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Author Topic: Encouraging vendors to accept Bitcoin  (Read 1652 times)
mndrix
Michael Hendricks
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May 06, 2011, 10:28:43 PM
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This is the approach I used with JJGames.  Since many people in the forum are software developers, I thought it would be worth sharing.  Maybe some other vendors can be encouraged in this way.

I am a contract software developer by trade.  I've had a contract with JJGames for most of the last decade.  Under the terms of our contract, they pay me each month for work that I've done in the preceding month.  I asked JJGames if they would be willing to accept Bitcoin as a payment method on their site.  I would do all necessary software development for free.  For orders paid with Bitcoin, I would give them credit on their next bill for the full US Dollar amount of the order and, in turn, take all the Bitcoins.  If the credits exceeded their bill amount, I would pay them the difference in US Dollars.

JJGames loved the idea of Bitcoin and under these terms was more than willing to accept it as payment on their site.  They carry no exchange rate volatility risk and they incurred no development costs for adding the new payment method.

All that's needed to make this work is an existing development contract with an online retailer.  Hopefully some of you have contracts that can be leveraged to create new Bitcoin-accepting sites.
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May 07, 2011, 02:50:44 AM
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This is brilliant! Fascinating approach to interleaving the two economies, too (crediting an already existing contractual obligation).

BTW, how is it that they "carry no exchange rate volatility risk"?  If they were paid in bitcoin at, say, $10 per BTC, and then bitcoin plunges in value the next month, won't they have lost money in that their revenue now does no longer buys as much of your work?
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May 07, 2011, 04:02:04 AM
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This is the approach I used with JJGames.  Since many people in the forum are software developers, I thought it would be worth sharing.  Maybe some other vendors can be encouraged in this way.

I am a contract software developer by trade.  I've had a contract with JJGames for most of the last decade.  Under the terms of our contract, they pay me each month for work that I've done in the preceding month.  I asked JJGames if they would be willing to accept Bitcoin as a payment method on their site.  I would do all necessary software development for free.  For orders paid with Bitcoin, I would give them credit on their next bill for the full US Dollar amount of the order and, in turn, take all the Bitcoins.  If the credits exceeded their bill amount, I would pay them the difference in US Dollars.

JJGames loved the idea of Bitcoin and under these terms was more than willing to accept it as payment on their site.  They carry no exchange rate volatility risk and they incurred no development costs for adding the new payment method.

All that's needed to make this work is an existing development contract with an online retailer.  Hopefully some of you have contracts that can be leveraged to create new Bitcoin-accepting sites.

You can also tell them that I'll be placing an order with them soon only because they are accepting BTC. Otherwise, I probably would go with Half.com, Amazon or some other megacorp.
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May 07, 2011, 04:29:17 AM
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BTW, how is it that they "carry no exchange rate volatility risk"?  If they were paid in bitcoin at, say, $10 per BTC, and then bitcoin plunges in value the next month, won't they have lost money in that their revenue now does no longer buys as much of your work?

From what it sounds like, the retailer will accept Bitcoins (the price presumably changing with the exchange rate), and then exchange them with mndrix for the same rate. That way they get the same dollar amount no matter what the exchange rate is.

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https://bitcointalk.org/index.php?topic=88927.0
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