Topic: Making Bitcoins easier to buy - brainstorming (Read 4542 times)

In the U.S. that is available now, using MoneyPak
  http://en.bitcoin.it/wiki/MoneyPak
You buy it at Wal-Mart and elsewhere for $4.95 + whatever amount you wish to send.  Then you redeem the code at an exchange where MoneyPak is accepted.

There are more options similar to this coming in the next few months.

When a business gets a chargeback, they basically have to eat the loss.  They lose the entire amount of the sale.

The only way to have any fighting chance in the dispute is to present a signature from the purchase.  With online transactions that is not possible, so no matter what CVV code or IP address you colllect, you lose.  You lose every time.

The only way to trade one currency for another currency is through a currency exchange kiosk.  Or through a forex account.  Bitcoin will work the same way.

Seems like the ripple project may help with this.

rippleplay even tracks the dominant BTC exchange rate:

https://ripplepay.com/

I came up with the idea of using an intermediary currency to interface with chargeback-prone currencies.

Maybe call it PalCoin or something like that.

We keep track of how much of what has been spent on it has been charged back, and use that to set exchange rates for it.

In six months or so any PayPal spent on it will hopefully be beyond the point where it could be charged back, but if only PayPal is ever spent on it (in other words if PayPal is all it has in its reserves to "back" it aka to "buy itself back" with) it would be potentially totally worthless for the first six months following its first purchase of PayPal money (aka PayPal money's first purchase of it).

So okay maybe it won't actually get to have PayPal as one of the currencies in its reserves, but that would be PayPal's fault not its own.

It would maybe be like back in the era when Bitcoin was dirt cheap. PalCoin would be almost worthless due to being backed by pathetic stuff like PayPal or Credit Card money. If it is so nearly worthless you ought to be able to pick it up cheap, right?

So maybe buy 10,000 PalCoin for one Bitcoin, then sell it to credit card users "hey guy why mess with Bitcoin, that will take days and it will cost you several dollars per coin! Buy PalCoin though and I can give it to you right here right now instantly, 100 PalCoins for a buck!"

-MarkM-

They bend over and take it in the.......


This is the major problem with online CC use. The fraud becomes a business expense. I don't know a single online business that does not lose a significant portion of their profit to fraudulent CC use and chargebacks.

How about giving discounts not by actually reducing the price, but by a cash-back in bitcoins?

You buy something from me for 100$, go to my website, register it, and i'll give you 10$ worth of bitcoins.

I think you should be able to buy with pre-paid Visa and Mastercards..stuff you would buy in like a supermarket.

Alright I'll do that, let's see if it works out.

I've been thinking about a "comes with Bitcoin" model. People who already sell something could either toss in a trivial amount of coin or have a premium version that comes with a good chuck.

Examples:
An etsy store that sells a stuffed Bitcoin Bug and comes with a bit dime.
A cam girl who sends you 1BTC as the climax of the show.

Titles like the one on this thread hurt discussion. Some people don't open every thread and need to know what will be inside, that's what a title it for. You can still change it, try something like "Making coins easier to buy - brainstorming"

But if banks and credit cards vendors all block Bitcoin by allowing chargebacks to always win, then Bitcoin has no chance at all to become widely used.

I dislike this because I want to allow customers to use Bitcoins for my current business, but I do not want to yet because my customers can't get them in a proper way anyway.

what do other businesses do, when someone uses a stolen credit card?

if you want to be reasonably safe, you could send an activation code by regular mail on first order to reduce fraud.
that's 2 days wait for your first order, and instantly after.

What're you going to give to your debt collector when an order for 10BTC with a stolen credit card comes in?

High fees doesn't really fix anything, as it alienates legitimate customers and leaves you with higher volume of fraudulent orders.

The only way I can really think to do it is to have hold times on the first order on a new card - but if people wanted long waits for their Bitcoins they'd probably just go the bank account->exchange route.

paypal isnt the only CC processor around. the chargeback argument isn't really one either.
all businesses have to deal with that.

a serious business, a credit card processor, and a debt collection agency and you're good to go.
of course, why would a serious business get involved with bitcoin at this point...

There were such sites in the beginning, paypal and the banks block it now. They don't like to get useless.

Yea I want to use my paypal to buy your btc. Promise I won't charge back

Anyways though, I was considering opening a site where you could buy and sell btc anonymously and instantly. Basically the way the site would work is when you wanted to sell btc you would send the btc to my bitcoin account and I would list it on the site. You would set a price like 17$ or whatever and a time limit. If no one buys the btc in that time limit then I send the btc back. If you want to buy btc then you browse the listings of btc and buy whatever you want and pay instantly. You send the money to my account and I then send the money to the seller. No accounts, no registration, no logs.

I decided against the idea due to potential chargeback fraud. You would need to be either moving a large volume or charging high fees to justify the risk of chargebacks. At the end of the day- too risky.

So when is your site going online?

Since digital currency purchases are against PayPal's terms of service, no site will be able to offer that.  The closest might be how on VirWoX you can buy Second Life Lindens (SLL) with credit card and paypal, then trade those SLLs for BTCs.  It isn't cheap, but it is doable.

As far as bank accounts, in the U.S. there is Dwolla for that.  Then from Dwolla you have your choice of exchanges where you can convert Dwolla to Bitcoins (e.g., ExchangeBitcoins.com, Mt. Gox, TradeHill, and more.)

in some other countries, bank transfers straight to the exchange are possible.  
 - http://en.bitcoin.it/wiki/Buying_bitcoins

There are new exchanges and payment methods being added at an increasing rate.  And yes, there is even more to be done.  

But neither credit card to bitcoin nor PayPal to bitcoin are likely to happen.  Unless it is P2P, with your friend, a family member or a neighbor.

If I were to buy a block of gold, I'd have to pay more than market value to get it from a merchant.

If I were to sell a block of gold, I'd have to sell to a merchant for less than market value.




That said, I own a restaurant and you if you want buy some bitcoins, you'd have to cover the credit card charges, 35 cent + 3%, and I'd have to make some sort of profit because I have to pay 10.5% tax since the government has access to my cc income statements.

Interested?

Direct deposit to bank account? Transfer to account?

Agreed... but the problem is in mitigating the chargeback risk. Solve that, and a million such services will spring to action.