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Author Topic: Next week, I am accepting Bitcoin as a payment option: Question about rate.  (Read 717 times)
jdany
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May 25, 2013, 12:52:37 PM
 #1

With the swing in value, I can't adjust Bitcoin pricing every day.  So, I am trying to put together a conversion formula that won't lose money, but also won't overprice the payment method.
How are other people doing pricing?
A markup over 7 day exchange average?

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swordfish6975
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May 25, 2013, 01:33:18 PM
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A guy I use to buy BTC from use to do a markup over the highest trade price on MT Gox in the last 24h.

Was a automated thing on his website though.

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nitrous
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May 25, 2013, 02:34:36 PM
 #3

With the swing in value, I can't adjust Bitcoin pricing every day.  So, I am trying to put together a conversion formula that won't lose money, but also won't overprice the payment method.
How are other people doing pricing?
A markup over 7 day exchange average?



Are you planning on accepting bitcoins but then trading them back for fiat? If so, you might want to try using https://bitpay.com instead of trying to handle the price swings yourself.

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jdany
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May 25, 2013, 03:09:19 PM
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I'm trying to accumulate Bitcoins at this point.  If I can get a few Bitcoins a week through the shop, I'll just keep them in Bitcoin.
Which is how I foresee this going down.

If I accumulate more than I expect, I'll need a good reliable conversion service.
But I don't think that will be necessary.
nitrous
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May 25, 2013, 05:59:47 PM
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I'm trying to accumulate Bitcoins at this point.  If I can get a few Bitcoins a week through the shop, I'll just keep them in Bitcoin.
Which is how I foresee this going down.

If I accumulate more than I expect, I'll need a good reliable conversion service.
But I don't think that will be necessary.


There are a lot of factors to consider here, and I don't really have any experience with this to give any good insight. Nevertheless, I guess your strategy will depend on what types of goods/services you're selling, what your expenses are, and how much financial security you need to maintain to protect yourself against temporary price variations and crashes, which will happen anytime, anywhere, and most likely, when least convenient! As long as you include enough of a margin, use some kind of volume-weighted average price to moderate your prices, and regularly cash out to reduce your risk though, I would think you should do well with btc.

Most important though, I think, is to come up with a strategy for what to do if the price does go down and you have a significant btc holding. Do you cash out early to cut your losses or wait it out? The same for if the price goes up, at what price do you sell, and make sure you stick to that. On the other hand, if your intention really is to just accumulate bitcoins, perhaps your strategy should be to remain oblivious to the price and just focus on the amount of btc you have instead of the amount of fiat it's worth.

It may seem like I'm giving some conflicting advice, sorry, I'm just thinking out loud (so to speak). What you end up doing depends on what is most important to you and your specific situation. Perhaps if you link to your shop and give us some more information of what you want to get out of accepting btc we could give you some better tailored advice specific to you Smiley

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Lethn
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May 26, 2013, 07:40:50 AM
 #6

I actually think Bitcoin merchants need to keep Bitcoin prices completely seperate from the USD, the thing people don't realise is that it's not 'Bitcoin' itself that's being volatile it's the exchange rate and the USD, the USD is the only thing that is changing constantly which is why the price is so volatile. I've decided now that I'm just going to set the prices seperately, if no one buys anything, then I'll assume I either need to work on the quality of the product or up the price.

There is a comfort in knowing that there's an absolute limit to the amount of a currency you have but this shows you just how fucked up things are, don't rely on the USD, if customers have a problem with that then I think that's them relying on the currency too much.
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