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Author Topic: A Newbie Rates 4 BTC/USD Exchanges  (Read 2587 times)
coqui33
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January 29, 2013, 05:00:41 PM
 #1

A Newbie Rates 4 BTC/USD Exchanges

As a bitcoin newbie, I had to choose a BTC/USD exchange. So I tested four exhanges with amounts increasing from $50 to $2000 per transaction. The exchanges tested were: Coinbase, CampBX, The Rock Trading, and MtGox. Since the latter three use Dowlla, I also had to test Dwolla. Here are my findings.

Coinbase <coinbase.com> -- I was unable to test Coinbase with more than 10 BTC per transaction due to their restrictions. So I conducted several trades summing to significant value in total. Their site performed flawlessly. My newbie tech-support question was answered promptly and courteously. Money flowed into and out of my bank accounts without a hiccup. If you can be patient with their per-transaction limit, I rate Coinbase 5 stars out of 5.

Dwolla <dowlla.com> -- Dowlla is a money-transfer business, not a BTC/USD exchange. But since the next three BTC/USD exchanges require that funds be sent via Dwolla, it was necessary to test Dwolla itself. I verified my trustworthiness with driver's license, proof of residence, SSN, and DOB. Once I was verified and approved, I then sent transfers of increasing value every few days: $100, then $500, $1000, $2000, $5000.... Their system choked on the $5000 transfer. Dwolla froze my account and their website displayed a message demanding another copy of my driver's license. I sent it, but my account remained frozen. I sent an email asking what the problem was. THEY NEVER ANSWERED MY EMAIL. My account remained frozen. I phoned. On the phone, they said that their webpage (demanding another copy of my driver's license) was in error, and that what they actually wanted was copies of my bank account statements. I sent these and my account was unfrozen. I thereupon cancelled the $5000 transfer, emptied my account, and resolved never to deal with them again. Their freezing my account was irritating. Their erroneous web page was unprofessional. Their REFUSAL TO ANSWER MY EMAIL asking why they had frozen my account was intolerable. I rate Dwolla 1 star out of five.

The Rock Trading <therocktrading.com> -- Trade went without a hitch. But then, in order to withdraw the 3.35 bitcoins that I had just bought, I had to send a personal email to "Paci Barbarossa"  requesting my coins. The person sent me my bitcoins three days later. Their requiring a personal unencrypted email, which can be read by anyone, or rejected as spam at any link in the chain, in order to take possession of my own property is unacceptable. I understand their need to build trust, but delivering bitcoins only after email request (3 days after!) is not the best way to build trust. I rate The Rock Trading 2 stars out of 5.

CampBX <campbx.com> -- Trades were flawless. Bitcoin transfers were immediate. But there were two problems with CampBX. First is their shallow market. A $2000 trade distorts their exchange rates. Second, their customer support is non-existent. Literally. Their website displays no phone contact. All links on their website (even PR links!) go to a third-party support website. And the third-party support website is apparently shut down. Repeated support tickets, escalating from a newbie question to frantic urgent plea, were utterly ignored. I rate CampBX 3 stars out of 5.

MtGox <mtgox.com> -- The smoothest, most professional BTC/USD exchange that I dealt with, once I was approved. Admittedly, it took two weeks for me to become approved. They rejected my voter's registration card as proof of residence but then accepted a water utility bill. Go figure. It must be a Japanese thing. Anyway, were it not for their requiring Dwolla deposits, I would rate them more highly. As it stands, MtGox is inaccessible because Dwolla is untrustworthy. Incidentally, I tried sending an international wire transfer of $2000 from my bank to MtGox's bank. Too costly. The weirdest line-item cost on the wire transfer read that they had to deduct $11.58 from the transfer because, "The original funds you sent were in USD, but because of your Mt.Gox account settings they were converted into USD and deposited into your account." They charged me $11.58 to convert $2000 USD into $2000 USD! If MtGox were, say, to set up  a U.S. subsidiary accepting ACH transfers, I would rate them 5 out of 5. But because there is no practical way to send them USD, I rate MtGox 2 stars out 5.

