How did people buy bitcoin before Mt. Gox?

JayJuanGee

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Quote from: avp2306 on March 03, 2024, 10:51:45 AM

Quote from: Maus0728 on March 03, 2024, 09:08:13 AM

Is Mt. Gox the first exchange too? I've checked if they were with a quick search but yielded no efford, lead me to a user @dwdollar talking about creating an exchange though, but no conclusive answer about who's the first bitcoin exchange or I'm just not searching it right, not using the right words.

People may think that Mt.gox is the first exchange created but actually its not.

You can find detailed explanation about that in this article https://www.cryptohopper.com/blog/what-was-the-first-crypto-exchange-449

For sure there's a lot more to learn from past which is amazing to look back.

In late 2013, when I got into bitcoin MTGox was having freezes of withdrawals but it was still operating and people were sending money over there even after it had frozen withdrawals, yet I did not want to get involved in that craziness, but I did get involved with Localbitcoins, which made it easier to connect with individuals for peer to peer trades.

There was also Bitinstant, but it seems that Bitinstant was a bit before my time too.. but I recall the surprise of Charlie Shrem's arrest in January 2014. https://en.wikipedia.org/wiki/Charlie_Shrem

Hamza2424

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That's the P2P payment mode, there's no need for any third-party involvement in the transaction, to buy Bitcoin back in time, people use it to find services directly available on the public forums, Here on Bitcoin talk there are many such thread people usually trade their coins.

The trust system was also started to support the trading system for the P2P payments on the forum, to bring more reliability, No matter what happens if there's internet weather there's Biannce or any other D-App with liquidity available or not people can still trade Bitcoin in offline markets and using the public forums as Bitcointlak, me and you can also have a transection if there's need, all I need is to just create a new thread in the relevant section of the forum.

avp2306

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Quote from: Maus0728 on March 03, 2024, 09:08:13 AM

Is Mt. Gox the first exchange too? I've checked if they were with a quick search but yielded no efford, lead me to a user @dwdollar talking about creating an exchange though, but no conclusive answer about who's the first bitcoin exchange or I'm just not searching it right, not using the right words.

People may think that Mt.gox is the first exchange created but actually its not.

You can find detailed explanation about that in this article https://www.cryptohopper.com/blog/what-was-the-first-crypto-exchange-449

For sure there's a lot more to learn from past which is amazing to look back.

Maus0728

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I didn't come from their time but I do believe that most of them use Peer to Peer or P2P transactions for dealing with their bitcoins, there's not a lot of value back then so they've got some confidence in doing that kind of transaction and there's escrow services back then so it's not that difficult to be trusting of others to do your transactions and even if you get scammed, you move on and learn. I even think that P2P has been the thing that bitcoin's been made for because if you think about it, Satoshi would've mentioned a plan to create an exchange so people's can safely trade their bitcoins but I believe that it wasn't the case.

Is Mt. Gox the first exchange too? I've checked if they were with a quick search but yielded no efford, lead me to a user @dwdollar talking about creating an exchange though, but no conclusive answer about who's the first bitcoin exchange or I'm just not searching it right, not using the right words.

Litzki1990

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Technology has improved enough that there is no need to take the help of third parties to buy and sell Bitcoins. An investor can now easily buy and sell bitcoins through their exchange. Earlier transactions were done through third parties which was quite risky as many times it was seen that we were cheated of a lot of money due to transactions through third parties. Back then there was no system for anyone to complain if they were cheated by trading through third parties but now some important exchanges have introduced P2P transaction system which now allows Bitcoin to be sold safely. A customer or a seller can verify and then transact is a very positive thing. But since there was no such advanced technology earlier we had to trust the third party even though it was risky.

franky1

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Quote from: ebliever on March 02, 2024, 09:48:01 PM

Quote from: examplens on February 28, 2024, 08:46:32 AM

Quote from: franky1 on February 27, 2024, 03:53:47 PM

new liberty standard was another
bitmarket.eu
bitomat
then mtgox
then bitcoinica
then btc-e
then others followed

I would add Bitstamp which was founded in 2011.
It is less than one year after MtGox, but what sets them apart is that they are still operational. They are now the longest-running cryptocurrency exchange, after everything we've seen with other exchanges, it's a real feat.

I would also point out Kraken dates from 2011 and is still healthy and doing well. I thought they were the oldest survivor, but maybe Bitstamp has them beat?

