Cryptocurrency exchange site Bitcoin exchanger.

Helping a friend reopen her business with Bitcoin

A friend of mine owns a hotel inland from Cancun, Mexico and was struggling with expenses related to reopening - if she couldn't foot the upfront cost, she'd go under. I saw an opportunity to help her out and introduce her to Bitcoin, so I offered her a small personal loan on one simple condition: she had to accept it and repay it with Bitcoin.
She's not tech savvy and my Spanish is broken so this was also a test to see how usable the tech is. All told it took just half an hour end-to-end and $0.41 in transaction fees. Got her set up with an Electrum wallet to transfer the BTC, she had a friend with a Bitso account (Mexico's premier bitcoin exchange) to sell the Bitcoin, and she got MX pesos back from him day-of.
Bitcoin was literally the only way this loan could work - I'm U.S. based and each repayment installment was small so Western Union's huge fees made it impossible. The hardest part is still the conversion to local currency (no Bitcoin ATMs were nearby and Local Bitcoins was confusing for her- but Bitso seems like a really intuitive exchange within Mexico). Hopefully that will improve as more businesses accept BTC payments direct.
She's now a Bitcoin user and she got why it's a big deal without any explanation - it was fast, convenient and a lot cheaper than what she's used to
submitted by admin_default to Bitcoin [link] [comments]

