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Author Topic: Ebay-like websites with Bitcoin: Why haven't they taken off?  (Read 4583 times)
tvbcof
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January 14, 2012, 12:37:30 AM
 #21

I think fraud and abuse are big issues. I have never been scammed personally, but I have had bidders just decide to not pay. What then? My only recourse was to have him kicked out of the bidding site. Not much of a penalty.

I'm exclusively a buy-side user.

I have enough trouble getting my merchandise out of sellers even with chargebacks, especially lately for some reason.  A fair percentage of sellers will screw you even when they when chargebacks ensure that there is a minimal chance that they will end up with the buyer's coin.  Without them, I shudder to think of what the fraud rate would be.

If a seller will ship me the merchandise before I send them my BTC, I'm in.


That is why I like a tracking # based escrow.  They have to ship to get the coin.  A feedback system would give negative feedback to sellers who ship empty boxes or bad product. 

Combined a tracking/escrow/feedback solution with the ability for the buyer to destroy the BTC associated with a transaction if the shipment is unsatisfactory, and I'll think about playing.


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Littleshop
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January 14, 2012, 01:53:31 AM
 #22

I think fraud and abuse are big issues. I have never been scammed personally, but I have had bidders just decide to not pay. What then? My only recourse was to have him kicked out of the bidding site. Not much of a penalty.

I'm exclusively a buy-side user.

I have enough trouble getting my merchandise out of sellers even with chargebacks, especially lately for some reason.  A fair percentage of sellers will screw you even when they when chargebacks ensure that there is a minimal chance that they will end up with the buyer's coin.  Without them, I shudder to think of what the fraud rate would be.

If a seller will ship me the merchandise before I send them my BTC, I'm in.


That is why I like a tracking # based escrow.  They have to ship to get the coin.  A feedback system would give negative feedback to sellers who ship empty boxes or bad product. 

Combined a tracking/escrow/feedback solution with the ability for the buyer to destroy the BTC associated with a transaction if the shipment is unsatisfactory, and I'll think about playing.



Once you start things like that, buyers start to negotiate price after receipt of product.  Yes, the product is exactly as described but has a small scratch or other minor ailment that does not effect use for a used product.  Buyer then asks for half off or seller gets no BTC.  There is a whole bunch of game theory based on similar scenarios but now buyer ALREADY has product so they have nothing to loose.

When you have a GOOD feedback/rating system in place, the seller treasures their positive rating and will address most valid concerns so as not be loosing rating.   Add a system in where buyer can get a financial reward for complaining and the number of complains will rise dramatically.  This is also a headache for the customer service of the auctions site. 



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January 14, 2012, 02:13:22 AM
 #23

I think fraud and abuse are big issues. I have never been scammed personally, but I have had bidders just decide to not pay. What then? My only recourse was to have him kicked out of the bidding site. Not much of a penalty.

I'm exclusively a buy-side user.

I have enough trouble getting my merchandise out of sellers even with chargebacks, especially lately for some reason.  A fair percentage of sellers will screw you even when they when chargebacks ensure that there is a minimal chance that they will end up with the buyer's coin.  Without them, I shudder to think of what the fraud rate would be.

If a seller will ship me the merchandise before I send them my BTC, I'm in.


That is why I like a tracking # based escrow.  They have to ship to get the coin.  A feedback system would give negative feedback to sellers who ship empty boxes or bad product. 

Combined a tracking/escrow/feedback solution with the ability for the buyer to destroy the BTC associated with a transaction if the shipment is unsatisfactory, and I'll think about playing.



Once you start things like that, buyers start to negotiate price after receipt of product.  Yes, the product is exactly as described but has a small scratch or other minor ailment that does not effect use for a used product.  Buyer then asks for half off or seller gets no BTC.  There is a whole bunch of game theory based on similar scenarios but now buyer ALREADY has product so they have nothing to loose.

When you have a GOOD feedback/rating system in place, the seller treasures their positive rating and will address most valid concerns so as not be loosing rating.   Add a system in where buyer can get a financial reward for complaining and the number of complains will rise dramatically.  This is also a headache for the customer service of the auctions site. 


I disagree.  A seller would be leery about doing business with a buyer who had a history of causing issues, so a buyer would be reticent to cause needless grief.  If/when I am a seller, I'll specify that only buyers with a certain percentage are qualified to bid.

Also, I did say that the BTC would be destroyed.  e.g., sent to a black hole address in the event of a dispute.  Thus, the only way to game things would be for the buyer to release the funds and trust that the seller (who had just been a victim of buyer fraud) would send him back the 50% or whatever that the buyer just extorted.  Unlikely unless there was a good-faith agreement.

