Localbitcoins - Premium Rates (Fair/Unfair)

[Seanzqt]

Hello,

I have done a few trades in my time and one recent trade I did, let's face it, I did not pay too much attention to it. For what I was paying, I was realistically getting half of what I paid for - I paid $336 USD to get $170 USD back in the form of BTC.

This was ultimately my own fault for not even calculating costs, though, do you think it's really fair overall for users to take advantage of Localbitcoins % rates to make their own percentages for selling their coins?

The dealer I dealt with recently noted he made a loss on buying his coins and used Localbitcoins to cover his loss in the Bitcoins that he had purchased?

I've dealt in my own business before and we never passed our losses on to our consumers, I don't see it fair how they can apply this here and make high profits off these new rates they set themselves.

Again, I understand I made a wrong pre-judgement here of purchasing without paying attention to what I was buying, though do you see it fair or unfair that people can set such ridiculous rates?

[tinof]

Localbitcoin is usually a very competitive marketplace.

You should only buy from lowest price supplier.

Once a deal is agreed and finalized, it is no longer the seller fault.

[blumangroup]

The premium that is paid is the market rate. You are essentially paying for the ability to buy bitcoin right away without having to wait for the exchange. It should be clear to you how much of a markup you are paying prior to buying. If you think the premium is too high then you should should not buy bitcoin on LBC

[griffga]

Does anyone know the limitations of this within the us? I know there was a case in florida where some people were in trouble because of transferring large amounts via localbitcoins

[Divinespark]

The premium reflects to a large degree your own need for privacy
The mark-up you appear to have paid seems very high
In my experience, 3-5% over all-in is more typical

[Mieehayii]

You can choose to use or not use it.
Many other online exchanges, you can quickly buy bitcoins with a very low fee.

[abercrombie]

The premium that is paid is the market rate. You are essentially paying for the ability to buy bitcoin right away without having to wait for the exchange. It should be clear to you how much of a markup you are paying prior to buying. If you think the premium is too high then you should should not buy bitcoin on LBC

The premium reflects to a large degree your own need for privacy
The mark-up you appear to have paid seems very high
In my experience, 3-5% over all-in is more typical

Agreed, the premium you pay is for privacy & instant coins.

Exchanges like Bitstamp (Slovania) or BTC-e (Bulgaria) require invasive identification requirements to validate bank transfers.  Most non-Bitcoin folk would think you're out of your mind for sending wires to these countries.  

Coinbase can be invasive & you will wait 4 days processing for the coins.  

[ruggedman_dan]

Sellers can charge whatever they want. It is not a question of fair/unfair. That's just the free market at work.

If you want to buy at Bitstamp rate send money to Bitstamp. Chances are, after sending fees, it will be higher than Bitstamp rate.

[Nrcewker]

May be you can try Lakebtc https://www.lakebtc.com

[haploid23]

I understand I made a wrong pre-judgement here of purchasing without paying attention to what I was buying, though do you see it fair or unfair that people can set such ridiculous rates?

I don't understand how you "miscalculated", everything is already laid out for you before you make the trade. It shows how much fiat you're paying, how much btc you're getting, and the exact rate that you're paying at. The list of buyers to choose from is automatically sorted by the rate. How did you overlook this?



The premium you're paying on LBC is more than fair. First of all, sellers on there often gets their bank accounts closed (most likely banned) for dealing in btc. There are also plenty of scams on there that results in significant losses. All these risks are factored into the price. So that's the seller's point of view.

Now lets look at it from the buyer's side. As a buyer, you're able to get your btc within minutes. Try wiring money into an exchange and see how long it takes from the time you send the wire, to the time you get btc in your personal wallet.

As a buyer, in general you also get btc without leaving a paper trail, while the seller will have to deal with possibly proving to the IRS where all the fiat came from. You get your privacy during the transaction. The exception is if both buyer and seller meet face to face for the transaction.

Lastly, wiring money into an exchange is not free. It costs ~$50 for an international wire into the exchange, and I believe ~$150 to wire money out. It's only cost-effective if you wire large amounts of money into an exchange. On LBC, some people like the luxury of doing weekly small purchases of ~$80 worth of btc purchases, which is not possible with an exchange due to wire fees eating up the actual available funds to purchase the btc.

[Timetwister]

Hello,

I have done a few trades in my time and one recent trade I did, let's face it, I did not pay too much attention to it. For what I was paying, I was realistically getting half of what I paid for - I paid $336 USD to get $170 USD back in the form of BTC.

This was ultimately my own fault for not even calculating costs, though, do you think it's really fair overall for users to take advantage of Localbitcoins % rates to make their own percentages for selling their coins?

The dealer I dealt with recently noted he made a loss on buying his coins and used Localbitcoins to cover his loss in the Bitcoins that he had purchased?

I've dealt in my own business before and we never passed our losses on to our consumers, I don't see it fair how they can apply this here and make high profits off these new rates they set themselves.

Again, I understand I made a wrong pre-judgement here of purchasing without paying attention to what I was buying, though do you see it fair or unfair that people can set such ridiculous rates?

As long as it's a voluntary exchange, nothing's wrong with it. It sucks, but it was your fault.