Why should I, a vendor, accept bitcoins?

[Meatpile]

1. INSTANT SECURED PAYMENT worldwide at any hour or day with no downtime ever with no prohibitive fees or taxes attached (YOU get 100% of the price asked)
2. NO CHARGE-BACKS EVER. If a client is not satisfied or a mistake has been made, you will manually interact with the client, this creates further value for your business but also some costs.
3. REAL TIME FOREX between BTC and USD at any hour or day using for example mtgox (this could help you lock in your daily prices, as well as give you a slight margin of profit, and you can withdraw your funds to your bank later)
4. FLEXIBLE PRICING - people understand variations in the value of BTC, which will level up later in the future, and you can charge a bit more in BTC than you do in USD, people won't mind. If you feel generous you can interact with the client and offer him bonuses or discounts for the future, based on the price discrepancy he accumulated.
5. DEFLATIONARY VALUE present in all bitcoins, as the future gets nearer, their actual value will increase for new coins, and with it for ALL existing coins. This means you don't need to store your funds in an interest-gaining bank account, simply holding them in your e-wallet does the trick.

I can't tell if these are uninformed lies or just hyperbolic marketing speak?
1: There is nothing instant about bitcoins, you have to wait minutes to hours to make sure the transaction went through. If you accept bitcoins instantly, then you are opening yourself to a double spending attack and getting no payment

3: These forums are full of people being hit with Mtgox transfer restrictions about it taking days or a week to exchange.

4: flexible pricing isn't good for a business. Either you are charging too much "incase" of another market slump or you are getting less than you thought you were.

5: "keeping your money in bitcoins will make them worth more and more forever!!"  Is complete speculation, and a business can not run on such a thing.

[1714795020]

1714795020

[BombaUcigasa]

1. INSTANT SECURED PAYMENT worldwide at any hour or day with no downtime ever with no prohibitive fees or taxes attached (YOU get 100% of the price asked)
2. NO CHARGE-BACKS EVER. If a client is not satisfied or a mistake has been made, you will manually interact with the client, this creates further value for your business but also some costs.
3. REAL TIME FOREX between BTC and USD at any hour or day using for example mtgox (this could help you lock in your daily prices, as well as give you a slight margin of profit, and you can withdraw your funds to your bank later)
4. FLEXIBLE PRICING - people understand variations in the value of BTC, which will level up later in the future, and you can charge a bit more in BTC than you do in USD, people won't mind. If you feel generous you can interact with the client and offer him bonuses or discounts for the future, based on the price discrepancy he accumulated.
5. DEFLATIONARY VALUE present in all bitcoins, as the future gets nearer, their actual value will increase for new coins, and with it for ALL existing coins. This means you don't need to store your funds in an interest-gaining bank account, simply holding them in your e-wallet does the trick.

I can't tell if these are uninformed lies or just hyperbolic marketing speak?
1: There is nothing instant about bitcoins, you have to wait minutes to hours to make sure the transaction went through. If you accept bitcoins instantly, then you are opening yourself to a double spending attack and getting no payment

3: These forums are full of people being hit with Mtgox transfer restrictions about it taking days or a week to exchange.

4: flexible pricing isn't good for a business. Either you are charging too much "incase" of another market slump or you are getting less than you thought you were.

5: "keeping your money in bitcoins will make them worth more and more forever!!"  Is complete speculation, and a business can not run on such a thing.

It's marketing. Now why do you call me a liar?
1. Hours? Really? Now you're lying... You could go with one confirmation for trusted clients (currently that would take 3 minutes 15 seconds on average) , because it means the network has locked that transaction into the blockchain.

If you're paranoid, then go with 6 confirmations (supposedly one hour, but more likely 40 minutes). Depending on the type of shop, the wait time is not really a big deal, and the wait time is effectively ALL the process between consumer action and account credited. You don't have to wait for credit card gateways, enter payment details, passwords, confirmations, international transfers, banking days, etc.

For websites and online services the transactions are virtually instant, once your payment is confirmed you are good to go, everything is done. For brick and mortar
Also, as far as I know, nobody reported a transaction being validated and then being unvalidated from the blockchain. I don't know how "sure" you want to be, but we are at block 130340 btw...

3. I don't see the relevance. Once you set up your accounts and workflow, you can move funds from your wallet to your exchange wallet instantly (* refer to above as to what is instant for me and not for you), while banking exchanges take the regular number of days just like in regular currency payments. The idea is to receive payments in BTC and use them in B2B and other ways, not just "hurr durr let's complicate ourselves with making people buy bitcoins, pay us in bitcoins, we sell the bitcoins and then we get the actual money". No, the whole idea of the project is to use a large proportion of incoming bitcoins for own operations and expenses. Once you have the bitcoins, you can convert them at any price you want, or not, and if you do, you can retrieve the money in your account (if necessary, otherwise mtgox is like a bank).