Armed Citizens and the Law -- NRA-certified firearms instructor
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January 29, 2013, 05:38:35 PM
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Awesome!  Thank you for the reviews!  I would be interested in seeing you review bitinstant.

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January 29, 2013, 08:52:33 PM
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move topic>https://bitcointalk.org/index.php?board=85.0

coqui33
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January 29, 2013, 08:54:39 PM
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Thanks, Walter.

As I understand it, BitInstant accepts USD only via face-to-face cash deposits or Dwolla. I already talked about Dwolla above. Regarding face-to-face cash deposits at Walmart or wherever, I am in my 70s and live about 30 minutes from the nearest place that accepts cash deposits. So I am limiting my investigations to places I can send money to without leaving my desk.

For example, this morning I had great hopes that ZigGap would work. ZigGap accepts cash deposits at Chase Bank and I have a checking account with Chase. According to Chase, a transfer from my account to ZigGap's account would be instantaneous and irrevocable--the same as cash.

But I checked with ZigGap and they said that they can tell if money comes from a within-bank transfer, not from cash, and that they would only accept a deposit that came from cash.

So I asked the Chase assistant branch manager if I could send her a Chase withdrawal slip from my account stapled to a deposit slip for the same amount into ZigGap's account. I told her that her teller could process the withdrawal slip, count out the cash onto the counter, then turn around and count the cash back in from the counter, and process the ZigGap deposit slip. The bank's assistant manager looked as me as if I was nuts, so I left before she could call security.

Kidding aside, this whole thing is so new and unprecedented that everyone is stumbling around trying learn what works and what gets you ripped off. I believe that patience will eventually pay off. A few years will see the emergence of bitcoin businesses that have figured out how to attract and hold honest customers.

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January 29, 2013, 09:25:38 PM
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Thanks, Walter.

As I understand it, BitInstant accepts USD only via face-to-face cash deposits or Dwolla. I already talked about Dwolla above. Regarding face-to-face cash deposits at Walmart or wherever, I am in my 70s and live about 30 minutes from the nearest place that accepts cash deposits. So I am limiting my investigations to places I can send money to without leaving my desk.

For example, this morning I had great hopes that ZigGap would work. ZigGap accepts cash deposits at Chase Bank and I have a checking account with Chase. According to Chase, a transfer from my account to ZigGap's account would be instantaneous and irrevocable--the same as cash.

But I checked with ZigGap and they said that they can tell if money comes from a within-bank transfer, not from cash, and that they would only accept a deposit that came from cash.

So I asked the Chase assistant branch manager if I could send her a Chase withdrawal slip from my account stapled to a deposit slip for the same amount into ZigGap's account. I told her that her teller could process the withdrawal slip, count out the cash onto the counter, then turn around and count the cash back in from the counter, and process the ZigGap deposit slip. The bank's assistant manager looked as me as if I was nuts, so I left before she could call security.

Kidding aside, this whole thing is so new and unprecedented that everyone is stumbling around trying learn what works and what gets you ripped off. I believe that patience will eventually pay off. A few years will see the emergence of bitcoin businesses that have figured out how to attract and hold honest customers.

Unfortunately, Chase does not allow instant member to member transactions and they try to route everyone through the Chase QuickPay service (which isn't fast at all and is reversible).  I have done many transactions via Chase cash deposit by withdrawing the cash, then depositing to the other member's account.  Maybe the teller looks at you funny, but tell them it's the only way to instantly and securely make the funds available to the other customer.

Hope that helps.
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January 29, 2013, 10:06:21 PM
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Unfortunately, Chase does not allow instant member to member transactions and they try to route everyone through the Chase QuickPay service (which isn't fast at all and is reversible).  I have done many transactions via Chase cash deposit by withdrawing the cash, then depositing to the other member's account.  Maybe the teller looks at you funny, but tell them it's the only way to instantly and securely make the funds available to the other customer. Hope that helps.
-EP
It helps. Thank you.

