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Author Topic: Can someone explain simply how much it costs to sell bitcoins on mtgox?  (Read 1285 times)
Riley
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April 29, 2011, 03:39:34 PM
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I see that mtgox takes a 0.65% fee for all trades.  But, I also see that I can only get my dollars out via LibertyReserve, which seems to have its own charges.  Are there signup fees in any of these places?

If I load 100 bitcoins into my account at mtgox, sold them all at $1.00, and went through all the steps to get cash dollars in my hand, how many dollars would I have?
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April 29, 2011, 04:00:59 PM
 #2

I see that mtgox takes a 0.65% fee for all trades.  But, I also see that I can only get my dollars out via LibertyReserve, which seems to have its own charges.  Are there signup fees in any of these places?

If I load 100 bitcoins into my account at mtgox, sold them all at $1.00, and went through all the steps to get cash dollars in my hand, how many dollars would I have?

At the moment about $250  Smiley
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April 29, 2011, 04:16:52 PM
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At the moment about $250  Smiley
He says the highest and only bid is at $1.00 USD so he would get 100*1.00/1.0065(MtGox fee)/1.01(LR fee for transaction; send only)/1.01(Exchanger fee for PP) and anything your bank might charge you to get them out. So in total: 96-97 USD.

Riley
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April 29, 2011, 04:57:03 PM
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Wow. I understand that the transaction fees for btc-btc trades is very low, but with the transaction fee for btc-usd at 3.5% (I'm trusting your numbers)... that's more than I lose to Visa when I use a credit card for dollars.

I run a business currently accepting BTC, and I was thinking of offering a discount for BTC because there's no transaction fee (I pay about 3% to Visa, otoh), but until I can actually SPEND my bitcoins I don't think such a discount is really viable.

Of course, if BTC continues to double every other day, I can provide a discount... but who's going to spend bitcoins when their value doubles every day?
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April 29, 2011, 05:01:27 PM
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but who's going to spend bitcoins when their value doubles every day?

Miners, who have to pay their electricity bills Wink
Stephen Gornick
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April 29, 2011, 05:01:38 PM
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If I load 100 bitcoins into my account at mtgox, sold them all at $1.00, and went through all the steps to get cash dollars in my hand, how many dollars would I have?

After trading your 100 bitcoins at $1.00 (which, is about 60% below market value, by the way), the result would $99.35 added to your "USD" balance in your Mt. Gox account.

If you then wish to withdraw those USDs, there are a number of ways to do so.

Bitcoin is a global currency, however it is still a young project.  Going the route using Liberty Reserve is for when it is not easy to convert bitcoins to a currency of your choice.  For small amounts (such as this $99.35 amount) the fees in doing so are high.  Consider Liberty Reserve as the "intermediary of last resort".  There are alternatives to using Liberty Reserve that might be better.

The options are described in the wiki: http://en.bitcoin.it/wiki/MtGox#Withdrawing_Funds

Here are options using your example of 100 BTC sold at $1.00:

Directly from Mt. Gox you have three options: http://www.mtgox.com/users/withdraw

1.) If you bank in the U.S., there is the ability to withdraw those funds as an ACH (without any fee even), however the minimum for that withdrawal is $800.

2.) If your bank is in the SEPA zone (Europe) then can withdraw your funds as EUR.  Your $99.35 USD is converted to EUR less a 2% fee (minimum fee is 0.35€).  

3.) Withdraw as Liberty Reserve.  You will lose about 2% by the time the funds are in your Liberty Reserve account.  From there, there are many many options.  There are exchangers who will convert Liberty Reserve to almost any currency in the world.  The fees are high, but it can be done.   Here's are two such exchanges: Nanaimo Gold http://en.bitcoin.it/wiki/Nanaimo_Gold (They'll even send Western Union and Moneygram funded using Bitcoins directly or using Liberty Reserve).  A second example is AurumXchange http://en.bitcoin.it/wiki/AurumXchange_Company

There is another method however.  Your funds in Mt. Gox are in demand by others.

On the #bitcoin-otc marketplace, there is no shortage of willing and able buyers who want your Mt. Gox funds (referred to as "MTGUSD", for Mt. Gox USD).  http://bitcoin-otc.com/vieworderbook.php?sortby=buysell&eitherthing=MTGUSD  

The fees vary per-offer, but using your $99.35 example, here's a typical trade for that:
  A trader offers to buy using PayPal at 0.99 (meaning a 1% fee).   So after transferring your Mt. Gox funds to that trader, you would receive in your PayPal account $98.35 USD.

Of course, because PayPal transactions can be reversed at a later time, you should only trade with parties you trust.  To help determine which parties can be trusted, you might use the #bitcoin-OTC's web of trust system: http://bitcoin-otc.com/trust.php

Incidentally, Dwolla is a "cash" transaction network (funds added and withdraw are ACH transactions) so as a result Dwolla has no exposure to credit card chargebacks.

Your example specifically addressed selling bitcoins on Mt. Gox and then withdrawing those funds.  There are other alternatives as well.

You might find someone willing to trade with you, for cash, locally:
  Bitcoin.local: http://www.TradeBitcoin.com
  Look for a green dot (exchange) on The Bitcoin Map collaborative project: http://www.BitcoinMap.com (or add a "Red" marker for yourself)

And, of course, perhaps your bitcoins would buy a product or service that you want:
  http://en.bitcoin.it/wiki/Trade

tl;dr: To sell a small number of bitcoins, just use CoinCard: http://coincard.ndrix.com  You'ld get about $98.75 USD in your PayPal for those 100 BTC (if the market rate were still $1.00) and it takes just minutes.

Riley
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April 29, 2011, 05:04:37 PM
 #7

Wow, thanks sgornick! I forgot that mtgox would do transfers for free for over $800, and I didn't know about a lot of those other resources.

Seems like bitcoins are... for real!
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April 29, 2011, 05:13:10 PM
 #8

Of course, if BTC continues to double every other day, I can provide a discount... but who's going to spend bitcoins when their value doubles every day?

I have never regretted making spends of BTC for goods and services even though I know had I not done so, they'd have gone up in value.

If I was that concerned, I could and should have replaced them with new ones from MtGox since I had the opportunity to do so.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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