I would anticipate that in a vast majority of the times funds were black-holed, it would be clear that it was the seller's fault.


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January 14, 2012, 02:20:16 AM
 #24

I think fraud and abuse are big issues. I have never been scammed personally, but I have had bidders just decide to not pay. What then? My only recourse was to have him kicked out of the bidding site. Not much of a penalty.

I'm exclusively a buy-side user.

I have enough trouble getting my merchandise out of sellers even with chargebacks, especially lately for some reason.  A fair percentage of sellers will screw you even when they when chargebacks ensure that there is a minimal chance that they will end up with the buyer's coin.  Without them, I shudder to think of what the fraud rate would be.

If a seller will ship me the merchandise before I send them my BTC, I'm in.


That is why I like a tracking # based escrow.  They have to ship to get the coin.  A feedback system would give negative feedback to sellers who ship empty boxes or bad product. 

Combined a tracking/escrow/feedback solution with the ability for the buyer to destroy the BTC associated with a transaction if the shipment is unsatisfactory, and I'll think about playing.



Once you start things like that, buyers start to negotiate price after receipt of product.  Yes, the product is exactly as described but has a small scratch or other minor ailment that does not effect use for a used product.  Buyer then asks for half off or seller gets no BTC.  There is a whole bunch of game theory based on similar scenarios but now buyer ALREADY has product so they have nothing to loose.

When you have a GOOD feedback/rating system in place, the seller treasures their positive rating and will address most valid concerns so as not be loosing rating.   Add a system in where buyer can get a financial reward for complaining and the number of complains will rise dramatically.  This is also a headache for the customer service of the auctions site. 


I disagree.  A seller would be leery about doing business with a buyer who had a history of causing issues, so a buyer would be reticent to cause needless grief.  If/when I am a seller, I'll specify that only buyers with a certain percentage are qualified to bid.

Also, I did say that the BTC would be destroyed.  e.g., sent to a black hole address in the event of a dispute.  Thus, the only way to game things would be for the buyer to release the funds and trust that the seller (who had just been a victim of buyer fraud) would send him back the 50% or whatever that the buyer just extorted.  Unlikely unless there was a good-faith agreement.

I would anticipate that in a vast majority of the times funds were black-holed, it would be clear that it was the seller's fault.



Understood.  But under those rules I would not play.  Figuring out who is a bum buyer is just too tough.

tvbcof
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January 14, 2012, 02:23:43 AM
 #25


Understood.  But under those rules I would not play.  Figuring out who is a bum buyer is just too tough.

Fine.  It's a free market, but you'll be throwing away a lot of business.  You have both a history to look at (just as does a buyer), and a situation where there is very little reason for a buyer to screw you unless you totally fail to deliver.  Your call.


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January 14, 2012, 02:40:38 AM
 #26


Understood.  But under those rules I would not play.  Figuring out who is a bum buyer is just too tough.

Fine.  It's a free market, but you'll be throwing away a lot of business.  You have both a history to look at (just as does a buyer), and a situation where there is very little reason for a buyer to screw you unless you totally fail to deliver.  Your call.
I do not agree.  The buyer can be paid for screwing the seller, so there is a huge reason for the buyer to screw the seller in that case.   

tvbcof
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January 14, 2012, 02:46:02 AM
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Understood.  But under those rules I would not play.  Figuring out who is a bum buyer is just too tough.

Fine.  It's a free market, but you'll be throwing away a lot of business.  You have both a history to look at (just as does a buyer), and a situation where there is very little reason for a buyer to screw you unless you totally fail to deliver.  Your call.
I do not agree.  The buyer can be paid for screwing the seller, so there is a huge reason for the buyer to screw the seller in that case.   

How?  The only way you suggested is that the buyer extorts the seller into cutting the price.  But then it is in the hands of the seller to pay the extortion money out of the goodness of his heart.  That might happen for penny-ante little shit where the value of a positive rating is a noticable fraction of things, but for big ticket items it seems pretty unlikely.


DeathAndTaxes
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January 14, 2012, 03:17:39 AM
 #28

posted by DeathAndTaxes:
Quote
A company with deep enough pockets can subsidize the venture.    ...  It can be done but it takes some real capital. 

Even capital and market clout didn't help Overstock.com or Amazon.com ... it's a much harder market to tap than people realise.   


Frank

Amazon is making inroads in fixed price listings.  Allowing third parties to use amazon shipping and thus be able to offer "prime shipping" is starting to pay off.  Amazon third party sales continue to grow.

