.

The problem is there are no good places to spend them. Until merchants that currently accept BTC grow or larger merchants find a useful way to implement BTC, their "primary" purpose will not be realized.

BTC still has alot of problems, one of which will be gaining acceptance. Fiat currency doesn't have this problem; anywhere in the US a $5 bill is instantly recognizable to anyone of holding value. BTC still has a little to prove. Fiat currency also has the luxury of being supported by the government. For example, a 1 pound note is not nearly as useful in the US because it is hard to use it to obtain goods and services.

It will take time for the 'world at large' to trust BTC as a store of value, and more time for either established merchants to accept it, or new early adopter merchants that take BTC to grow large enough for BTC to be viable.


Think about how hard it is to buy BTC. The price fluxuates; BTC exchange services have hard times processing large orders, it's hard to get your fiat currency in and out of an exchange, and a certain exchange (ahem, MtGox) has been hacked and the market value has been manipulated. These prove to be obstacles.

Be patient and we'll see how this experiment goes.

I'm also holding onto my coins until the value stabilizes. =)

I want the bitcoin to be a currency that is more widely accepted as a way to exchange money for goods/services, rather than a vehicle for speculation, which it has become somewhat.

I sell on ebay and I personally loathe Paypal's monopoly, since I've been on the losing end of a few scams. While BTC has some problems to overcome as a way to be a way to purchase goods, I think that this might be a new standard - all the extra parties involved in internet transactions (credit card companies, 3rd party payment processors) allow for many vectors for fraud. BTC spends aren't "chargeback-able" which has positives and negatives, but I think once someone perfects a way to exchange BTC rapidly for fiat and for goods/services then we'll have a pretty good system.

Unfortunate lurker caught in the wave of new regulation. I lurked the mining and economics forums back in May of this year, and I have been casually mining on BTCGuild. I also have sent PMs before the restrictions - I was quite surprised when it suddenly told me I wasn't allowed to send them anymore! I thought something was wrong with my account until I found out about this board!

What kind of trolling happened? I was a lurker on the forums since May and frequently surf the mining and economics forums. I was pretty surprised when I couldn't post a reply, or even PM a mod about the problem!