Why are banking services used for bitcoin trading?

DeathAndTaxes

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Gerald Davis

Quote from: rplg on November 01, 2011, 05:56:29 PM

in effect, what I am proposing is to fire your bank, and use that cash to buy bitcoins yourself instead of pay someone to hold it and transfer it to complete the btc/cash exchange.

My employer won't pay me in cash. I have no problem with my bank. It is USAA.
It has no shareholders and all profits are returned to members so there isn't any incentive to fuck over depositors or borrowers.

Lastly the price of Bitcoin is related to utility and if the only way into the economy is to go meet a complete stranger with a bag of cash the utility of Bitcoin suffers and thus so does it's price. Honestly my life is busy and complicated enough to start tilting at exchange windmills.

Just wondering do you also keep all your retirement assets in a safe in your home because you fire your broker?
Do you expect all forex traders to just keep big bags of cash they hand back and forth with other traders holding bags of cash in their respective currencies?

speeder

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Quote from: rplg on November 01, 2011, 05:56:29 PM

a post to clear things up. I did not make the thread intending to attack anyone, such as owners of exchanges. I just wanted to spark some discussion on how to get rid of what I find is a bottleneck to many things in life.

in effect, what I am proposing is to fire your bank, and use that cash to buy bitcoins yourself instead of pay someone to hold it and transfer it to complete the btc/cash exchange.

I feel this post is needed to clear things up. I certainly did not start this thread with the intent of offending anyone or making enemies.

How you do that?

If you point me a way that I can do that, I would be very happy.

rplg

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a post to clear things up. I did not make the thread intending to attack anyone, such as owners of exchanges. I just wanted to spark some discussion on how to get rid of what I find is a bottleneck to many things in life.

in effect, what I am proposing is to fire your bank, and use that cash to buy bitcoins yourself instead of pay someone to hold it and transfer it to complete the btc/cash exchange.

I feel this post is needed to clear things up. I certainly did not start this thread with the intent of offending anyone or making enemies.

rplg

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Quote from: DeathAndTaxes on November 01, 2011, 02:42:23 PM

Because many of us have families and jobs working 50+ hours a week. I don't got time to track down some stranger and arrange a meet to exchange cash for coins.

Now if there were Bitcoin ATM (which have their own usage density problems) where I could exchange between USD and BTC I would use those but given they don't exist the exchanges work.

I guess I have to capitulate to this argument then, because my family and my 50+ hours a week job will eventually catch up to me trying to refute it.

DeathAndTaxes

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Gerald Davis

Because many of us have families and jobs working 50+ hours a week. I don't got time to track down some stranger and arrange a meet to exchange cash for coins.

Now if there were Bitcoin ATM (which have their own usage density problems) where I could exchange between USD and BTC I would use those but given they don't exist the exchanges work.

speeder

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Quote from: rplg on November 01, 2011, 01:40:02 PM

Quote from: deepceleron on November 01, 2011, 01:35:19 PM

People have money in banks. They want Bitcoins instead. They have to get their money out of the bank. Most users still would use online exchanges, which are distant to them. So they use bank transfer methods available on the exchange to transfer the money. Now they can convert their holdings into Bitcoins (which can be quickly transferred to your Bitcoin wallet), and finally be free of the old fashioned banks and nation-state controlled currencies. Hooray!

no, now they have linked their bitcoin address to their bank account.

So what?

Also, what about those that use online wallets? Or those that use brokers? (for example, I know some people that own bitcoin but paid someone else to keep them)

rplg

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Quote from: deepceleron on November 01, 2011, 01:35:19 PM

People have money in banks. They want Bitcoins instead. They have to get their money out of the bank. Most users still would use online exchanges, which are distant to them. So they use bank transfer methods available on the exchange to transfer the money. Now they can convert their holdings into Bitcoins (which can be quickly transferred to your Bitcoin wallet), and finally be free of the old fashioned banks and nation-state controlled currencies. Hooray!
http://geekman.com/images/snoopyhappydance_anim.gif

no, now they have linked their bitcoin address to their bank account.

rplg

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Quote from: genjix on November 01, 2011, 01:18:51 PM

Because if you transfer cold hard cash as a business in any significant volume you will get arrested for money laundering. Even if you check documents and ID, but end up with bad money, you will go to prison. I strongly recommend against those services unless they are highly regulated and following KYC laws.

Not because I support high levels of regulation, but to protect people from going to jail needlessly.

"those services" is it really a service? are you confusing this with running a cash to bitcoin exchange? Will I go to prison if I exchange bitcoins to my local currency if I do not check IDs and check if it is what you call "bad money"?

deepceleron

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People have money in banks. They want Bitcoins instead. They have to get their money out of the bank. Most users still would use online exchanges, which are distant to them. So they use bank transfer methods available on the exchange to transfer the money. Now they can convert their holdings into Bitcoins (which can be quickly transferred to your Bitcoin wallet), and finally be free of the old fashioned banks and nation-state controlled currencies. Hooray!

genjix

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Because if you transfer cold hard cash as a business in any significant volume you will get arrested for money laundering. Even if you check documents and ID, but end up with bad money, you will go to prison. I strongly recommend against those services unless they are highly regulated and following KYC laws.

Not because I support high levels of regulation, but to protect people from going to jail needlessly.

rplg

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Back in June, after a bunch of hashed passwords got leaked from mtgox I thought it would mean the end of using banking service based bitcoin trading. It does not even make sense to transfer funds from a bank account to an exchange, as you obviously ruin the anonymity part of bitcoin. You also have to rely on the exchange, for not disappearing with your funds.

Yet, several months later, it is still the most used method of purchasing bitcoins. Even after several exchanges have had their bank accounts frozed, people still keep using this system. There are some services like tradebitcoin.com which should make it easier to establish contacts (even though in a city of over a million, in a country which there are thousands of bitcoin users, I still cant see anyone with an ad up...).

Its kind of difficult to get ripped off doing a face to face exchange of BTC to cash, at least for amounts less than say $500. You meet up with the person in a public cafe which has wifi. One of you puts some cash on the table and their btc address, the other makes the transfer. As soon as we see one confirmation, the cash moves to the other side of the table. Not only this, but you get to meet another bitcoiner and perhaps have a cup of coffee with them.

Why isnt this widely used?

Topic: Why are banking services used for bitcoin trading? (Read 1774 times)