Creating a Bitcoin Buying / Selling Service

[nelisky]

On the other hand I found these virtual visa cards at the post office today - http://www.virtualvcard.com.au/


If I purchased one of them I could just email the code to the other party to buy bitcoins . That would be a totally risk free way of transacting.

That would be great, if you could use them without needing an AUS address... but it surely is one step forward in transfering money, as the buyer needs not receive any details from the seller and vice-versa. You will still be bound to the scrutiny of VISA, though, but I guess that is not a blocker.

If only you could register a foreign county's address

[Bruce Wagner]

After all the research Ive done this is the best possibility I could find for exchanging bitcoins.
http://www.xe.com/fx/

Xe.com sells bitcoins?  I can't find any reference to Bitcoin on their site at all...

Or if everyone on the forum became a bitcoin retailer for face-to-face transactions in their city, that might help too.

That's a great idea too!   What if someone were to set up a web page.... that's sort of a directory of individuals who are willing to do face-to-face cash transactions for bitcoin...   Listed sorted in order by:   country / state / city....

It could list individuals, small stores, maybe even eventually local chain stores, and/or currency exchange/check cashing stores... all that are willing to sell bitcoin for cash.

The list will just grow and grow...   :-)

This could be one of the simplest easiest ways....   second only to being able to purchase them online with a credit card.

I think, for the new user, the ideal easiest way to buy bitcoin would be:

(1)     to buy them online with a normal credit card (if they can wait 90 days for access to them)
(2)     to buy them face-to-face at from a local source with cash  (if they want them immediately)
(3)     to buy them with cash by mail  (if they want them in 2-4 days)

[Anonymous]

On the other hand I found these virtual visa cards at the post office today - http://www.virtualvcard.com.au/


If I purchased one of them I could just email the code to the other party to buy bitcoins . That would be a totally risk free way of transacting.

That would be great, if you could use them without needing an AUS address... but it surely is one step forward in transfering money, as the buyer needs not receive any details from the seller and vice-versa. You will still be bound to the scrutiny of VISA, though, but I guess that is not a blocker.

If only you could register a foreign county's address

You only need to look like you are in Australia.
Hypothetically ..... use a vpn to tunnel into the site with an Australian IP.
Do you think they would go to the trouble of tracking you down because you exchanged bitcoin ?
Ill just leave this here...
http://www.fakenamegenerator.com/

[nelisky]

On the other hand I found these virtual visa cards at the post office today - http://www.virtualvcard.com.au/


If I purchased one of them I could just email the code to the other party to buy bitcoins . That would be a totally risk free way of transacting.

That would be great, if you could use them without needing an AUS address... but it surely is one step forward in transfering money, as the buyer needs not receive any details from the seller and vice-versa. You will still be bound to the scrutiny of VISA, though, but I guess that is not a blocker.

If only you could register a foreign county's address

You only need to look like you are in Australia.
Hypothetically ..... use a vpn to tunnel into the site with an Australian IP.
Do you think they would go to the trouble of tracking you down because you exchanged bitcoin ?
Ill just leave this here...
http://www.fakenamegenerator.com/

*gasp* I know I'm not keeping up to date when I didn't even consider the possibility of that service existing in the first place... not that I would ever use it, of course

[Bruce Wagner]

There is a very common misnomer that I'd like to address.  Someone above said that using alternative currencies is illegal "in most countries".   I meant to answer that, but forgot to.

I'm not sure about "most countries".   I can only speak for the US.  But here in the USA, using your own made-up currency is absolutely 100% legal.  I've watched television PBS documentaries about it where they explain...  That many people assume that it's not legal, but in fact it is 100% legal.

For example, there are many small communities that have created their own currencies as an incentive to shop in the local main street stores.   Retailers, for example, might sell you $100 BoulderBucks for $90.  That $100 BoulderBucks can then be spent at any of the stores on Main Street in Boulder at its face value. (%100).  They print bills in all denominations.  And even the local BANK branches sell BoulderBucks for USD cash.   (I made up "Boulderbucks" But google it and YouTube it. There are many real examples of this happening in the US.)   It is totally legal.

There is another common misnomer.   People think that the Liberty Dollar people got in trouble for creating an alternative currency.  Not True!   They got into trouble ONLY because they were accused of trying to pass their coins off as US official currency.   In other words, it LOOKED TOO SIMILAR TO US official federal reserve currency.  

That's why it is important that the "BoulderBucks" come in purple and pink and yellow.  That they are a different size than federal reserve notes.   And they do NOT call themselves "dollar" or "cash", etc.  