Still you are right.  I mean there is a reason this dynamic is called "the ebay effect".  Alt-coins suffer from the ebay effect due to Bitcoins larger size and first mover status.  There likely will never be much demand for them unless they carve out a niche (which none other than namecoin have tried). 
Matthew N. Wright
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January 14, 2012, 03:29:59 AM
 #29

This seems to be a prime use for Bitcoin: A place for online auctions but without the Ebay restrictions and fees. A few have been made, like Biddingpond, bitbid, and a few others I can't remember, but none of them seem to have more than a small handful of auctions at any time.

What is missing from these websites that would make them take off?

Two reasons. Volume and userbase.


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January 14, 2012, 04:00:30 AM
 #30

On bitmit.net/ you already have $$ and BTC. I noticed the problem of rising BTC only after launching some 30d auctions. Bitmit seems to have some bug where the highest bit doesn't update depending on the exchange rate, which is bizarre anyway. Imagine one offers 6$ the other 1BTC for an item that was at 1$ before. First the $-bidder would get it for 1.05$ The BTC bidder would get it for 1BTC (worth 6.05$) but then rate drops and the $-dude is back in business? Will all auctions be updated with each trade at gox? I mean on the one hand I like the idea of a multi-currency auction platform (please add EUR and IRR) but on the other I'm not sure if this is fun to maintain on the long run.

Anyway, I like bitmit. I like the escrow feature. I hope they tackle those fraud issues besides from the bugs this young and promising site still has.

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January 14, 2012, 10:23:58 AM
 #31

The issue here is fairly simple. It's business 101. Payment method is only one part of the package, even if a Bitcoin auction site has the most convenient and cheap payment method with the lowest fees, it's not everything. That site is still competing with eBay and other major sites in every other aspect as well.

It's not enough that I, as a Bitcoin-enthusiast, want to use Bitcoin. There needs to be actual goods there that I really need and thus want to buy. eBay and the equivalent over here in Finland simply have exponentially larger supply of goods and users willing to bid on my goods. The convenience that comes from this overrides the advantages of Bitcoin.

Not that I use auction sites a lot anyway, but this issue is universal with all Bitcoin merchant startups. I don't expect "bitmit" to ever become anything other than a niche site, because it isn't offering enough to attract even most of the Bitcoin community, let alone anyone else.

I've said this before, but I think that the key is finding convenient ways to buy with bitcoins at already established major sites. Either directly when they add Bitcoin as a payment option or through a site such as spendbitcoins.com. New BTC startups could work out though, but there has to be some other significant benefits from using that site other than accepting Bitcoin. A good example is Casascius, who is selling unique Bitcoin-products and doing quite well I think.

A Bitcoin merchant startup is ahead of its time right now if it is dreaming of becoming anything other than a small site. But in the years to come, this could obviously change. Bitcoin could become significant enough that it in itself becomes a big deal from a marketing perspective.

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January 15, 2012, 05:22:42 AM
 #32

Bitmit.net is geared up to fill this role...

Here is my referring link, http://bitmit.net/en/?ref=1310

I love this site, check out my xbox games and related auctions.  I sold a video card and a game so far, the site works great.  Please support me by using the referring link  Smiley

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January 15, 2012, 11:37:21 PM
 #33

I used to work for ebay way back in the day. The model is totally outdated somebody needs to think outside ebay's monopoly and build a unique site.

Since bitcoin price fluctuates every few seconds you can't list everything in BTC, it has to be in a currency that when you go to checkout generates the current price of BTC and asks you to transfer that. Then people can list any currency they want.

Since paypal is basically it's own escrow system buyers on ebay trust that they won't get scammed, since they can easily get their funds back should they receive something they didn't order so said auction site would have to use escrow but fuck me I would *not* want to be the unlucky admin in charge of such a site. You can' t imagine the endless legal threats and scams you would have to battle. There's nothing stopping me from ordering a digital camera off a bitcoin auction site, then claiming I received something else in the mail with zero way to prove it. This kind of scam runs rampant on ebay, same with feedback scamming/threats, sellers making syndicates to wipe out new competition by fraudulently ordering the new guy's items and making all sorts of claims to shut their account down...

What would work is a live auction but you'd need establish buyers to make it worthwhile. Ritchie Brothers Auction is a good site to learn how to do an auction, ignore ebay.