EDIT: Never mind, the wikipedia page on Kraken states that while it came into being as an entity in 2011, the exchange did not open until Sept. 2013.

topic is about BEFORE MTGox.. meaning its not a topic to mention every single exchange
but as OGNasty reminded me.. IRC was a good place to trade away from CEX, in early days

alani123

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Even when Mt. Gox exchange was still active I remember making transactions peer to peer if I wanted to liquidate some Bitcoin. I would for example have someone order stuff I needed for me with their credit card and when it arrived I would pay with BTC. Of course this requires some experience and quite a bit of trust between the parties, but on many occasions it is better. It is still possible to transact peer to peer and trade crypto with cash. Many people actually prefer it.

dothebeats

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It's mostly peer to peer.

Back then, buyers and sellers will arrange a meetup in a location wherein they have access to the internet. Both of them will bring their laptops and get done with the trading after the payment has been made. It was obviously a lot safer back then because the value of bitcoin isn't that much, and only enthusiasts are buying and selling coins. Bad actors only became rampant when Mt. Gox opened its doors and people realized that bitcoin can be traded for that much.

franky1

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Quote from: OgNasty on February 28, 2024, 10:18:05 AM

People used IRC to chat and trade Bitcoin before mtgox. You can take a look at the experience here: https://bitcoin-otc.com/trust.php

It is also where the Bitcoin web of trust started, which was like the original version of the trust network here. People would post what they had for sale and others would contact them to buy. Pretty simple but it worked.

i totally forgot about that one, i even used IRC+WoT myself in my early days(2012-13), cheers for the reminder
i forgot that it too existed pre mtgox

i preferred the IRCWoT more than this forums silly trust rating*

(*thats filled with trolls social gripes about them crying that someone doesnt talk like a boyscout to them)

ebliever

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Quote from: examplens on February 28, 2024, 08:46:32 AM

Quote from: franky1 on February 27, 2024, 03:53:47 PM

new liberty standard was another
bitmarket.eu
bitomat
then mtgox
then bitcoinica
then btc-e
then others followed

I would add Bitstamp which was founded in 2011.
It is less than one year after MtGox, but what sets them apart is that they are still operational. They are now the longest-running cryptocurrency exchange, after everything we've seen with other exchanges, it's a real feat.

I would also point out Kraken dates from 2011 and is still healthy and doing well. I thought they were the oldest survivor, but maybe Bitstamp has them beat?

EDIT: Never mind, the wikipedia page on Kraken states that while it came into being as an entity in 2011, the exchange did not open until Sept. 2013.

The Cryptovator

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Let's say there is no exchange, but Bitcoin exists. We can simply sell it through P2P. The benefits of social media make it pretty easy to connect with each other. So we can share on our social media about buying and selling Bitcoin. This isn't a complicated process. Also, there are decentralised exchanges where no third party is involved; you can exchange directly from your wallet. In case you don't want to use any platform, then most probably scam will increase.

tranthidung

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Quote from: franky1 on February 27, 2024, 03:53:47 PM

"bitcoin market" was first fiat-btc exchange
https://bitcointalksearch.org/topic/m.726

new liberty standard was another
bitmarket.eu
bitomat
then mtgox
then bitcoinica
then btc-e
then others followed

im sure im missing a few mentions, but google can give you more answers faster then me finding old notes

Missing like Coinpal exchange?

https://web.archive.org/web/20110103031346/http://coinpal.ndrix.com/

A video on how to purchase Bitcoin on Coinpal.

History of CoinPal exchange that lasted very shortly for only four months.

Quote

CoinPal was an exchange that accepted PayPal for relatively small order sizes and a weekly limit on purchases.

The site was first publicly available on December 31, 2010[1]. On January 14th, 2010 CoinPal introduced an API that allows merchants and others seeking payment to use the service to accept micro-payments[2]. The operator of the site also operates CoinCard for selling bitcoins.

On April 30th PayPal froze the exchange operator's PayPal account and the exchange announced that service had ended[3].

goldkingcoiner

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Quote from: RedApronPark on February 27, 2024, 03:32:25 PM

And how are people buying/trading bitcoin now if they don't want to use third-party exchanges or custodial wallets?

I'm doing some research and writing about the history of bitcoin, and am curious if there are any OG bitcoiners out there who can tell me how it worked before bitcoin got big.

There are many different ways of purchasing Bitcoin, but the most important part is that nobody can stop you from purchasing Bitcoin, even if you did not go on a third-party exchange or custodial wallets.

