Why doesnt someone make a cash only exchange?

[empoweoqwj]

Or localbitcoins.com :-)

Yes, I don't understand why everyday someone comes up with a proposal for some BTC-cash exchange mechanism that has already been (more or less) solved by localbitcoins.com.

Why the resistance to using localbitcoins?

Perhaps the OP had never heard of localbitcoins.com

[1715384281]

1715384281

[1715384281]

1715384281

[coins101]

Because one shop would have  to spend bucketloads of money complying with anti-money laundering regulations. Bitcoin ATMs solve the problem in a much more economical way.

What makes you think that FinCEN is going to consider Bitcoin ATMs to be exempt from AML?  Believe me, they won't.  That's why it's been so hard to get them going.

But I agree that cash businesses also must comply with AML if they want to stay out of jail, BUT cash businesses don't have to put up with banks cutting them off at every turn.  And if we develop our own clearing houses....

I believe there are bitcoin ATM machines planned for at least two cities in America soon. I might be wrong.

One of the first ATMs was made in the USA, but first used in Canada because of the regulatory issues in the USA.

[empoweoqwj]

Because one shop would have  to spend bucketloads of money complying with anti-money laundering regulations. Bitcoin ATMs solve the problem in a much more economical way.

What makes you think that FinCEN is going to consider Bitcoin ATMs to be exempt from AML?  Believe me, they won't.  That's why it's been so hard to get them going.

But I agree that cash businesses also must comply with AML if they want to stay out of jail, BUT cash businesses don't have to put up with banks cutting them off at every turn.  And if we develop our own clearing houses....

I believe there are bitcoin ATM machines planned for at least two cities in America soon. I might be wrong.

One of the first ATMs was made in the USA, but first used in Canada because of the regulatory issues in the USA.

I know where they were made, but they announced they would actually place in at least 2 US cities very soon ........ can't find the article now though.

[Walter Rothbard]

Its a simple idea, leverage the advantages of the devision of labor in order to overcome government meddling.

The exchange would open up shop probably in either los-angales or new york and would only accept deposits in the form of cash at the front counter. The exchange would be safe from a myriad of legal trappings which would allow them to focus 100% on the service they are intended to provide and the market could innovate highly decentralized mechanisms of getting cash from one side of the country and into the front door of the building. Decentralized community of peers working within the framework of a reputations systems could provide the money transmission instead of some big payment processing company. As an example, suppose we have two brothers, one lives next to the exchange and another 1000 miles away. The one brother could take payments and the other would make deposits and when ever they visited each other periodically they would clear out the debt between each other, always operating within the black or gray market.

There may be a really good reason why this doesn't exist and i just havn't thought about it yet.

It sounds like a dream come true.  I know the government would make it impossible because they feel the urge to look into all financial transactions.  In real life we call this busybodyness and let our neighbors know that they aren't welcome to pry that closely, but when people win popularity contests they feel it gives them the right to do this kind of thing and to even prevent some transactions - and to punish you if you don't comply.

Another thing I would like to see is a precious metals exchange.  This could operate a little bit like those "cash for gold" places that sprung up the last five years.  You send in your gold and silver jewelry or junk or whatever and receive credit on the exchange (minus an appraisal fee and other fees, most likely).  The exchange facilitates trading between grams of gold, grams of silver, and units of cryptocurrency.  When you want to withdraw gold or silver the exchange would probably permit doing so in defined units such as nationally minted bullion coins or silver rounds.  Again, likely minus a fee for shipping, insurance, security, etc.

Somebody please make this happen!

Sometimes I want to cry thinking of how great the world would be if all of this could be done and how it isn't likely to happen anytime soon and I may not live to see it.

[Walter Rothbard]

Well, besides the fact that you have basically described the Hawala system, which may or may not be the funder of global terrorism (I mean, what good idea ISNT funding global terrorism in the eyes of the government these days), you are also kind of describing Me, You, Email, a bag of cash and starbucks.

Or localbitcoins.com :-)

Rabbit, you educate me every day.  I'd never heard of Hawala.

[Walter Rothbard]

All the posts about Bitcoin ATMs and localbitcoins.com are missing the point - an exchange.  The problem being considered is not "how to purchase Bitcoin with fiat."  The problem is "how to facilitate cash deposit and withdrawal on an exchange."  These are two different problems.

The cash only Bitcoin exchange idea makes my heart leap for joy, but I don't think it could work with current laws.

[cspeter8]

Perhaps this might be a good idea to pass on to entreprenerial shops on indian reservations that sell cigarettes without the usual tax.  They can also buy and sell bitcoin for USD maybe?

[QuestionAuthority]

Perhaps this might be a good idea to pass on to entreprenerial shops on indian reservations that sell cigarettes without the usual tax.  They can also buy and sell bitcoin for USD maybe?

Indian reservations are just likes states and have no autonomy from federal laws. They are treated like states when running a business. Indian "Smoke Shops" only sell cigarettes without the state tax but you still pay federal excise taxes which are included in the sale price. It would be the same as driving to Nevada to buy cheap cigarettes and taking them back to California. Avoiding the state tax is still quite a bonus and can be very high depending on which state the reservation is located. It's federal law that requires Bitcoin businesses be licensed and comply with AML/KYC so that would still apply on an Indian reservation.

