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Author Topic: Selling BTC via mail?  (Read 660 times)
KGB_Bunny
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June 02, 2012, 04:19:53 AM
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After reading about the recent change to Dwolla's TOS I'm a bit nervous about using them to transfer my BTC into USD. I was trying to think of other ways to sell BTC for cash and was wondering if someone would be so kind to explain what risks would be assassinated with selling them for cash or check via mail.
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Stephen Gornick
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June 02, 2012, 05:11:40 AM
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If you don't have a problem with giving Dwolla your ID, then withdrawing to Dwolla is pretty much free of any risk.   The problem is that the leading exchange, Mt. Gox, is having severe problems meeting the demand for Dwolla withdrawals so that method will take six days (per their last statement on it) before they send the funds to your Dwolla account.

There are a couple other exchanges that do Dwolla, Intersango and CampBX being two of them.  The problem with selling BTCs at these exchanges is that the exchange rate is lower (as there  are more BTC funds heading to those exchanges than there are USDs).  Arbitrage would normally bring these exchanges closer together but getting funds into Dwolla takes some amount of time and a couple percent gain on the transaction is just marginally enough for the arbitrageurs.

But if you are comparing the final proceeds of a trade at an exchange that trades 5% below spot but you can withdraw to Dwolla versus the final proceeds for those same BTCs after requesting cash in the mail, the amount you end up with, in-hand when all is said and done, is probably going to be about the same amount and will take about the same amount of time.

CampBX and BitFloor are two exchanges that will send funds as ACH direct deposit.   CampBX and Get-Bitcoin will both send out a check.  All these are U.S. companies. 

Withdrawing for cash in the mail now, that could be risky because should the envelope never make it you have no recourse, unless the seller offers some type of protection.  Here's one seller that offers this BTC to cash (via mail) service:
 - http://bitcointalk.org/index.php?topic=82983.0

Here's a guide with the various options:
 - http://en.bitcoin.it/wiki/Selling_bitcoins

KGB_Bunny
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June 02, 2012, 11:42:24 AM
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Thanks for the reply. For some reason I was under the impression that the TOS change with Dwolla disallowed users from using as a method to exchange digital currency or something to that extent. Is that not the case?

As for the fees and wait time, they are a bit of a annoyance but nothing I can't deal with. The whole reason I got into bit coin was a way to sell my Team Fortress 2 items with out having to worry that one month or so down the line someone is going to dispute the charge for the payment they made to me. If I am wrong about the implications of the TOS with Dwolla than that seems like a suitable method to use.
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June 03, 2012, 07:09:34 AM
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Thanks for the reply. For some reason I was under the impression that the TOS change with Dwolla disallowed users from using as a method to exchange digital currency or something to that extent. Is that not the case?

Ya, if taken literally their terms would prohibit use that way, without prior approval  From another thread:

You understand and agree that you will not engage in the following activities:
- Use the Dwolla system to operate or engage in any business regulated by FinCen, including the money service business;
- Use the Dwolla System without written consent in association with any online credit or virtual currency system;

But there haven't been any reports of anyone having their Dwolla funds frozen (yet) as a result.  That's not really Dwolla's style, IMO, and they'ld probably give a reminder first if your volume got large enough that you'ld need to request approval for doing conversions to or from Bitcoin.  The exchanges that do allow Dwolla deposits and withdrawals are, presumably, working with Dwolla's permission.

So it appears there's no need to worry about using Dwolla as the cash out method from a Bitcoin exchange, at least not the well-known ones, like Mt. Gox, Intersango, Camp BX, Get-Bitcoin, etc.

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