Such a site would certainly have to be hosted outside the US, outside their domain yanking control as well. A bulletproof host in China or something so if some guy starts selling fake/stolen louis vuitton bags you don't end up arrested for running the site
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January 15, 2012, 11:40:38 PM
 #34

In an effort to promote our auction site we are currently running a promotion where users can earn up to 10 free bitcoins:

**Top Seller**
Whoever auctions off the most products on MokiMarket by January 31, 2012 at midnight will receive 5 bitcoins. Posting auctions is free and can be physical or virtual goods. Must mark all won items as shipped by deadline and maintain a positive feedback rating.

**Top Bidder**
Whoever wins the most products on MokiMarket by January 31, 2012 at midnight will receive 5 bitcoins. All items must be paid for by deadline.

Our site has a feedback rating system to weed out reputable sellers, we have been around for almost 4 months with very minor issues. Check us out.

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January 15, 2012, 11:48:57 PM
 #35

In an effort to promote our auction site we are currently running a promotion where users can earn up to 10 free bitcoins:

**Top Seller**
Whoever auctions off the most products on MokiMarket by January 31, 2012 at midnight will receive 5 bitcoins. Posting auctions is free and can be physical or virtual goods. Must mark all won items as shipped by deadline and maintain a positive feedback rating.

**Top Bidder**
Whoever wins the most products on MokiMarket by January 31, 2012 at midnight will receive 5 bitcoins. All items must be paid for by deadline.

Our site has a feedback rating system to weed out reputable sellers, we have been around for almost 4 months with very minor issues. Check us out.


I like this site but the feedback model is completely outdated and risky to yourself. What if I leave negative feedback and claim the guy scammed me. Ebay had to get rid of 'negative feedback' because of legal threats. The seller can launch legal action against you with a few lawyer forms from some fly by night Florida internet lawyer and sue you for defamation of character for the negative feedback.

This is what I mean by a whole new model needs to be though up. Right now your site is doing fine but if you get larger and start getting bigger sellers they will do whatever they can to scam their bad feedback away through lawyers. Just my $0.02
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January 16, 2012, 12:20:01 AM
 #36

In an effort to promote our auction site we are currently running a promotion where users can earn up to 10 free bitcoins:

**Top Seller**
Whoever auctions off the most products on MokiMarket by January 31, 2012 at midnight will receive 5 bitcoins. Posting auctions is free and can be physical or virtual goods. Must mark all won items as shipped by deadline and maintain a positive feedback rating.

**Top Bidder**
Whoever wins the most products on MokiMarket by January 31, 2012 at midnight will receive 5 bitcoins. All items must be paid for by deadline.

Our site has a feedback rating system to weed out reputable sellers, we have been around for almost 4 months with very minor issues. Check us out.


I like this site but the feedback model is completely outdated and risky to yourself. What if I leave negative feedback and claim the guy scammed me. Ebay had to get rid of 'negative feedback' because of legal threats. The seller can launch legal action against you with a few lawyer forms from some fly by night Florida internet lawyer and sue you for defamation of character for the negative feedback.

This is what I mean by a whole new model needs to be though up. Right now your site is doing fine but if you get larger and start getting bigger sellers they will do whatever they can to scam their bad feedback away through lawyers. Just my $0.02
I see your points but what are the alternatives? There needs to be some mechanism for buyers to rate sellers.

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January 16, 2012, 12:52:48 AM
 #37

Or someone should create a system that piggybacks onto ebay, but allows people to transact in bitcoins.

Done (just pay using paypal through spendbitcoins.com). Smiley

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January 16, 2012, 03:30:45 PM
 #38

Price!

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January 16, 2012, 06:00:00 PM
 #39

we need a meta site that searches many auction sites including ebay to break the monopoly(ebay) and associated monoplolies(paypal)
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January 16, 2012, 07:12:17 PM
 #40

Ebay is a natural monopoly. As a seller, I'd prefer to list on eBay, even with 10-15% fees, than list elsewhere regardless of the fee (ie, even if the fees were 0 elsewhere). Just one more bid on my item could easily be worth an extra 15%....it's a no-brainer; I'm going where the volume is.

As someone said earlier in this thread, the only way to effectively breech that effect is with LOTS of capital. You have to drop the fees into negative territory for sellers on competitor auction sites; ie, actually *pay* sellers to list. But that's freakin' expensive. Very unlikely that an individual will risk millions on such a venture, and obviously you'd get laughed out of a VC meeting with such a model.

The meta-site idea seems potentially viable from a high-level, though you have:
1) Many annoying logistical issues to solve
2) You've introduced an additional layer of friction (ie, fees) into the system. So people could still transact cheaper directly on eBay.


Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
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