Topic: [ANN] Ghetto P&P -- Cheap Alternative to BitInstant for BDK Users (Read 3484 times)

This service is currently suspended due to extreme volatility and large shifts in the market outside the exchange rate. I currently do not know when services will resume. Apologies for any inconveniences, and thanks for business so far. Cheers,
Ben

They sent me a notice that they auto-enrolled me in overdraft coverage (which I thought was illegal) before even sending me an account number. 

Will hopefully have account info tomorrow. If not, and I still don't get a letter on Monday, I'll go to a physical branch.

PNC account opened. I should have all info needed within a few days. ING account is next on the list, and should be opened in a month or so.

Cheers,
Ben

Again ready for buys and sales. There is a temporary limit of 500BTC/day for ALL users which will be lifted within a couple weeks. Apologies for the downtime. Fixed ACH fee structure. If I messed anything else up, please let me know. 

I have not yet signed up for the PNC bank account, but house sale is scheduled for execution on the 30th, so I should have funds fairly soon to open up the "premium" account for free wires.

I currently intend to open an account at PNC within a couple weeks, and ING within a month. If you're interested in this service and meet the requirements (or wouldn't mind paying the non-depositor "sign-up" fee), let me know which bank you'd like me to open an account with (unless it's BofA -- they're evil. If you happen to live near me, I also refuse to deal with CNB).

BDK CDs will soon (within a month) be sold again (4%/32D, 9%/63D) if you'd prefer to "get paid" to open an account instead of paying a sign-up fee. P&P accounts may be "given" to BitInstant within a year or so if I start running low on time or something secret (on their side, not mine) happens. I will be subsidizing current account-holders' (who have used the service) transaction fees there if that were to happen, so it at least matches current "P&P" rates, but you'd also get the consistency and reliability (with regards to having staff) of BitInstant, among some other benefits I'll refrain from listing here.  I haven't talked to Charlie about this.


Cheers,
Ben

Will be ready for sales again either tomorrow or Wednesday (had a mess of accounts compromised, and need to wait for hardware to get here to better protect myself).

Cheers,
Ben

Incidentally, now that Dwolla has FiSync, you might find it useful to bug your credit unions to add FiSync support.  That way you can get same-day transfer of funds from your bank to Dwolla (and vice-versa).   Veridian credit union (which was an early investor in Dwolla) was the first to add FiSync.

Damn, now I'm sub'd and going to have to read this properly.

That's a clever and workable solution. Paypal does this as well to verify bank accounts, last I knew. They deposit $.83 in an account, and you tell them how much was deposited. Thanks.

TrustCash (and the services that use them, like BitInstant, AurumXChange, etc.) solve that by using the deposit amount as a unique ID.  So if I am buying $100 worth of bitcoins I might be asked to deposit exactly $100.41, where the .41 identifies whose order it was.

Had a successful $300 trial yesterday. Someone bought by depositing in my account through a shared branch. After I finally figured out the exact listed name of my CU and texted it to him, it took less than five minutes from him depositing, to that deposit showing up in my account, to having Bitcoins transferred to his wallet.

This "solution" can't scale, however. But - that was a good proof that this can work, at least with just a few people per month. All he needed was the state my CU is based in, the exact listed name, my account number, and his ID. Unfortunately (or fortunately for someone adamant about privacy), the person's name is not recorded in the transaction, so these need to be timely in execution, or I need the address from which a buyer is depositing. I don't think this would be a problem if transferring using PNC, but that hasn't been tested, yet (and isn't set up, yet).

I'm intending this solution to be part of a larger package of depositor services, to encourage folks' tolerance of lower interest rates. Typical US banks' overhead for rendered services costs them around 2-3.5% of total deposit volume annually, while they pay no significant amount of interest. Bitcoin lenders are in a unique position where spending 10% of deposit volume annually on user services is a drop in the bucket compared to the 80%+ non-PPT lenders pay annually for deposits, factoring in compounding.

If you are using a personal account at the credit union and accepting cash deposits from CU Service Center locations from around the country, you'll probably be getting a phone call from the bank manager soon enough.

Incidentally, when I deposit cash at a CU Service Center location (other than at my own credit union), I have always had to show my ID.  I've always only deposited to my own account so I don't know what they would have done if the account had a different name on it than mine.

Can you please take video of the first literal pineapple, starfish, or koala bear that shows up to do an in-person deal with you?  I'd really like to see that! 

Seriously though, another great idea Kluge, keep up the good work!

Dude, this is awesome.

Let me know if you need any help 

-Charlie

Well, if DBA allows you to deduct business expenses you're covered I guess. I was and am under the impression that running as DBA individual can not deduct expenses such as gas, telephone, buying/leasing a truck, etc. as in your example with a guy plowing driveways for tips.

It would be real PITA if at the end of year you would need to pay taxes on everything that went through your accounts especially if you manage to produce good volume instead of actual profits that you end up making for yourself with it.