But my basic problem, as I mentioned, is that I want to do it all from my desk, rather than dragging my ancient bones to a bank that is a half-hour away. The problem is not my being looked at funny. The problem is that the bank cannot do what you describe unless I am physically present at the bank in the flesh. If I tried it by fax, email, or snail-mail, they fear that I could deny that I ever sent the withdrawal authorization, thereby ripping Chase off.

As I implied above, the solution is not yet here, but I expect that the whole clumsy interface between slick 21st-C bitcoins, and sluggish 14th-C banking procedures will sort itself out in coming years.

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January 29, 2013, 10:09:20 PM
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It helps. Thank you.

But my basic problem, as I mentioned, is that I want to do it all from my desk, rather than dragging my ancient bones to a bank that is a half-hour away. The problem is not my being looked at funny. The problem is that the bank cannot do what you describe unless I am physically present at the bank in the flesh. If I tried it by fax, email, or snail-mail, they fear that I could deny that I ever sent the withdrawal authorization, thereby ripping Chase off.

As I implied above, the solution is not yet here, but I expect that the whole clumsy interface between slick 21st-C bitcoins, and sluggish 14th-C banking procedures will sort itself out in coming years.

We completely understand that. That's why we're working on the credit card and bank integration. Soon this is something you will accomplish easily.

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January 30, 2013, 02:29:57 AM
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The bank's assistant manager looked as me as if I was nuts, so I left before she could call security.

Each bank might have their own handling for non-reversible transfers.  For instance, wire transfers generally require an in-person visit to set up but with some banks repeat transfers can be made via phone or other form of request, depending on what your bank's policy allows.  A similar cash transfer method to the other Chase account might be allowed as you describe (by providing some written instruction).

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February 08, 2013, 11:43:36 AM
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Coinbase <coinbase.com> -- I was unable to test Coinbase with more than 10 BTC per transaction due to their restrictions. So I conducted several trades summing to significant value in total. Their site performed flawlessly. My newbie tech-support question was answered promptly and courteously. Money flowed into and out of my bank accounts without a hiccup. If you can be patient with their per-transaction limit, I rate Coinbase 5 stars out of 5.
I wrote the above on January 29, 2013. I regret that I must retract my opinion. I now rate Coinbase at zero stars. After 9 transactions (8 bitcoin purchases), Coinbase cancelled a buy after taking $209.32 from my bank account, saying that I (73-year-old independently wealthy married man with an utterly spotless credit record) am "a risk". Speaking as a long-retired management consultant, I opine that Coinbase has become self-destructive. I now recommend avoiding Coinbase.

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February 08, 2013, 06:57:05 PM
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Coinbase <coinbase.com> -- I was unable to test Coinbase with more than 10 BTC per transaction due to their restrictions. So I conducted several trades summing to significant value in total. Their site performed flawlessly. My newbie tech-support question was answered promptly and courteously. Money flowed into and out of my bank accounts without a hiccup. If you can be patient with their per-transaction limit, I rate Coinbase 5 stars out of 5.
I wrote the above on January 29, 2013. I regret that I must retract my opinion. I now rate Coinbase at zero stars. After 9 transactions (8 bitcoin purchases), Coinbase cancelled a buy after taking $209.32 from my bank account, saying that I (73-year-old independently wealthy married man with an utterly spotless credit record) am "a risk". Speaking as a long-retired management consultant, I opine that Coinbase has become self-destructive. I now recommend avoiding Coinbase.

I am really sorry to hear that, and I hope Coinbase is able to track your money down and make it right with you.

I have used them for one purchase so far.  It was slow, and at one point the ETA was updated to be almost a day later than originally predicted.  But, my bitcoins arrived only an hour after the original prediction, so I think they were being conservative, and I appreciate that.  And the slowness is kind of expected in this realm, at this point in time, so I don't fault them for that.  So far I am good with them and will use them some more going forward.