The truth is, it does not matter if you are trying to sell Bitcoin or an expensive luxury item (like a car). Either way you can sell it without the need of a third party. All those third-party platforms are there for comfort, security and insurance.

Either way, any process regarding fiat involves trust. That is why we trade it in for Bitcoin in the first place.

Z-tight

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Quote from: blckhawk on February 28, 2024, 09:47:06 AM

What I'm really curious about is if escrow services have been a thing before exchanges and it's all just P2P, I guess it's still a matter of trust when it comes to this kind of doing transactions back then, I wonder too about the transaction fees, how much was it?

I think back in the very early days when BTC was not worth anything, there was probably no need for an escrow, people could simply just chat and trade their BTC's. During this time, people even gave away BTC's to people in order to support and promote the project, i.e. Gavin Andresen had a website that gave away 5 BTC's to people, so my point is, i guess at this time nobody was trying to steal BTC's from others, as it was not worth anything and was easy to mine on a computer, so maybe an escrow wasn't needed.

OgNasty

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People used IRC to chat and trade Bitcoin before mtgox. You can take a look at the experience here: https://bitcoin-otc.com/trust.php

It is also where the Bitcoin web of trust started, which was like the original version of the trust network here. People would post what they had for sale and others would contact them to buy. Pretty simple but it worked.

m2017

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Quote from: RedApronPark on February 27, 2024, 03:32:25 PM

And how are people buying/trading bitcoin now if they don't want to use third-party exchanges or custodial wallets?

I'm doing some research and writing about the history of bitcoin, and am curious if there are any OG bitcoiners out there who can tell me how it worked before bitcoin got big.

I didn’t see those glorious times, but I remember from stories that bitcoin were bought directly eer-to-peer (P2P). There were no exchangers back then and people used bitcoin (for buying and selling) exactly as it was created. You know that bitcoin is a peer-to-peer electronic cash system. Therefore, transactions took place, for example, in a cafe, where they received bitcoin for cash (and vice versa). At that time, bitcoin cost mere pennies, no one believed in the future of this system, which means there were few people willing to get it illegally (robbery, theft, etc.). Consequently, they were not afraid to make such p2p trade. By the way, such an exchange can be made today. For example, in BestChange there is a trade function Bitcoin-Cash (in addition to many other exchange directions), which is offered by exchangers with many years of experience and a good reputation (any deviations from the norm become immediately known). This is the answer to your first question in the post.

blckhawk

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I think that there's only P2P that's available before even a centralized exchange has existed in bitcoin, plus mining is fairly easy back then so if you want your bitcoin, you can just start mining and you'd get a huge reward already. It's a mixture of chat between the two people that wants to get something from someone and they'll pay them with bitcoin. What I'm really curious about is if escrow services have been a thing before exchanges and it's all just P2P, I guess it's still a matter of trust when it comes to this kind of doing transactions back then, I wonder too about the transaction fees, how much was it?

dzungmobile

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I was not here earlier than 2017 so I don't know about those very old exchanges but look at some resources below can help as I see Bitcoinica there.

https://chainsec.io/exchange-hacks/
https://cointelegraph.com/magazine/crypto-exchange-hacks
https://www.cryptowisser.com/exchange-graveyard/
Hacked exchanges since 2011.

examplens

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Quote from: franky1 on February 27, 2024, 03:53:47 PM

new liberty standard was another
bitmarket.eu
bitomat
then mtgox
then bitcoinica
then btc-e
then others followed

I would add Bitstamp which was founded in 2011.
It is less than one year after MtGox, but what sets them apart is that they are still operational. They are now the longest-running cryptocurrency exchange, after everything we've seen with other exchanges, it's a real feat.

Z-tight

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Quote from: yazher on February 28, 2024, 06:28:37 AM

more likely what we need today is Decentralized exchanges instead of CEX that keep updating their rules because of the SEC involvement.

There are a good number of p2p exchanges where you can trade directly without third parties, just as how it was done in the past. These p2p exchanges can also set up f2f trades for customers who want to trade that way, but you must follow safety protocols if you are going to meet your trading partner in person. It is true that there is more liquidity in centralized exchanges and people use it more, but for those who care about their privacy and do not want to lose control of their coins, there are options: https://kycnot.me/?t=exchange

Topic: How did people buy bitcoin before Mt. Gox? (Read 392 times)