Naw, I claim myself and related business as a sole proprietorship, so I get standard LLC deductions (business expenses) by individually filing my Schedule C form. I comply with DBA requirements (at least in spirit -- I am supposed to file with a county clerk basically just saying I am operating as "BDK" or whatever, but I'll wait until I move) by giving my name out publicly where I do business and noting that "I" am not a business entity. As far as taxes and regulations, I'm in the same category as the guy down the road who plows folks' driveways for tips when he's bored, except he may get to claim a new truck with a nice plow as a business expense -- I don't think I could get away with that. I am exposing myself to unnecessary risk, however, by not filing for LLCs (again, waiting until I move - shouldn't be more than a month, now), so if someone were to sue me with punitive damages awarded, it's possible I'd be personally bankrupted - but I dislike the potential burden of having to keep my finances separated -- I should talk to a CPA about that, because I have no idea if I actually have to keep separate bank accounts if I went with multiple LLCs instead of sole proprietorship, which'd be a huge PitA.

Cheers,
Ben

Regarding selling a commodity you may have a valid point. I was thinking from perspective of accepting fiat money from all over the place and moving them further out of you accounts (in order to buy and deliver bitcoins) which to me looked as money transmitting service.

about CPA it's better to consult with one IMO regarding taxes. My understanding as an individual you must pay taxes on all (gross) income generated, where as a registered business entity you pay taxes on net income after expenses.

with your logic you might as well start a casino, who needs to ask permission to run one, right? since we're all adults

I do not treat Bitcoins as currency for tax purposes, nor does most of the community (out of my ass guess), nor do most tax/legal experts I have heard from. It's simple sales/purchases of commodities, which does not require additional licensing.

If I buy blank CD-Rs on Craigslist, I do not need to apply for MSB licensing, nor do I if I sell them, even if I do both simultaneously. I can buy and sell at the same time, keeping in mind that users are buying and selling directly from/to me - they are not fulfilling each others' orders. Applying for separate LLCs for each individual service may be preferable, but I do not perceive any legal risk in providing ability to quickly buy and sell a commodity, and there is really no tax benefit as this is not particularly significant business as far as G/L goes. EIC is EIC, and I certainly won't be far above the poverty line this year.

What is a taxe? What is "additional licensing"?  

I'm an adult who want to propose a service to others adults, why on earth would I ask permission to do this to some others dudes?


(sorry, I'm dreaming awake)

Consult with a CPA (not the one run by usagi) about taxes, how it may affect your personal trade/services and  consult regarding registering as a business entity as it may provide better tax conditions.
Providing money transmission service probably require additional licensing

The spiel
I have recently been approached by multiple people to provide a cheap alternative to BitInstant. - And so I will, thus launch "Ghetto Pen & Paper Exchange." I currently have accounts at CP Federal CU (is a member of CU Shared Service Centers Network Shared Branching, so you can easily transfer funds at one of ~4.5k locations in the US) and Erie General Electric Credit Union. Within two months, I will be adding $5k to a PNC account to open it up with free outgoing wires, which will vastly improve opportunity and eliminate the associated outgoing wire fee currently applicable. PM me for Routing/Acct #s, address, etc. If you are not already a "Signfiicant" or "Very Significant" business associate, and are not interested in other methods of obtaining "significance," toss $50 my way to be "Significant," $100 to be "Very Significant." 

Rules, Fees, and Such

Who May Use P&P Exchange
1) "Significant Depositors and Investors" -- people who have held a BDK CD until maturity in an amount of 100BTC or more, or who are confirmed to hold 100BTC-worth of BDK.BND or BDK on GLBSE. Trusted "significant" lendees may also be permitted to use this service in some cases.

• $1k combined (buying/selling) transaction limit per week.
• How you may buy Bitcoins and send USD: wire funds, ACH funds, mailed checks, in-person cash, and instant account transfers if you have a compatible bank/CU account.
• How you may sell Bitcoins and receive USD: wire funds, ACH funds, mailed checks, in-person cash, PPUSD "e-check," and instant account transfers if you have a compatible bank/CU account.
• Coins will be withheld until funds clear in my account if buying BTC. USD will be sent within 2 business days if selling BTC. If you're doing a transfer, please be aware of whether or not your bank/CU holds Shared Branch places a hold on transferred funds.

2) "Very Significant Depositors and Investors" -- people who have held a BDK CD until maturity in amount of 500BTC or more, or who are confirmed to hold 500BTC-worth of BDK.BND or BDK on GLBSE. Additionally, those who have successfully used over $2k worth of "P&P Exchange" services are "very significant. BDK "Board" members are, by default, "very significant."