4. People will on average pay more than intended when using bitcoins, because the value of the bitcoin increases in time, you need to constantly lower your pricing to accomodate this, because...

5. If you read the bitcoin paper, the bitcoin mining theory threads, the actual bitcoin mining results, history charts, technical details on blockexplorer, the deflation article on wikipedia, you will understand why it's not speculation but a mechanism built into the system. Stop assuming bitcoin works like other things you are familiar with.

On the other hand, are you a vendor? Did you sell anything for bitcoin so far? Do you want to sell your products or services for bitcoins? If not, why the hell to you blab about my reply with your misconceptions?!

[im3w1l]

Its is very simple OP. People wanting to with bitcoins want to do it because of the coolness, and ideological reasons. This means that they probably wont mind a mark up high enough to cover your currency risk plus some extra

[casascius]

I, too, am a small business owner and have thought of the very same concerns.  

Reasons for accepting Bitcoin from my perspective include the following.

1 - helping to legitimize cryptocurrency in the eyes of the public, BECAUSE
2 - accepting cryptocurrency represents a small but meaningful revolution of the public against the banking industry.
3 - it also offers some sort of competitive pressure on the government and central banks to treat us as the public fairly.

4 - if you're a merchant who runs a high risk of having payments reversed (e.g. credit card companies that typically side with the consumer wherever possible), Bitcoin is a remedy for that.

As a side bonus, if what you have is of value to the Bitcoin community, then you'll get an extra focus on it because, in my estimation, a whole lot of people are going to be buying Bitcoins just to own a few (I did) and may not be interested in using them to buy illegal drugs.  They'll want somewhere to spend them.

If an instant conversion to dollars is necessary for operational reasons, and someone hasn't already provided that, I believe the market will recognize the need and provide it soon.

[TradersEdgeDice]

The cat is out of the bag.  The genie is out of the bottle.  However you want to put it, fiat money is toast.  Crypto currencies are the future. 

That said, timing for me as a merchant accepting bitcoin was fortuitous.  I am on my last block of inventory for my metal dice.

I started selling them in 2008 so there was not even a chance to get a bitcoin symbol on them. (why it isn't on the die is the number one question sent to me by people here.)

So I am in a position to experiment.

To get over gresham's law, a discount.

That's something I can do.

Justifying a new product catering to bitcoin would require finishing off my inventory in BTC.

When I have the BTC that came from clients, the next mission is convincing my factory to accept the BTC rather than a wire transfer.

In principle, they are okay with it.  The volatility in the exchange rate might make them flinch at crunch time.  I hope it doesn't.

I control what I can control.  I calculate risk where control is limited.  I make a decision to gamble or not when most information is unknown.

It's not my day job so I guess I can be more cavalier about how I engage in bitcoin commerce.

If it ends up higher when I need it in a different currency than it was when I sold a set of dice for it, I consider that a win.

I won't be playing with the exchange rates every day anyway.  I would suggest you find ways to avoid the exchanges as well.

[upisdown]

I see it as an untapped market. I'm a vendor and if I accept bitcoins - it opens up my store to more people.

[InASpiral]

Wow thank you for all the responses.


So I am seriously considering accepting bitcoins for virtual goods in my companies upcoming Free2Play shooter/RPG. So assuming from a financial perspective that bitcoins are dependable, is it LEGAL to support bitcoins? (Keeping in mind that the game is not a gambling game, and the virtual products are bought and then kept by the user)

I know that bitcoins themselves are not illegal, but in the depths of US law I am concerned that there is some vague all encompassing restriction that bitcoins may fall under. Now I understand that the question itself is somewhat speculative, since we don't really know how the government will react to bitcoins when it grows out of its niche, but is there any legal concerns I should be aware of?

[MoonShadow]

Wow thank you for all the responses.


So I am seriously considering accepting bitcoins for virtual goods in my companies upcoming Free2Play shooter/RPG. So assuming from a financial perspective that bitcoins are dependable, is it LEGAL to support bitcoins? (Keeping in mind that the game is not a gambling game, and the virtual products are bought and then kept by the user)

I know that bitcoins themselves are not illegal, but in the depths of US law I am concerned that there is some vague all encompassing restriction that bitcoins may fall under. Now I understand that the question itself is somewhat speculative, since we don't really know how the government will react to bitcoins when it grows out of its niche, but is there any legal concerns I should be aware of?