A few observations from an outside observer

I'm fairly familiar with bitcoin and economics and there are a few things that trouble me about the bitcoin community in general and this subreddit in particular:
And by the way, this is all coming from someone who would love to see bitcoin succeed as a stable currency.
The promise of bitcoin seems to be two pronged; first, it's like cash that's better than cash. There are no middle men, no (low) transaction fees, no delays, and no chargebacks, but it's secure and works across the globe. Second, it's libertarian friendly because it's free from direct government or corporate regulation or manipulation. However, the community that espouses these promises, doesn't seem to really believe in them when it comes down to brass tacks.
Use as Day-to-Day Currency
Bitcoin booms and busts are not good for bitcoin adoption. Wild fluctuations in price are not a good quality to have in a currency. Even strong increases, without later busts, are not good for bitcoin-as-a-currency. People want a currency to be boring and stable. However many people here cheer wildly and become incredibly smug about bitcoin's "success" when the price soars. This forum doesn't seem to value bitcoin-as-a-currency, it values bitcoin-as-a-speculative-commodity.
I decided to checkout BitcoinStore to see what shopping with bitcoins would be like. I checked out the price of two different goods there and at Amazon. The first was a Pentax MX-1 12 MP Black Digital Camera. At BitcoinStore it was 0.4773 BTC / $348.89. At Amazon it was $263.99. So not only is it cheaper at Amazon, but I don't have to go through the hassle of converting my USD into BTC to get it. How much will it cost me in fees just to make the conversion? The second item was a Fellowes 55-Piece Computer Tool Kit. At BitcoinStore it was 0.0574 BTC / $41.78, and at Amazon it was $36.99. Why would someone go through the hassle and cost of converting USD into BTC just to pay higher prices?
But, the higher prices weren't the primary the issue. While shopping, the price per BTC changed from $730.91 to $727.90, and the price of the camera went from 0.4773 BTC to 0.4793 BTC... While I was shopping! Can you imaging wheeling your shopping cart around the grocery store, putting things in your cart at one price, and by the time you get to the checkout, it's a different price? And not because the inherent price of the things you're buying changed, but because of your own currency's fluctuations? That's crazy. For bitcoin merchants this happens of course because everything is really priced in dollars, but more on that later.
Use as Investment/Lending
Obviously, there can be utility in investing in bitcoins, lot's of people are speculating on bitcoin. However, investing with bitcoins is another matter. Let's say I lend you $1000 and expect $1100 back from you in one year. That could be a good deal for both of us. Or, you know, if I don't think you're great with money, maybe I'd say that's a bad deal. Either way, we have a stable currency with which to value the transaction. With bitcoin I can't see how either the lendeinvestor nor the borrower would be able to accept that deal since neither has any idea what the value of bitcoins will be at the end of the year. The price could change so much that the 10% in interest charged could be meaningless in the face of the value change. This reminds me of the situation we were in when the government was trying to buy toxic assets. The market was frozen because no one knew what a good price should be. It wasn't just that they were valued very low, at least then people could agree on a price, it was that no one had any idea what the value was so no one wanted to buy or sell.
Backed By USD
Before my shopping experiment at BitcoinStore I honestly didn't know how they priced their goods. I didn't know whether the prices were in BTC (and the equivalent prices in USD fluctuated), or whether they really priced their goods in USD and the price in BTC fluctuated. After seeing the price of the camera fluctuate in order to keep the price the same in dollars it became obvious that bitcoins only have value right now because they're backed by the dollar. The only reason they're worth anything to anyone is because someone somewhere can get dollars back out. Otherwise the stores wouldn't peg their prices in USD, they would price them in BTC. But of course they can't do that because of the wild price fluctuations, who's going to buy a 5BTC consumer camera at this point? Interestingly, the shipping cost is quoted directly in USD in their FAQ without even the pretension of pricing in bitcoins. The fact that they (and I assume all other merchants) are really pricing in USD should tell you something.
How much commerce do you think could happen in a world where one day a six pack of beer costs $10, then the next it's $1? The reason this happens in the bitcoin world is that bitcoins are actually backed by dollars! Everyone is always converting their prices to and from dollars to figure out how many BTC to charge. For all the talk of an anarcho capatilist crypto currency that's free of Fed manipulation, it seems awfully strange that every transaction is truly thought of in terms of dollars. This reminds me of an episode of Planet Money where they go to a libertarian free market utopia meetup where you can buy and sell unregulated beer and bacon with gold. Except everyone's constantly checking the price of gold to adjust their prices to make sure they're still getting the same price in dollars. Because everyone, even these anarcho-capatilist-fed-hating-libertarians, trust the value of dollars more than the value of gold. Just like every merchant that accepts bitcoins trusts dollars more than they trust bitcoins. So much for being free of manipulation. Maybe bitcoin's slogan should be, "Bitcoins, backed by the full faith and credit of the US dollar."
Speculation Delusion
Among those who only care about bitcoin as an investment opportunity, and don't care about its use to buy and sell actual things, there seems to be a lot of self and communal delusion. This is what you read on reddit when the price goes up:
That's the reason this "bubble" will never pop. Nobody will sell for chump change, when they know they can just wait for a few months and get dat profit.
So is everyone else, that's why it can't go down. Better buy now, until it goes even higher.
Hahah, I know that special bitcoin feeling :) Don't be afraid to jump in, water is really warm here
And this is what you read when the price goes down:
I bought in March. After it crashed I was laughing and bought more. This recent crash I wasn't able to buy more, but I would if I could. Welcome to Bitcoin.
Think about these reactions... So it's always good news no matter what the price does? Here's another way to think about it: redditors seem to like theories to be falsifiable and mock beliefs that aren't. I'm assuming bitcoin investors believe their investments to be sound and logical. This would require some model of the real world that suggests the price of bitcoin will go up. To be a good model, it must be falsifiable, right? So what would falsify this model? What series of events would be necessary to make these investors believe bitcoin isn't a smart investment? Neither the price going way up nor crashing seem to do so.
Final Thoughts
Again, I want bitcoin to succeed... as an awesome, hyper-liquid, international currency that's free from bank and exchange fees. I want to be able to buy anything anywhere in the world without worrying if it's going to be accepted or if there's a fee. I travel a lot and I've had so many annoyances with exchanging currencies and sending money to people abroad that I'm just sick of it. I've been hit with so many exchange fees and foreign transaction fees. I've had to use western union to send money to someone to rent an apartment. I mean, WESTERN UNION?! What century am I living in? I've arranged a multi-day tour for which I had to pay around $1000 in cash when I got there. My debit card limits wouldn't allow for that, and I wasn't going to do a cash advance on my credit card. So I thought the safest and easiest way to bring that money over was in travelers checks. Of course, upon arriving, I found that no bank in that country would cash travelers checks any more (I don't blame them, but I thought like western union, this might still be something that people do). Luckily the tour guide had a friend with a store that took credit cards so the friend charged my card and would give the tour guide the money when it came in from the credit card company minus the transaction fee. That means the tour guide paid the card processing fee and had to wait up to a month to get his money, I had to pay a foreign transaction fee, and I paid a fee to buy the useless travelers checks that I ended up depositing back into my checking account upon returning home. And this was only because we were lucky enough to have a guy so flexible and helpful about the payment.
So please don't think I'm just being a detractor and pooh-poohing on something that could be great. It's just that I see the "community" as being highly anti-productive.
Edit: formatting and typos
submitted by HowIsntBabbyFormed to Bitcoin [link] [comments]

How do I sell cryptocurrency without documentation of my cost basis? (US)

