Topic: Bitcoil - Exchange bitcoins for ILS - page 2. (Read 13636 times)

With the recent issues with The Madhatter, I feel that I ought to say a few words about my own risk management strategies and trustworthiness. This also seems like a good opportunity to provide a general status update.

Things have been going relatively well. I'm still evaluating whether it makes sense to me to continue offering this service, and working on formalizing it as a business entity and figuring out the legal aspects.

So far not a single soul requested to sell bitcoins to me. However, demand for buying bitcoins has been very strong, much stronger than I anticipated or prepared for. In fact I'm out of stock as we speak. I am constantly buying on mtgox, but this both increases my cost (which I pass on to customers) and causes delays in supply. I'm working with my bank on streamlining transfers to mtgox, and will try to make transfers more frequent. This also has cost implications, but as I said to mndrix once, having a functioning service trumps minimizing fees. I try to apply the same for my own business. I'm also working on arranging the reserve funds needed for a smooth operation.

I try to build a sustainable business model with fees which, to the best of my estimates, cover any risks I'm taking, as well as incentivize me to continue operating the service honestly. The ideal is that whatever I may stand to gain from abusing my reputation would be dwarfed by my future earnings from maintaining it. If an opportunity to make actual profit by going rogue ever presents itself anyway... Well, I certainly have no intention of taking it. It is well known that otherwise upstanding people can change their ways when facing a large profit opportunity. I'd like to think I am at least resilient to its corruptive power.

I don't typically offer locked exchange rates, for a reason that's mostly technical. I receive payment by bank transfers, and in most cases I have no way of knowing when a transfer order was given. Someone could lock a rate, wait to see changes in the global exchange rate, and back out if it becomes unfavorable. Dealing with this by way of a deposit or payment for a purchase option would be more complicated than I'd like at this point.

If I did offer locked rates, honoring them would be a no-brainer. I'd set aside the agreed upon amount of bitcoins, and for all purposes I have already sold them for a given price, and they now belong to the customer. I'm merely holding them until the payment arrives. Refusing to release them is downright stealing, no different than any vendor stealing the sold merchandise after the sale.

What I do is open rate, I determine the rate at the time I see that I received payment. This is easier technically, but trickier financially. If the rate drops too low my stock could be no longer sufficient for the trade. I do keep a spare to protect against normal fluctuations. But if this happens anyway, I would typically send the bitcoins as they become available (which shouldn't take more than a few days). In the highly unlikely (I hope) catastrophic scenario that the exchange rate crashes, committing me to a large bitcoin payment, and then climbs back up to a level at which I will never be able to purchase the required amount, I will simply send the money back by bank transfer.

You do now.

Holy-Fire didn't know you're from Israel. Cool!

שלום חבר

My Hebrew is very rusty, took me 20 secs to actually type this.

I go by the price at the time I log in to my bank account and see that a transfer has taken place. This spares me the need to have a system to keep track of the price at the time of placing the order. It also protects me from some kinds of fraud.

Nice.

I am thinking of starting something like this and I am curious on how you would handle de delay when receiving funds.

If someone sends the order for buying BTC today and you receive the bank transfer tomorrow, what price will you honor?

Thanks!

Not too many, but there are.
Anyway, I think conversing in foreign languages is supposed to be confined to the "Local" section of the forum.

יש ישראלים שמשתמשים ב-ביטקוין?

אחלה סבבה

I have started a new service, Bitcoil. If you have an Israel bank account, I will buy and sell bitcoins for Israeli New Shekels. Payment is done by bank transfers.

For now, orders are processed manually and placed by sending me an email.

Taking into account the fees involved in exchanging ILS and USD, required for most other methods of buying and selling bitcoins, I believe my service is the cheapest way for Israelis to exchange bitcoins for amounts of >100 ILS. Please let me know if you think I'm wrong.

Questions and comments, and of course using the service, are all welcome.