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February 12, 2014, 06:25:36 AM |
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How do dollars get injected into the cryptographic currency exchange? I know of the following sources:
1. Hand-to-hand transactions (in-person transactions).
2. Tokenization of currency (selling pre-allocated currency, like pre-paid debit cards and just as thieving, i.e. circassius coins/roman coins).
3. Exchange through a broker (e.g. bitcoin-brokers -- are they still around? Possibly the second-fastest way to transact).
4. Private vendor (eBay will implement this soon, and large vendors show up here and there on craigslist; also sale of coin miners, to a limited extent, though there is no guarantee the dollars end up in the exchange).
5. Direct deposit (intra-bank, inter-bank, international).
Of these, #5 seems to be the biggest source of fiat exiting the system. Some very large entities utilize #3, though this is only a tiny slice of the pie that is up for sale. #2 seems to be scam-heaven. #1 is an obvious thing, though I presume this is limited to small buyers and extremely large buyers. I have yet to see #4 presented in any fair and sensible manner, even though it ought to be an easy thing to do. Did I miss anything?
Concerning #5, the sleepy-me has come up with a strange bit of confusion. MtGox is a big mover and shaker (just look at the past couple of days). It is clear that only the owners and their friends are able to withdraw fiat/USD. (It is also clear that they do not bother performing arbitrage corrections to other places, possibly to capture more USD.) If I recall correctly, it is difficult to transfer dollars in there from the bank. Whatever the case, are dollars scarce on MtGox and certain other exchanges relative to possibly more-important exchanges, and does this stunt the growth of the currency's market capitalization?
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