Hi PF,
As the title says, I have a problem. I have been investing in and trading cryptocurrency for 5 years. I lack the ability to substantiate any claim as to the source of these funds because I did not keep or cannot access 4 out of 5 years of records of purchases and trades that led to this point. In my (minor) defense, there was zero guidance about taxes and cryptocurrency when I bought the initial coins.
Here is where I screwed up:
1- I bought many bitcoin on mt gox, bitinstant, and coin.mx. All three are defunct, I have no record of these purchases. Not in my email, not on my bank statements (cash, moneygram, western union were primay payment methods). Purchase dates, unknown. I do know the prices of the cheapest and most expensive coin of this group as well as how many so I know the average price, but again, I cannot prove any of it.
2- Many trades were made on various exchanges over the years, each being a taxable event. Of 5 years of trading, I only have records for the most recent years records. One exchange is defunct, one does not have user accounts and provides no way to lookup order history, and the other I have lost the 2FA access to. This is thousands of trades that I have not properly documented with unknown dates, prices, gains, etc.
3- I bought another crypto, Ethereum, in early 2016. I did this by exchanging bitcoin for it. I have no record of this taking place. I sent bitcoin to a service that sent me the ethereum in return. I know the price of the ethereum and quantity but again, there is no documentation of this purchase.
I want to cash out, pay my taxes, and buy a house. I just don't even know where to begin. Can a tax professional help someone who can't provide any documentation of such a thing? Certainly there must be some way to resolve this properly?
The little price and date information that I do know exists only in my head. I don't think that quite cuts it with the IRS when they ask for proof. I'm a bit worried, I don't want any problems with the government.
-A Throwaway
submitted by cointhrowawayhelp to personalfinance [link] [comments]

Of Wolves and Weasels - Day 326 - Weekly Wrapup #41

Hey all, GoodShibe here!
This was your week in Dogecoin.
This Week’s oWaWs
Announcements
Top Images/Memes of the Week
Dogecoin In the News
Good Reads
Did I forget something? Of course I did! Please let me know in the comments and I'll add it in here! :D)
It's 6:56AM EST and we've found 96.20% of our initial 100 Billion DOGEs - only 3.80% remains until we reach our soft cap! Our Global Hashrate is up slightly from ~1246 to ~1276 Gigahashes per second and our Difficulty is way down from ~25750 to ~16264!
As always, I appreciate your support!
GoodShibe
submitted by GoodShibe to dogecoin [link] [comments]

Thought Experiment: International Money Transfer Business Model Using Bitcoin

Hello all!
I am an entrepreneur that lives in the southwest United States. In my area, we have a very high migrant worker population which sends millions of dollars every year to family members in Mexico and other Latin American countries. These workers get absolutely scalped by money transfer services like Western Union to send the cash.
I have been reading quite a bit about bitcoin and the technology behind it. I am technology savvy, but I certainly am not an IT specialist. I was hoping that some of the more bitcoin savvy folks could help me fill in some knowledge gaps and brainstorm.
Thanks for humoring me! Hopefully you guys can help me with my thought experiment.
My thoughts so far are as follows:
  1. The problem here is that these migrant workers get charged large fees to transfer money to their families abroad. They need a cheap and secure means to do so. Bitcoin seems like it could address this problem.
  2. These workers would be primarily interested in conducting transactions using physical cash or a check, transferring it to their desired location and then collecting the money on the other end in cash or a check. This would require the funds to be converted to BTC on the sending end and then back into the desired currency at the receiving end. I know that this can be done via BTC exchanges, but I'm not sure how that works. Would it be plausible to piggy back off of existing exchanges? Would these exchanges offer my business a discount on their fees if I am conducting bulk daily transactions?
  3. I am not interested in establishing new infrastructure to move cash around. Instead, I think that I can use existing infrastructure. I worked security in the past at check cashing businesses (there are a ton around here). They already have the systems in place to move large amounts of money around. They also already have an established customer base in my target market. I would like to place the technology to seamlessly conduct BTC transactions in these already establishes businesses, in the US and the Mexican store fronts.
  4. I know that BTC is still volatile compared to other currencies. So much so that if a transaction takes several days, you run a risk of losing a large percentage of the money. As I understand it, this risk could be mitigated by speeding up the transactions by paying fees to miners. Is this correct? How much can I affect the speed and at what point would it become cost prohibitive?
  5. Can anyone point me in the right direction of products I could use that already exist to conduct these transactions? AKA BTC point of sale tech?
  6. Can anyone point me in the right direction about the tax and legal issues of conducting these transactions. For example, if someone buys BTC at a location in the US and sends it to MX, would they have to pay sales tax when they purchase the BTC? That would definitely nuke the idea.
[EDIT: 7. I would like to add that the recipients of funds are likely to be in developing countries who do not have access to much computer technology, therefore I need a system that doesn't require a physical BTC wallet. The users in the US are also unlikely to be tech literate.]
Thank you for your time! Any input would be appreciated.
(I am not particularly interested in discussing the politics of these transactions other than how do we conduct them with the least governement involvement possible. Not because I am trying to circumvent the government to deprive them of what is due, just because the government makes EVERYTHING more expensive.)
submitted by evil_capitalist123 to Bitcoin [link] [comments]

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