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February 08, 2013, 08:35:55 PM
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I wrote the above on January 29, 2013. I regret that I must retract my opinion. I now rate Coinbase at zero stars. After 9 transactions (8 bitcoin purchases), Coinbase cancelled a buy after taking $209.32 from my bank account, saying that I (73-year-old independently wealthy married man with an utterly spotless credit record) am "a risk". Speaking as a long-retired management consultant, I opine that Coinbase has become self-destructive. I now recommend avoiding Coinbase.

Well, you probably are 'a risk' because you are trying to buy the limit amount consequentially for 8 days. The 30 day period has most likely not finished for you.

I can see Coinbase's desire for the 'limit amount' being only 10 BTC and then raising it to 100 BTC after 30 days. Coinbase needs to find honest customers just like honest customers need to find honest providers.

But for some the 100 BTC limit will be even too small.

Why not just have an amount of BTC that Coinbase segregates as a 'security deposit'. Then that becomes the limit. So if you want a 250 BTC limit then you put 250 BTC into the security deposit. Then Coinbase would not have any risk of loss due to fraud because they would be holding the security deposit. This would be an easy way for them to get rid of the 30 day waiting period and find the honest customers easier.

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February 09, 2013, 08:25:18 AM
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Why not just have an amount of BTC that Coinbase segregates as a 'security deposit'. Then that becomes the limit. So if you want a 250 BTC limit then you put 250 BTC into the security deposit. Then Coinbase would not have any risk of loss due to fraud because they would be holding the security deposit. This would be an easy way for them to get rid of the 30 day waiting period and find the honest customers easier.

This is actually a pretty clever idea! So, you want to buy 100k bitcoins right off, no time to wait? Buy 10. Put in deposit. Next buy 20. Put in deposit. Next buy 30. Put in deposit. Next buy 60. Put in deposit. Next buy 120. Deposit. 240. Deposit. 480. Deposit. You can now buy up to 960, and on and on. All this with no real risk for coinbase, all they expose at any one time is 10 BTC.

Dwolla <dowlla.com>

The BTC community doesn't like and doesn't use dwolla because on top of appalling service, hassling Bitcoiners etc it also either stole a lot of money from at the time 2nd largest exchange (Tradehill) or else helped them do it. Dwolla, much like Linode, are the antichrist.

If you're in a SEPA zone maybe try out bitcoin-central.net, they (unlike MtGox and everyone else) have the actual licenses to handle user funds, which are insured as with any bank etc.

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February 09, 2013, 11:11:57 AM
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Well, you probably are 'a risk' because you are trying to buy the limit amount consequentially for 8 days.
No. They took my money and "cancelled" the sale on my first buy after a ten-day hiatus. The 8 consecutive days of trades in January went without a hitch. A better hypothesis would be that I am a risk precisely because I stopped buying for ten days. Personally, I offer no hypothesis. It is pointless to guess at an organization's motives. The end-result is that they accepted payment for merchandise and, so far, have delivered neither the merchandise nor returned my payment. I impute no evil motive to Coinbase. I merely want my bitcoins or my money back.

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February 12, 2013, 11:13:09 AM
 #14

Update: Coinbase has just returned my $209.32.  We are now square, and I have unlinked my bank accounts

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February 12, 2013, 01:10:45 PM
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Have you looked at BitFloor yet?
https://bitfloor.com/

Here is a demonstration video I put together on using their interface to acquire bitcoin.
http://www.youtube.com/watch?v=zSmxbtFQlmg&t=2m30s

If you are willing to set up a free CapitalOne360 online checking account, you can use the p2p transfer option to fund your BitFloor account for free. Otherwise, I think there is a $15 fee for wire transfer.

EDIT: As of 2013-04-17 BitFloor has ceased all operations.

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