Okay would like if someone can answer this question for me on trading. Say i have pokerstars and want bitcoin. Let say they are charging a 3 percent vig.
I assume you mean a 3% exchange fee?
So that means if i trade $1000 pokerstar to them... they send me back $970 of bitcoin in return?
That's up to you and the bitcoin provider to negotiate. It can be confusing to talk in terms of "dollars of bitcoin" since bitcoin is a currency of it's own. It's a bit like trying to talk about howm any dollars of euros you have. Also, since the exchange rate can change quickly, an amount of bitcoins can vary quite a bit in its dollar value. It would be much better to simply agree to a specific amount of bitcoins (such as 4.04 BTC) exchanged for a specific amount of pokerstars dollars.
Im confused but when and how do they lock in the price?
That's up to you and the bitcoin provider to negotiate and agree to. I've engaged in transactions where the other party wanted to lock the exchange rate at the tie of negotiation even though payment wouldn't occur for a few hours. I've also engaged in transactions where the other party wanted to lock the exchange rate at the time the bitcoin transaction was sent. I've also engaged in transactions where the other party wanted to lock the exchange rate at the weighted 24 hour average.
Example if current bitcoin price is $220... then once both users agree, then the price is locked at around $220?
Sure. The transaction is between the two of you. You can agree to whatever you both want to agree to. Nobody else is going to force you to use a different exchange rate.
What site do u use?
I typically look at BitStamp, Coinbase, Bitfinex, preev, Google, and Localbitcoins to get an idea what bitcoins are worth. Then I make an offer at a rate that I'm willing to pay.
Is it buy or selling rate?
That's up to you and the bitcoin provider to decide and agree on.
So basically that person will send $970 worth of btc at current btc price of 220 so they will send 4.40909 bitcoin?
Sure, if that's what you both agree to. If possible, you should make sure that it is very clear exactly how much bitcoins you expect to receive (not how much dollars worth of bitcoins) before you send the payment to the bitcoin provider. That way there won't be any confusion later about how much should have been sent.
I assume they just saend 4.4 or 4.41 and rarely use more than 2 decimal points right? Also so the price is locked and then its X amount of bitcoin? Or usually the bitcoin buyer or selling want an even amt of btc such as 5 or 5.5 btc etc?
I typically use 5 decimal places when working with bitcoin. That's enough to account for the transaction fee and enough that when expressed in dollar value can be easily rounded to the nearest penny.
So in another example of bank of america online transfer for bitcoin. The other person wants 4 percent. So that means I would have to give $1000 boa for their $960 in bitcoin?
Or perhaps it means that you would have to give them $1040 for their $1000 in bitcoin? It is best to make sure ahead of time that both you and the other party understand exactly how much dollars they should expect to receive and how many bitcoins you expect to receive.
So when we agree... then we lock in the current btc rate then he tell me the exact amt of btc such as 4.36 btc then thats all?
Yes, if you are both willing to lock the exchange rate at the time of the negotiation, then that's all.
So when i receive that btc, the amount should be around $960 right since sending btc from a user to another user is instant?
That will depend on when you lock the rate, how long it takes for you to send the payment, whether or not you are using an escrow provider, how many confirmations your wallet (or you) require on the transaction, and how long it is until you spend the bitcoins.
Do you know how long that takes usually?
I've been involved in transactions that took 3 days. I've been involved in transactions that took 30 seconds. It really depends on who you are dealing with. Typically, I'd say it takes between 10 minutes and 3 hours for someone to verify that they've received a payment from me and to send the bitcoins to me.