• $10k combined (buying/selling) transaction limit per week.
• How you may buy Bitcoins and send USD: wire funds, PPUSD ($500 limit per month), ACH funds, mailed checks, in-person cash, and instant account transfers if you have a compatible bank/CU account.
• How you may sell Bitcoins and receive USD: wire funds, ACH funds, mailed checks, in-person cash, PPUSD "e-check," and instant account transfers if you have a compatible bank/CU account.
• Up to $500 worth of BTC will be sent as soon as your transaction hits my account statement, with anything over sent only after the full transfer clears in my account. USD will be sent within 32h if selling BTC. If you're doing a transfer, please be aware of whether or not your bank/CU holds Shared Branch places a hold on transferred funds.

FEES
"Spot" refers to 24h weighted average listed at www.mtgox.com. Significant Members will have spot price calculated when I transfer funds (after checks/transfer has cleared and within my 2 business day window to send funds). Very Significant Members will have spot price calculated when they send funds and will thus always know exactly how much they'll receive when they send.

FAST METHODS:
1) Wires (typically less than 3 business days, often near-instant)

• If you're buying BTC - Significant Members pay 1% over "Spot" or $10 - whichever is greater. Very Significant Members pay 1% over "Spot" or $20, whichever is lesser.
• If you're selling BTC - Significant Members receive 2.25% under "Spot" and will be charged a $20 fee if sending to one of my CU accounts. Very Significant Members receive 2% under "Spot" and will be charged a $20 fee if sending to one of my CU account.

2) Shared Banking/CU Member Transfer (typically instant, sometimes partially or fully held up to 3 business days for full funds to be released if not at one of my actual CU/bank branches)

• If you're buying BTC - Significant Members pay 1% over "Spot" or $10 - whichever is greater. Very Significant Members pay 1% over "Spot" or $20, whichever is lesser.
• If you're selling BTC - Significant Members receive 2.25% under "Spot." Very Significant Members receive 2% under "Spot."

3) In-Person Cash (I'm in Southern MI, so however long it takes you to drive out)

• If you're buying BTC - Significant Members pay 1% over "Spot" or $10 - whichever is greater. Very Significant Members pay 1% over "Spot" or $20 - whichever is lesser.
  
• If you're selling BTC - Significant Members receive 2.25% under "Spot." Very Significant Members receive 2% under "Spot."

4) PPUSD (Instant if "Instant," 3-5 business days if e-check)

• If you're buying BTC - Significant Members are not permitted to buy BTC with PPUSD. Very Significant Members are permitted to buy no more than $500 worth of BTC with PPUSD per month, and must be "Verified." Very Significant Members pay 3% over spot + any applicable Paypal fees.
• If you're selling BTC - Significant Members receive 2.25% under "Spot" and must pay any applicable Paypal fees. Very Significant Members receive 2.25% under "Spot" and must pay any applicable Paypal fees.

SLOW METHODS:
1)ACH (typically 3-5 business days)

• If you're buying BTC - Significant Members pay 3% over "Spot." Very Significant Members pay 2.5% over "Spot."
• If you're selling BTC - Significant Members receive 2.25% under "Spot." Very Significant Members receive 2% under "Spot."

2) Checks by mail (time varies depending on your location and the service you use -- 1-21 business days + 3-5 business days for check to clear if not a cashier's check)

• If you're buying BTC - Significant Members pay 1% over "Spot" or $10 - whichever is greater. Very Significant Members pay 1% over "Spot" or $20, whichever is lesser.
• If you're selling BTC - Significant Members receive 2.25% under "Spot" and are charged a $1 fee. Very Significant Members receive 2% under "Spot" and are charged a $1 fee.

Serious Legal Business
1) Be aware of local laws, yada, yada, yada, pay your taxes.
2) I am not a business. "P&P Exchange" is representative of a service personally offered by me, though the DBA is IOUcoin. "P&P" is not itself a registered business entity and is not intended to be interpreted as one. However, P&P is a service offered by BDK ("IOUcoin"), which is still more of an extension of me, personally, but it is registered with various governments for DBA/sole-proprietorship compliance.
3) P&P G/L is reported as that of BDK ("IOUcoin"), which also represents a selection of services personally offered by me (operating as IOUcoin, the DBA name), not a separate registered business entity.
4) By PMing me, you confirm you have read and agree to the Terms of Service ("ToS"), listed below:

• "User" refers to everyone using this forum (bitcointalk.org) to communicate with Ben Malec for any reason, at any time, retroactively, actively, and post-actively.
• User agrees to take compulsory government laws seriously, report taxable G/L to governmental tax agencies appropriately, and act lawfully.
• User agrees to not launder money.
• User agrees they are a US citizen over 18 years of age.
• User agrees he or she is literally either a pineapple, starfish, or koala bear.
• User is not a terrorist, drug-dealer (unless operating lawfully, with appropriate licensing), and never engages in Hateful speech as defined by law, nor discriminates against speech unless said speech is deemed by Law to be Hateful.
• P&P will terminate service to enemies of the State without question. You may report enemies of the State to [email protected]

If I missed something, lmk. Obviously, clear all transactions with me prior to sending anything to confirm I have funds available. To see if your CU honors Shared Branching, look here. Cheers,
Ben[/list][/list]