In the interest of promoting Bitcoin and the Bitcoin economy, I'm willing to exchange USD for BTC, and BTC for USD, in the greater Burlington, VT area.
One of the wonderful things that Bitcoin allows is non-reversible transactions with low (or no) fees between people who don't have the ability to meet in person. It also allows the participants to be relatively anonymous to one another. Since Bitcoin is not yet something that you can ask your employer to pay you with, nor is it something that you can pay your rent or grocery bill with, Bitcoin will, for at least the near future, remain something that people need to exchange for their dominant local fiat currency when they want to leverage these benefits.
But this brings the chicken and egg problem of getting BTC when you need to use it, or transferring it back into your local fiat currency once you've received it. Doing this exchange online works, but it largely removes the benefits that Bitcoin offers in the first place. If you use PayPal to pay someone for Bitcoins, then you have already paid the fees and reduced your anonymity, so you might as well have just paid for the goods that you wanted with PayPal to begin with. Sending cash in the mail for BTC offers the possibility of increased anonymity and reduced fees, but stumbles on the trust issue, since you need to trust the remote cash exchangers implicitly, since you send the money first, hoping he'll follow through with the transaction. Again, if you are willing to send cash in the mail, the goods that you eventually intend to buy with the BTC are probably just as available by sending cash in the mail.
The solution to this, of course, is to arrange for local exchanges of the currencies. Since there is very little trust needed on the part of the person who is selling the BTC, fees can be minimal (basically, they just need to cover the cost of his effort to make the meeting, as well as the small amount of exchange rate risk that he has.) The trust needed on the buyer's part is relatively minimal, as well, and is equivalent to the trust needed for buying an item at a yard sale. Sure, one of the two parties can grab the cash from the other at any point, but this is equivalent to the possibility that one party was going to mug the other, and most people are comfortable with making transactions with this level of risk.
At least to begin, I expect that this is the majority of what I will be able to participate in. I have a comfortable (to me) amount of my currency held in BTC, so until people start buying my stock, I won't have much need to buy more to replace it. That said, unless I know that I have interest in selling me BTC, any sale of BTC that I make, I will intend to replace in the relatively near future. As such, my exchange rates will be based on the dominant online exchange available, Mt.Gox. Since there is some volatility to the markets right now, and it takes me a few days to execute a trade, I'll want to pad the exchange rate by a certain amount, which we will have to negotiate. In general, I expect my exchange markup to be around 3-5% for small amounts, less for larger amounts. Certainly, if you have the time, and the lack of need for anonymity, I encourage you to exchange online, as I do. I'll include suggestions and links below.
As mentioned above, unless I have people buying my stock of BTC, I'm not terribly interested in building up more BTC, unless you want to get rid of it at a relatively large discount for some reason. If you are getting rid of BTC at a discount because you are a criminal, I'm not interested; it just brings too many risks to me (I'm not a banker, but I certainly don't want to be hauled into court because I'm associated with somebody who was caught money-laundering, and get slapped with "Know your customer" laws, whatever they may be. If you have BTC, and are just betting against BTC (that it's going to collapse or something), then I'd consider taking it off your hands.
Also, if people do start buying BTC from me, I'll want to replace it, so letting me know that you have BTC that you want to sell would be a good idea, if you aren't in a rush to get rid of it. Then when I know I need to replace my stocks, I know that I can get it locally. This allows both of us to increase our anonymity over the online exchange methods.
|Send email with the words "BTC Exchange" in the subject somewhere, so I don't miss it.
|I'm agricocb on Freenode, and I hang out in #bitcoin-otc, where I'm registered in the Web-of-Trust. If we complete a deal, I would encourage you to register in the WoT, and I will be happy to give you a rating.
If you have the time to plan, and you aren't concerned about anonymity, here are a few hints about how to do it yourself, and avoid paying me to make it easy for you.
The dominant exchange, right now, is Mt.Gox. There's a lot of volume going through it, and there is quite a bit of volatility to the exchange rate to USD. If you have time to wait for a droop in the price, you'll end up with more BTC for your USD. Setting up an account at Mt.Gox is free and easy, and the commission on trades is pretty reasonable (0.65%). In order to execute trades on Mt.Gox, you'll need to have USD waiting in your account there. It used to be inconvenient to get funds to the exchange; now it's pretty quick and easy with Dwolla. There's another way to get USD into Mt.Gox (MTGUSD), which I'll write about below in #bitcoin-otc
Dwolla is a relatively new company that is making ACH payments quick and mobile. They are similar to PayPal except for a two main features that make them pretty well suited for BTC exchange. First, Dwolla accounts are only funded from ACH (which means that they are US only, but since you are here, I'm presuming that you are local to VT), which means that they don't have to charge the credit card processors' fees, and it also leads into the more important feature, which is that they don't do charge-backs. If you buy BTC from me with PayPal, and then tell PayPal that your account was stolen, PayPal has absolutely no problem taking your money back from me and giving it to you. So PayPal has a very high risk of fraud for sellers. (Also, PayPal has recently cracked down and shut down people who were accepting PayPal.) Dwolla is much safer in this regard. The fees are very reasonable, at a flat $0.25 per transaction. And recently, Mt.Gox has started accepting funding of MTGUSD into your account from Dwolla. So you'll have to wait the 3-4 days for the ACH transfer from your bank into Dwolla (and if you don't have your Dwolla account linked to your bank already, they have a verification process that takes 3-4 days before you can start your first transfer in), but then once it's in your Dwolla account, you'll be able to get it to Mt.Gox nearly instantly.
The other great option for buying BTC involves a bit more work, but can reduce your costs even more. There is a Freenode IRC channel where people hang out to make over-the-counter exchanges (#bitcoin-otc). In order to play, you'll need to participate in the Web of Trust, which requires using PGP (public-key encryption software) to build a reputation as a trustworthy person (it is hard to bootstrap trust, but if we make a deal face-to-face, I'd be happy to rate you, thereby bootstrapping your trust.) Once you are in the WoT and have been rated as trustworthy, you can post orders on the OTC order book, or you can use the IRC channel to barter for what you want. You can get lots of different things in trade in #bitcoin-otc, but the two that you are most likely to be interested in is either a straight USD→BTC trade, or USD→MTGUSD trade, if you want to play in the market. Some people there will take PayPal payments, but as the risk is high, it's more rare, and people will likely want a premium on the exchange rate to risk it. Again, Dwolla is a good way to handle exchange of USD with people there. The good part of #bitcoin-otc is that despite the higher amount of effort involved, there are no fees, and you can negotiate terms directly with your trading partner.All content on this page is copyright (C) 2011 Craig B. Agricola