[jojo69]

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

[QuestionAuthority]

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

That could work. Certain forms of gold which trade as commodity contracts fall under the Broker Reporting Act of 1982. Specifically named are South African Krugerrands, Canadian Maple Leafs, and Mexican gold Onzas in quantities of 25 ounces (one 'contract') or more. Sales of these in contract quantities require a 1099B IRS information form, reporting the sale of a regulated commodity contract. There is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S. Mint strikes the gold Eagle bullion coins so I wouldn't trust selling their coins but everything else should be fair game.

[Anon136]

Its a simple idea, leverage the advantages of the devision of labor in order to overcome government meddling.

The exchange would open up shop probably in either los-angales or new york and would only accept deposits in the form of cash at the front counter. The exchange would be safe from a myriad of legal trappings which would allow them to focus 100% on the service they are intended to provide and the market could innovate highly decentralized mechanisms of getting cash from one side of the country and into the front door of the building. Decentralized community of peers working within the framework of a reputations systems could provide the money transmission instead of some big payment processing company. As an example, suppose we have two brothers, one lives next to the exchange and another 1000 miles away. The one brother could take payments and the other would make deposits and when ever they visited each other periodically they would clear out the debt between each other, always operating within the black or gray market.

There may be a really good reason why this doesn't exist and i just havn't thought about it yet.

It sounds like a dream come true.  I know the government would make it impossible because they feel the urge to look into all financial transactions.  In real life we call this busybodyness and let our neighbors know that they aren't welcome to pry that closely, but when people win popularity contests they feel it gives them the right to do this kind of thing and to even prevent some transactions - and to punish you if you don't comply.

Another thing I would like to see is a precious metals exchange.  This could operate a little bit like those "cash for gold" places that sprung up the last five years.  You send in your gold and silver jewelry or junk or whatever and receive credit on the exchange (minus an appraisal fee and other fees, most likely).  The exchange facilitates trading between grams of gold, grams of silver, and units of cryptocurrency.  When you want to withdraw gold or silver the exchange would probably permit doing so in defined units such as nationally minted bullion coins or silver rounds.  Again, likely minus a fee for shipping, insurance, security, etc.

Somebody please make this happen!

Sometimes I want to cry thinking of how great the world would be if all of this could be done and how it isn't likely to happen anytime soon and I may not live to see it.

it would be neat. im sure you couldnt escape every regulation, obviously. but perhaps it would atleast make fewer of them apply to you.

[empoweoqwj]

All the posts about Bitcoin ATMs and localbitcoins.com are missing the point - an exchange.  The problem being considered is not "how to purchase Bitcoin with fiat."  The problem is "how to facilitate cash deposit and withdrawal on an exchange."  These are two different problems.

The cash only Bitcoin exchange idea makes my heart leap for joy, but I don't think it could work with current laws.

You've hit the nail on the head. And nobody is going to change the laws. Hence the idea doesn't work.

If you make it "cash only" you are attempting to bypass all the AML and KNC stuff. This just ain't gonna fly folks. The government spents a lot of money attempting to know who is sending money to who.

[jojo69]

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

That could work. Certain forms of gold which trade as commodity contracts fall under the Broker Reporting Act of 1982. Specifically named are South African Krugerrands, Canadian Maple Leafs, and Mexican gold Onzas in quantities of 25 ounces (one 'contract') or more. Sales of these in contract quantities require a 1099B IRS information form, reporting the sale of a regulated commodity contract. There is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S. Mint strikes the gold Eagle bullion coins so I wouldn't trust selling their coins but everything else should be fair game.

Well, I think we can easily limit those specie to transactions of 24OzT or less

sounds like progress

[empoweoqwj]

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

That could work. Certain forms of gold which trade as commodity contracts fall under the Broker Reporting Act of 1982. Specifically named are South African Krugerrands, Canadian Maple Leafs, and Mexican gold Onzas in quantities of 25 ounces (one 'contract') or more. Sales of these in contract quantities require a 1099B IRS information form, reporting the sale of a regulated commodity contract. There is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S. Mint strikes the gold Eagle bullion coins so I wouldn't trust selling their coins but everything else should be fair game.

Well, I think we can easily limit those specie to transactions of 24OzT or less

sounds like progress

So we've gone from a cash-only exchange to a gold and silver for bitcoins exchange. Progress? Maybe ....

[jojo69]

I think so, at least as far as this thread goes...we have gone from "no wai, state will raep u" to having to drop by the coin store before going to the exchange

[empoweoqwj]

I think so, at least as far as this thread goes...we have gone from "no wai, state will raep u" to having to drop by the coin store before going to the exchange

But its still a physical shop, and all the costs that incur. Which you would have to pass onto customers. Still not sure why that is better than localbitcoins or similar?

[jojo69]

because it would be tied to an online exchange

an online exchange you could move value to anonymously

last time I tried localbitcoins I had to show my ID to deposit in the guy's account

[empoweoqwj]

because it would be tied to an online exchange

an online exchange you could move value to anonymously

last time I tried localbitcoins I had to show my ID to deposit in the guy's account

An online exchange based in the US, where people have used "cash" to fund their accounts, by going to a shop anonymously. Yeah, good luck with that taking off

[jojo69]

who says the website needs to be based in the US?

and we have taken the "cash" out of the equation

[User705]

AML & KYC are actually designed to combat cash transactions.  The reasons governments are applying such to exchanges is that bitcoin is more analogous to cash then bank accounts/checks.