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Author Topic: Helping people purchase small amount of bitcoins Idea...  (Read 544 times)
buybtc
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February 05, 2013, 07:44:24 PM
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This might sound confusing at first but give it a try.  This is ideally for people who have already have bitcoins (or can obtain a few bitcoin bits through free sites) .

The idea is you deposit a amount of bitcoins you are seeking to buy into a "holding account"  - right now it will be $1 through $5 worth of bitcoins deposited in order to buy $1-5 dollars worth of bitcoin w/ a credit card.

The idea is to off-set the risk of doing business with a credit card fraud etc.,. by balancing it against a irreversible bitcoin holding deposit.

Now, over time we "drip back" your deposit with you of course receiving the amount of bitcoins you bought . If we see you did a fraud charge or did a reverse on the card we just pause the "drip to you"  and sell out your "bitcoin holding/deposit".  Obviously, good standing people will get their deposit back faster.

Just thought I would run this by everyone to see what their thoughts are.

  

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buybtc
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February 05, 2013, 08:28:39 PM
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This might sound confusing at first but give it a try.  This is ideally for people who have already have bitcoins (or can obtain a few bitcoin bits through free sites) .

The idea is you deposit a amount of bitcoins you are seeking to buy into a "holding account"  - right now it will be $1 through $5 worth of bitcoins deposited in order to buy $1-5 dollars worth of bitcoin w/ a credit card.

The idea is to off-set the risk of doing business with a credit card fraud etc.,. by balancing it against a irreversible bitcoin holding deposit.

Now, over time we "drip back" your deposit with you of course receiving the amount of bitcoins you bought . If we see you did a fraud charge or did a reverse on the card we just pause the "drip to you"  and sell out your "bitcoin holding/deposit".  Obviously, good standing people will get their deposit back faster.

Just thought I would run this by everyone to see what their thoughts are.

  
guess not! Tongue
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February 05, 2013, 08:57:37 PM
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The problem here is that credit cards can be reversed up to several months after the initial charge. So your drip would need to be very slow, wouldn't be worth the wait, and ultimately could still be used for fraud. (Say, you deposit $5, buy another $5 by CC, then reverse the CC charge. The longer you wait, the more you gain, but there is never any risk to you, the scammer.)
buybtc
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February 05, 2013, 09:05:21 PM
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The problem here is that credit cards can be reversed up to several months after the initial charge. So your drip would need to be very slow, wouldn't be worth the wait, and ultimately could still be used for fraud. (Say, you deposit $5, buy another $5 by CC, then reverse the CC charge. The longer you wait, the more you gain, but there is never any risk to you, the scammer.)

Thanks Andy.  Yes, it can be reversed several months ahead. Thing is it wouldn't be worth it to the person committing the fraud since they would be fronting the bitcoin in order to do it.  So if the person is legit they see their deposit faster. Get that part?

There is a fine balance between sorting out who is legit and who isn't but I hear your points!

edit: when you say "wouldn't be worth the wait" you mean from a scammers perspective or the buyers ?
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February 05, 2013, 09:11:09 PM
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Well, you'd need to require a deposit well in excess of the purchased amount (say, deposit 1BTC to buy 0.5BTC), and at least initially, you would need to force the user to wait 3-6 months before they broke even.

It would then take a number of years to build enough trust to make the system usable for reasonable amounts in a reasonable time.

In that time, a person seeking to buy bitcoin could easily build up a decent reputation on #bitcoin-otc, probably find some people in real life to verify him and sign his crypto key.
buybtc
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February 05, 2013, 09:13:55 PM
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Well, you'd need to require a deposit well in excess of the purchased amount (say, deposit 1BTC to buy 0.5BTC), and at least initially, you would need to force the user to wait 3-6 months before they broke even.

It would then take a number of years to build enough trust to make the system usable for reasonable amounts in a reasonable time.

In that time, a person seeking to buy bitcoin could easily build up a decent reputation on #bitcoin-otc, probably find some people in real life to verify him and sign his crypto key.


I see what your saying.  Deposit could be 1 for 1  and 3-6 months get the deposit back would be to long. The typical scammer would chargeback right away or if its a fraudlent card the card would be picked up as such before 3-6 months. This is for small amounts $1 -$5 worth of bitcoins btw.  Interesting points you bring up!
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February 05, 2013, 09:22:48 PM
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I don't think most legit people interested in buying $1 to $5 in BTC (who does that anyways) are willing to wait 3-6 months to get their coins.  I mean I'll do it right now.  Anything up to $100 @ MtGox last price, no deposit needed and you get your coins (minus 5% fee) in 6 months. 

How many coins do you want?  My guess is 0 right?
buybtc
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February 05, 2013, 09:24:44 PM
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I don't think most legit people interested in buying $1 to $5 in BTC (who does that anyways) are willing to wait 3-6 months to get their coins.  I mean I'll do it right now.  Anything up to $100 @ MtGox last price, no deposit needed and you get your coins (minus 5% fee) in 6 months. 

How many coins do you want?  My guess is 0 right?

Hey D & T,

There are a bit of people who want small amounts of bitcoins there is a market there. Agreed - nobody is going wait that long but the drip will send it back and the less signs off fraud/chargebacks the more the amount is sent back. This isn't for me lol ...this was just an idea I was throwing around.
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