Yes.  The most likely classification under US tax laws that Bitcoin would fit into is a "stored value" digital asset.  So as a business openly engaging in Bitcoin trading for goods and services, there is the possibility that the law could interpret part of your company as a money services business, and thus subject to such laws. 

[optimex]

You should accept bitcoins... But if you just accept Paypal it would also be fine.

[Jessy Kang]

Why should I sell my tangible products, and/or my virtual products for bitcoin? (I feel my company and what I sell should remain nameless to prevent thread derailment, but the tangible goods go for $50 - $150, and virtual goods go for $2 - $8)

I should have Analytics traffic numbers in a week to offer other prospective merchants.

I feel that without a separate forum for vendor/merchant (non-exchange) issues accepting Bitcoin at this point is unwise. The software is not there, there will be significant overhead in technical support for clients who screw up their transactions- and no dedicated venue for collectively solving these problems. If you don't like it some random Mod may kill your thread- hard way to run a business.

When the Bitcoin community decides they want vendors and puts the same effort in there as they do into mining and exchange, there will be a flood of capital and new software. But most people are here to mine and trade and that is what the forum caters to.

Just my two cents as a vendor.

[Alik]

If you want to tank Bitcoin go ahead.  Hard coding exchange rates will be no different than the Elites deciding how much we pay for a barrel of oil regardless of how much oil is available.

I think developers are going ot have to start hardcoding exchange rates into their prices. I don't know how sites like bitmunchies.com do it. They must have sometype of system that auto updates depending on exchange rates.

The elite quote was very well said. Good man.

[BombaUcigasa]

The cat is out of the bag.  The genie is out of the bottle.  However you want to put it, fiat money is toast.  Crypto currencies are the future. 

That said, timing for me as a merchant accepting bitcoin was fortuitous.  I am on my last block of inventory for my metal dice.

I started selling them in 2008 so there was not even a chance to get a bitcoin symbol on them. (why it isn't on the die is the number one question sent to me by people here.)

What is your comment on the deflationary nature of bitcoin and the appreciation of the bitcoin you hold (if you still kept most of the bitcoin income).

When I have the BTC that came from clients, the next mission is convincing my factory to accept the BTC rather than a wire transfer.

In principle, they are okay with it.  The volatility in the exchange rate might make them flinch at crunch time.  I hope it doesn't.

The fact that every business will start accepting bitcoin will soon mean B2B naturally starts working with bitcoin.

Do you or your partners find the instant payment, non-taxation and the low fees attractive when using bitcoins?

[MoonShadow]

Wow thank you for all the responses.


So I am seriously considering accepting bitcoins for virtual goods in my companies upcoming Free2Play shooter/RPG. So assuming from a financial perspective that bitcoins are dependable, is it LEGAL to support bitcoins? (Keeping in mind that the game is not a gambling game, and the virtual products are bought and then kept by the user)

I know that bitcoins themselves are not illegal, but in the depths of US law I am concerned that there is some vague all encompassing restriction that bitcoins may fall under. Now I understand that the question itself is somewhat speculative, since we don't really know how the government will react to bitcoins when it grows out of its niche, but is there any legal concerns I should be aware of?

Yes.  The most likely classification under US tax laws that Bitcoin would fit into is a "stored value" digital asset.  So as a business openly engaging in Bitcoin trading for goods and services, there is the possibility that the law could interpret part of your company as a money services business, and thus subject to such laws. 

But from a legal standpoint, is it really any different than all the other MMO's out there that sell a virtual currency for their game which can be used to buy in-game items? Hell, Entropia Universe from Mindark has a real in-game economy tied to the USD, with 10 PED = 1 USD, and the PED's can be exchanged back out for money directly from MindArk. I think they even opened a real world bank based around it tied to the in-game bank.

That game has been running for many, many years and is well known. So if they haven't been pursued by the government yet, I doubt OP would be.

Bitcoin is probably not legally different than from any in game currency, just accepted wider by design.  Still, just because the US Treasury Department isn't concerned about the tiny market that Mindmark oversees doesn't mean that those same regs don't apply to them.  The yprobably do, regardless of whether or not the USTD has ever intervened into that market.

[krom]

OPs question is what i'm asking myself for a couple of days now and i've found no reasonable explanation yet, besides "BC is teh future!".

Exchange rate is fluctuating extremely and is too easily influenced by lots of factors right now, which makes it a pure gamble to accept bitcoins for goods that you've payed real money for, imho.

