Bitcoin Forum
December 07, 2016, 06:43:21 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: Why are banking services used for bitcoin trading?  (Read 1601 times)
rplg
Newbie
*
Offline Offline

Activity: 14


View Profile
November 01, 2011, 05:22:07 PM
 #1

Back in June, after a bunch of hashed passwords got leaked from mtgox I thought it would mean the end of using banking service based bitcoin trading. It does not even make sense to transfer funds from a bank account to an exchange, as you obviously ruin the anonymity part of bitcoin. You also have to rely on the exchange, for not disappearing with your funds.

Yet, several months later, it is still the most used method of purchasing bitcoins. Even after several exchanges have had their bank accounts frozed, people still keep using this system. There are some services like tradebitcoin.com which should make it easier to establish contacts (even though in a city of over a million, in a country which there are thousands of bitcoin users, I still cant see anyone with an ad up...).

Its kind of difficult to get ripped off doing a face to face exchange of BTC to cash, at least for amounts less than say $500. You meet up with the person in a public cafe which has wifi. One of you puts some cash on the table and their btc address, the other makes the transfer. As soon as we see one confirmation, the cash moves to the other side of the table. Not only this, but you get to meet another bitcoiner and perhaps have a cup of coffee with them.

Why isnt this widely used?
1481136201
Hero Member
*
Offline Offline

Posts: 1481136201

View Profile Personal Message (Offline)

Ignore
1481136201
Reply with quote  #2

1481136201
Report to moderator
1481136201
Hero Member
*
Offline Offline

Posts: 1481136201

View Profile Personal Message (Offline)

Ignore
1481136201
Reply with quote  #2

1481136201
Report to moderator
1481136201
Hero Member
*
Offline Offline

Posts: 1481136201

View Profile Personal Message (Offline)

Ignore
1481136201
Reply with quote  #2

1481136201
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
genjix
Legendary
*
Offline Offline

Activity: 1232


View Profile
November 01, 2011, 06:18:51 PM
 #2

Because if you transfer cold hard cash as a business in any significant volume you will get arrested for money laundering. Even if you check documents and ID, but end up with bad money, you will go to prison. I strongly recommend against those services unless they are highly regulated and following KYC laws.

Not because I support high levels of regulation, but to protect people from going to jail needlessly.
deepceleron
Legendary
*
Offline Offline

Activity: 1470



View Profile WWW
November 01, 2011, 06:35:19 PM
 #3

People have money in banks. They want Bitcoins instead. They have to get their money out of the bank. Most users still would use online exchanges, which are distant to them. So they use bank transfer methods available on the exchange to transfer the money. Now they can convert their holdings into Bitcoins (which can be quickly transferred to your Bitcoin wallet), and finally be free of the old fashioned banks and nation-state controlled currencies. Hooray!



rplg
Newbie
*
Offline Offline

Activity: 14


View Profile
November 01, 2011, 06:39:16 PM
 #4

Because if you transfer cold hard cash as a business in any significant volume you will get arrested for money laundering. Even if you check documents and ID, but end up with bad money, you will go to prison. I strongly recommend against those services unless they are highly regulated and following KYC laws.

Not because I support high levels of regulation, but to protect people from going to jail needlessly.
"those services" is it really a service? are you confusing this with running a cash to bitcoin exchange? Will I go to prison if I exchange bitcoins to my local currency if I do not check IDs and check if it is what you call "bad money"?
rplg
Newbie
*
Offline Offline

Activity: 14


View Profile
November 01, 2011, 06:40:02 PM
 #5

People have money in banks. They want Bitcoins instead. They have to get their money out of the bank. Most users still would use online exchanges, which are distant to them. So they use bank transfer methods available on the exchange to transfer the money. Now they can convert their holdings into Bitcoins (which can be quickly transferred to your Bitcoin wallet), and finally be free of the old fashioned banks and nation-state controlled currencies. Hooray!
http://geekman.com/images/snoopyhappydance_anim.gif


no, now they have linked their bitcoin address to their bank account.
speeder
Hero Member
*****
Offline Offline

Activity: 546



View Profile
November 01, 2011, 06:42:10 PM
 #6

People have money in banks. They want Bitcoins instead. They have to get their money out of the bank. Most users still would use online exchanges, which are distant to them. So they use bank transfer methods available on the exchange to transfer the money. Now they can convert their holdings into Bitcoins (which can be quickly transferred to your Bitcoin wallet), and finally be free of the old fashioned banks and nation-state controlled currencies. Hooray!



no, now they have linked their bitcoin address to their bank account.

So what?


Also, what about those that use online wallets? Or those that use brokers? (for example, I know some people that own bitcoin but paid someone else to keep them)

DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 01, 2011, 07:42:23 PM
 #7

Because many of us have families and jobs working 50+ hours a week.  I don't got time to track down some stranger and arrange a meet to exchange cash for coins.

Now if there were Bitcoin ATM (which have their own usage density problems) where I could exchange between USD and BTC I would use those but given they don't exist the exchanges work.
rplg
Newbie
*
Offline Offline

Activity: 14


View Profile
November 01, 2011, 10:14:30 PM
 #8

Because many of us have families and jobs working 50+ hours a week.  I don't got time to track down some stranger and arrange a meet to exchange cash for coins.

Now if there were Bitcoin ATM (which have their own usage density problems) where I could exchange between USD and BTC I would use those but given they don't exist the exchanges work.
I guess I have to capitulate to this argument then, because my family and my 50+ hours a week job will eventually catch up to me trying to refute it.
rplg
Newbie
*
Offline Offline

Activity: 14


View Profile
November 01, 2011, 10:56:29 PM
 #9

a post to clear things up. I did not make the thread intending to attack anyone, such as owners of exchanges. I just wanted to spark some discussion on how to get rid of what I find is a bottleneck to many things in life.

in effect, what I am proposing is to fire your bank, and use that cash to buy bitcoins yourself instead of pay someone to hold it and transfer it to complete the btc/cash exchange.

I feel this post is needed to clear things up. I certainly did not start this thread with the intent of offending anyone or making enemies.
speeder
Hero Member
*****
Offline Offline

Activity: 546



View Profile
November 11, 2011, 10:48:31 AM
 #10

a post to clear things up. I did not make the thread intending to attack anyone, such as owners of exchanges. I just wanted to spark some discussion on how to get rid of what I find is a bottleneck to many things in life.

in effect, what I am proposing is to fire your bank, and use that cash to buy bitcoins yourself instead of pay someone to hold it and transfer it to complete the btc/cash exchange.

I feel this post is needed to clear things up. I certainly did not start this thread with the intent of offending anyone or making enemies.

How you do that?

If you point me a way that I can do that, I would be very happy.

DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 11, 2011, 01:39:20 PM
 #11

in effect, what I am proposing is to fire your bank, and use that cash to buy bitcoins yourself instead of pay someone to hold it and transfer it to complete the btc/cash exchange.

My employer won't pay me in cash.  I have no problem with my bank.  It is USAA. 
It has no shareholders and all profits are returned to members so there isn't any incentive to fuck over depositors or borrowers.

Lastly the price of Bitcoin is related to utility and if the only way into the economy is to go meet a complete stranger with a bag of cash the utility of Bitcoin suffers and thus so does it's price.  Honestly my life is busy and complicated enough to start tilting at exchange windmills.

Just wondering do you also keep all your retirement assets in a safe in your home because you fire your broker?
Do you expect all forex traders to just keep big bags of cash they hand back and forth with other traders holding bags of cash in their respective currencies?

Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!