Back in May, I was asked to help start a business that would solve 'the exchange problem' for Bitcoin, and I came up with something very similar to this (in June, in fact!). For legal reasons, the interested parties decided ultimately not to pursue the idea, so I am so glad that you are!
After asking my former partners, I will now share some of the significant differences in our b-models, and why I think you should steal these ideas for yourself and bring them to life!
1] Allowing users to
set their own exchange rates (as is done on LocalBitcoins, with option to peg to an exchange's price), offers you many benefits. The largest is that users will automatically adjust your "SAVE 6%" parameter each moment of every day according to changes in both market conditions and the unique preferences of each Buyer/Spender pair. Those wishing to make large purchases, or those desperate to have orders filled quickly, should have the opportunity to offer whichever longshot exchange rate the market will bear. These longshot orders will draw both Buyers and Sellers to your site and increase the desperately-needed liquidity of this marketplace. Setting something at 6% is arbitrary, rigid, almost certainly the wrong number, and most of all completely unnecessary.
2] Charge exactly 1% of the traded volume, because 1 is the smallest number, simple, and easy to remember. Rank users (anonymously) based on how their cumulative total of fees paid (as a reputation/feedback-type system). Save users the trouble of 'buying and selling' objects to themselves to increase this reputation buy just allowing them to purchase reputation directly in the form of a donation to GBSB. Such a costly signal will credibly indicate a user's seriousness to his or her target-counterparties.
3] I feel that there are numerous opportunities to improve
communication of your value proposition. We decided to emphasize:
-Purchase Bitcoins ANONYMOUSLY via CREDIT CARD (yes, it's possible)!
-Spend Bitcoins on WHATEVER YOU WANT with COMPLETE PRIVACY!
-Reliability (much harder to close down, or encounter bank trouble (as happened to BitFloor, BitSpend, etc. because you do not move any fiat around).
Currently, your webpage does not discuss these (amazing and monopolistic) benefits, and has that 6% fee information, which will probably confuse and frighten most users into thinking that both Buying and Selling will land them with a (big) 6% fee. I think opportunity for improvement here.
4] None of my partners were lawyers, but according to our research, the business would 'accept Bitcoin from one party and send them to a different party', which would probably classify the business as a 'money transmitter' entailing a world of
legal hurt, unless we lived outside the US or ran the site from TOR (ie, illegally). We discussed that another solution would be not to use a website at all, and use simple, open-source software tools once the marketing phase was completed.
5] We had some screenshots on what the user was required to do for their Amazon wishlist, which included a] setting the
Wish List Privacy Settings to "shared" (required), and 2] setting the
Wish List Profile's address (required), and "Don't spoil my surprises" settings, etc.
6] We had a "How it works" section, one draft looked like this:
1. Placing an Order
a. Alice is browsing Amazon and wants to buy an 'All-New Kindle Paperwhite'. She checks out the tax and shipping and sees that it there is a free shipping deal, and no tax, so the total USD cost for this will be $119.00.
b. Alice checks out the Bitcoin price, on NAME and around the internet, which seems to be around 125. However, knowing that NAME offers other advantages to BitBuyers, Alice decides that she'd like to try and pay just 0.9 BTC ($112.50) for the Kindle.
c. Alice sets up an Amazon Wishlist containing the Kindle (see Setting Up Your Wishlist).
d. Alice begins to Place an order by submitting the following information:
1. USD Value: 119.00
2. BTC Value: 0.9
3. Amazon Wishlist: Link:
http://amzn.com/w/Qzzz 4. Requirements: None
e. Alice pays (1.01 * 0.9) = .909 BTC to an address we provide, thus Placing the order.
2. Claiming an Order
a. Bob is browsing NAME, desiring to buy about $100 worth of Bitcoin.
b. Bob sees Alice's order for .9 BTC at a USD cost of $119, implying a rate of 132.2 USD/BTC.
c. Bob finds the rate and amount acceptable, so he Claims the order.
3. Filling an Order
a. Having Claimed an order, the clock is running for both Bob and Alice. Bob now purchases the contents of the Amazon wishlist using his own credit card/paypal/M-PESA/whatever, and has them shipped to Alice. Notice that Bob can do this without knowing Alice's address, and Alice recieves the Gift without knowing anything about Bob at all.
b. Upon receiving the contents of her wishlist, Alice leaves positive feedback for Bob.
c. Bob leaves positive feedback for Alice, and the funds are released to Bob the same day.
With the transaction complete and both feedbacks entered, the feedbacks become visible on the site for people to use in assessing users.
If something goes wrong, instead of leaving positive feedback, either Alice or Bob flags the transaction for moderation.
7] We also had a Who Knows What table/infographic that had rows "BitBuyer","BitSpender","NAME","Merchant", and columns "That the transaction involves Bitcoin","BitSpender's name/shipping-address","BitBuyer's name/credit-card-information", with appropriate green checks and red X's.
8] Since you sort of need to trust GBSB with holding your Coin until the order is fulfilled, we thought about doing random promotions, where anyone with an open order could win a prize.
9] 4th of July Freedom party and what have you.
Anyways, that's all I can remember for now, I had all kinds of ideas for stopping competitors and expanding globally, but I can't quite remember them in detail. It was a long time ago.
Good luck!! I can't wait to try it!
WOW! You are amazing sir. Here's the main announcement thread, and it's ready to be used immediately:
I have considered a lot of the options you have. PMing you for further contact.
Show Posts