Bitcoin exchange rate needs to be somewhat stable, before i'd personaly would accept them as a payment option. You never know what they will be worth the next hour/day.
Playing around with the money on the exchanges is something for banksters, not merchants. At the end, as a merchant, you've payed real money for the goods you sell and you have real bills to pay.

What am i missing?

[tcpip4lyfe]

Kind of what I am wondering as well.  I'm new too this but it seems like this whole thing is nothing but speculation.

[MoonShadow]

OPs question is what i'm asking myself for a couple of days now and i've found no reasonable explanation yet, besides "BC is teh future!".

Exchange rate is fluctuating extremely and is too easily influenced by lots of factors right now, which makes it a pure gamble to accept bitcoins for goods that you've payed real money for, imho.

Bitcoin exchange rate needs to be somewhat stable, before i'd personaly would accept them as a payment option. You never know what they will be worth the next hour/day.
Playing around with the money on the exchanges is something for banksters, not merchants. At the end, as a merchant, you've payed real money for the goods you sell and you have real bills to pay.

What am i missing?

The price has been volitile as of late do to the massive influx of new users, like yourself, who only recently discovered Bitcoin.  Only some of those new users are going to be concerned about buying a few bitcoin now, but enough that with a market as thin as Bitcoin is at present, that's enough to move it quite a bit.  There are vendors who accept Bitcoin, however, by using a price update script that takes the 24 hour weighted average price from bitcoinwatch.com and changing their prices automaticly one or more times per day.  Those who are concerned about the voltility of bitcoins can then sell those same coins on MtGox automaticly at that same price almost immediately by using their MtGox business account to produce their bitcoin addresses.  Most vendors have started out in Bitcoin by selling all or part of their received bitcoin immediately in this fashion, but most move to the point of accumulation of Bitcoins.

[Longmarch]

A few years back someone had a site selling Egold or something of that sort. The Feds or Secret service, one of those agencies came in and arrested him for trying to offer another currecy in the USA.

...

Therefore... blah blah

Anyone even thinking of accepting bitcoins on a traceable site in USA is absolutely crazy.

In life, you will find it helpful to base your absolutes and final conclusions on solid facts rather than half-remembered stories.   

[krom]

OPs question is what i'm asking myself for a couple of days now and i've found no reasonable explanation yet, besides "BC is teh future!".

Exchange rate is fluctuating extremely and is too easily influenced by lots of factors right now, which makes it a pure gamble to accept bitcoins for goods that you've payed real money for, imho.

Bitcoin exchange rate needs to be somewhat stable, before i'd personaly would accept them as a payment option. You never know what they will be worth the next hour/day.
Playing around with the money on the exchanges is something for banksters, not merchants. At the end, as a merchant, you've payed real money for the goods you sell and you have real bills to pay.

What am i missing?

The price has been volitile as of late do to the massive influx of new users, like yourself, who only recently discovered Bitcoin.  Only some of those new users are going to be concerned about buying a few bitcoin now, but enough that with a market as thin as Bitcoin is at present, that's enough to move it quite a bit.  There are vendors who accept Bitcoin, however, by using a price update script that takes the 24 hour weighted average price from bitcoinwatch.com and changing their prices automaticly one or more times per day.  Those who are concerned about the voltility of bitcoins can then sell those same coins on MtGox automaticly at that same price almost immediately by using their MtGox business account to produce their bitcoin addresses.  Most vendors have started out in Bitcoin by selling all or part of their received bitcoin immediately in this fashion, but most move to the point of accumulation of Bitcoins.

Thanks for your explanation. If you are able to adjust prices regulary and (quickly) convert them to real cash automagically, this should work. I didn't think about that (and i should have *blush*).

[dinker]

I have to say at this time it's hard for any vendor to accept BTCs without risks.
The only benefit I can see is if you start early you get a bigger portion of the BTC market once it takes off.

[contentkaiser]

As a vendor, I accept Bit Coin for a number of reasons. 

1) My primary good is intangible (writing services, chiefly academic essays) and thus it represents only my own labor and the labor of my employees. My costs are relatively stable, and I'm fairly certain that short a complete collapse of BitCoin, I will be able to meet at least my basic costs through my BitCoin margins.  Thus, it is only my profit that is affected by swings in the currency value, and I am willing to risk the devaluation of my currency based on my ideological support for BitCoin.

2) Anonymity.  Can't stress how important this is to both myself and my clients.

3) Exposure: The kinds of people who use BitCoin are just the kind of technologically savy individuals who (from my market research) are more likely to be enrolled part or full time in academic programs, greatly weighted towards distance education.