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Author Topic: Encourage in person cash/btc trades  (Read 1233 times)
barbourwill
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May 22, 2012, 12:53:54 PM
 #1

Apologies if this has been already discussed to death...

The problem

Lets consider a newcomer wannabe-btc-consumer. They come across an awesome product/service which is sold in BTC only, so they think to themselves `great! let me get $20 worth of bitcoin so I can get me this hella-cool product`.

A quick google search for `getting bitcoin` soon leads to disappointment...

  • "You mean it is practically impossible to buy bitcoin with a credit card nor paypal?"
  • "You want me to go to my bank and wire over some money to some random bank account number I found on the internets??"
  • "Aah I can use Dwolla, brilliant .... oh no wait, I do not live in the US! damn."

Consumer is quickly put off and finds similar almost-as-cool product elsewhere and pays with paypal/cc card.

We need a frictionless way for consumers to get hold of small amounts of bitcoin so that they can buy products/services.

Since we know that paypal/cc cards are not gonna happen for this, lets make it easier to have cash based transactions by encouraging in person trades.

I see that btcnearme had a similar objective, but it does seem a little dead!
 
https://bitcointalk.org/index.php?topic=54522.0

Rough proposal

  • Create a centralised service with web front end
    • Allow consumer to find BTC traders in their region
    • Allows traders to advertise their services for particular region, along with their exchange rate etc
    • Trades are booked online, BTC goes into escrow
    • Trader and consumer perform cash transaction in meatspace, BTC is released by trader from escrow

    This would probably be enough for a simple service, but the consumer may want to get a `receipt` from the trader to prove the fact that the cash transaction took place...

  • Mobile application for performing real life offline cash transaction
    • Mobile app allows trader to create a digital receipt and give it to the buyer to show that cash received
    • Mobile app allows consumer to verify digital receipt is valid
  • Mobile application could also serve as wallet, using some existing open source code/online wallet service

    This digital receipt could be the key that allows the BTC in escrow to be released.

Today's consumers become traders of tomorrow

  • Easily allow people to set up shop as trader in their neighbourhood

Monetizing strategy

  • Take small percentage of transaction for escrow fee

Possible Safeguards

  • Centralised escrow service does not have private keys to do any btc transaction. Escrow is released by trader's key/receipt
  • Trades with small quantities of cash to mitigate risk of being robbed!
  • Reputation system for traders/consumers
  • Could offer some dispute resolution service, but then again we are just doing small transactions, reputation might be enough
  • Entering keys only happens using signed open source applications - e.g. applet on website, signed android app etc
    • To help mitigate against bad code getting private keys of users in the case of server compromise
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kangasbros
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May 22, 2012, 01:15:15 PM
 #2

Create a guide "how I became a millionaire by trading bitcoins to cash and backwards".

These cash exchange sites already exist, they just suck. When there isn't a good business model, you get crappy sites.

However one business could be: create optimal tools for running a cash exchange, and then sell the software to invidual cash exchangers.

alatus
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May 22, 2012, 01:16:12 PM
 #3

In my opinion this - or something similar - would be an essential service.
I have just checked the possibilities again (in Eastern Europe) to get BTC for fiat.
They are horroristicly time consuming and expensive.

There IS an opportunity here. (Sadly, I truly lack the expertise to solve the problem.)
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May 22, 2012, 01:17:46 PM
 #4

I would be willing to set up a cash exchange in Eastern Europe region if such service would become available!

Good Idea!
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May 22, 2012, 01:28:06 PM
 #5

I would be willing to set up a cash exchange in Eastern Europe region if such service would become available!

Good Idea!

There are couple of websites where you can advertise: https://en.bitcoin.it/wiki/Trade#Local.2FIn-Hand_Exchanges

It doesn't require that special setup.

barbourwill
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May 22, 2012, 01:57:45 PM
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I would be willing to set up a cash exchange in Eastern Europe region if such service would become available!

Good Idea!

There are couple of websites where you can advertise: https://en.bitcoin.it/wiki/Trade#Local.2FIn-Hand_Exchanges

It doesn't require that special setup.

Aaah tradebitcoin.com is pretty much the service I am after, it seems like there are fair few members as well, the other related sites on the wiki are all but dead.

However they dont make it simple to join - what is the `google apps domain` it wants? why cant I just put my username and password in!?
Stephen Gornick
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May 22, 2012, 07:40:24 PM
 #7

This is one of those things that isn't easily solvable, primarily because advertising that you do money exchange (even if not at a profit) means you probably should also be registered as a money service business. [Update: In most jurisdictions.]

Hawala Network - Orange County, CA / Las Vegas, NV / Laurel, MD
 - http://bitcointalk.org/index.php?topic=82502.0

I was reading about how those doing infrequent exchange (up to 5 times per year) below the AML threshholds ($1K per day) and not at a profit are excluded from this requirement.  I would like to find out specifically where in the regulations this exclusion is described.
 - http://mcgladrey.com/pdf/review_florida_bankers_aml_conference.pdf
kangasbros
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May 22, 2012, 08:26:42 PM
 #8

This is one of those things that isn't easily solvable, primarily because advertising that you do money exchange (even if not at a profit) means you probably should also be registered as a money service business.

Depends heavily in which country you reside. I suspect that in most african countries you could just do it, and nobody would care much (unless you started moving larger sums).

barbourwill
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May 22, 2012, 09:58:29 PM
 #9

This is one of those things that isn't easily solvable, primarily because advertising that you do money exchange (even if not at a profit) means you probably should also be registered as a money service business.

Guess it depends on whether bitcoin is officially classed as a currency, not sure it is yet ... buying and selling 20bucks worth of 1s and 0s here and there is probably fine!

Even if a state wanted to prevent/regulate such activity, I am not sure how they could do it
Vernon715
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May 25, 2012, 12:30:57 AM
 #10

sounds like a good idea

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