A good analogy might be:   It's perfectly legal for a mall, hospital, large building, shopping district, neighborhood ... to hire and have their own private security officers.    It's NOT legal if they call themselves "Police".    It's the act of "impersonating an officer" that is illegal.  

Similarly, it's Only the act of "impersonating real federal reserve currency" that is illegal --- and what shut down the Liberty Dollar.   ( I often think, if they had made them square, with a hole in the middle, never called them coins or dollars -- just "Liberties", for example, they'd still be going strong today.)

But now we have something perhaps better than silver liberties to buy coffee with, or tip or shop online with......   digital "currency".    Bitcoin.

Another point I'd like to make:    In fact, there IS a precedent for selling "digital virtual goods" for cash.     These games on Facebook like Farmville, and many other online miltiplayer games SELL VIRTUAL DIGITAL ITEMS to players for real money.   There's certainly nothing illegal about that.  Presumably someone could then sell that virtual item to another player for money too, and get his money back.   If That's how it works, there's certainly nothing illegal about simply SELLING bitcoin for cash.  (At least not here in the USA).

However, if you were selling bitcoin for cash to someone in the US, and also selling cash for Bitcoin to someone in Iran.... then they might just look at the whole digital pathway as one big money transmission system, and accuse you of running an unlicensed "money transmission" service.    This seems especially likely If You're dealing with large amounts of money, and sending and receiving it from every country globally.

On the other hand, if local BANKS legally sell "BoulderBucks" for cash, and these BoulderBucks can legally be spent for goods and services on Main St...  Why then couldn't we legally do EXACTLY the same thing with Bitcoin.     Only difference is:   It's digital instead of printed on funky purple and pink paper.  

Another side point:  I'd be willing to bet that those local retailers and banks who sell "BoulderBucks" (or whatever they call them), are NOT charging sales tax when they "sell" BoulderBucks.  The justification is that the retailers on Main St are charging sales tax, when the goods and services are actually being sold.    So there is a precedent for NOT charging sales tax when selling bitcoin.

On the other hand, these online games like Farmville, sell "virtual digital items" (like seeds or clothing or whatever) to players.  I bet they do charge sales tax - if the company is in the same state.  Can anyone verify if that's true?  If so, that might be a precedent that one SHOULD charge sales tax "on the sale of a virtual digital item".   Who knows?

One last thought:  I believe that that laws in Canada must be very similar to the US regarding private currencies.  Google: "Canadian Tire Money" ....for a big surprise ...if you don't already know about it.

[FatherMcGruder]

To my understanding, a merchant can only qualify for chargeback protection from Paypal or Google Checkout if they sell tangible goods because shipping services can establish proof of delivery. Therefore, to sell bitcoin with the help of something like Paypal, the merchant could mail a trackable envelope containing a certificate to the buyer. Such a method would deter credit card thieves and satisfy the tangible goods requirement for chargeback protection.

[Bruce Wagner]

Proof of delivery of an empty envelope won't prevent a chargeback.
Mailing a "receipt" (in effect) does not qualify as tangible goods.
And none of that will help if the credit card number is stolen.

[FatherMcGruder]

Proof of delivery of an empty envelope won't prevent a chargeback.
Mailing a "receipt" (in effect) does not qualify as tangible goods.
And none of that will help if the credit card number is stolen.

But if you send something tangible to the billing address, you give the real credit card owner a chance to let you know if he really wants the bitcoins or if someone compromised his card. Should cut down on the part of the problem presented by credit card thieves, no?

[Bruce Wagner]

But if you send something tangible to the billing address, you give the real credit card owner a chance to let you know if he really wants the bitcoins or if someone compromised his card. Should cut down on the part of the problem presented by credit card thieves, no?

No.   It's an idea on the right track....   But too little, too late.     And you're mixing two different issues.

The guy's already GOT the bitcoins.   Unless you make him wait a week or eight.... to see if you hear anything back from the cardholder.    And what if the cardholder just IGNORES your package.   You're still not off the hook.  The bank can just TAKE your money right back out of your merchant account... up to 6 months later!!!

The sending "something tangible"...  Forget that.  A receipt or invoice is not "something tangible"...    And besides, the only purpose for that is to avoid chargebacks.

Fraud is NOT the same as a customer-initiated chargeback.  Fraud is when someone uses a stolen credit card number....  not when the customer changes his mind....  or decides to say he never received "the goods".

I think http://BitcoinGateway.com has pretty much solved both of these problems.    He actually CALLS the issuing bank.  Verifies that cardholder's phone number.  Then CALLS the cardholder, and records the call.

This prevents fraud.   He actually spoke to the cardholder (unless the fraudster also commandeered the cardholder's phone line too!)   He recorded the call, which is evedence that the customer ordered "the goods".