Here's my theory (from right field) on where the free lunch is coming from:
Bitspend is a hosting company that has invested a lot of extra rack space into mining equipment. They see the giant bubble brewing and have realized that bitcoin needs some legs to stand on. If bitcoin survives, Bitspend's mining operation makes a huge profit. If it crashes, they lose a lot. So giving people an easy way to use bitcoin as an actual currency rather than a speculative investment has a huge long term benefit for them.
Whether my theory is true or not, I think many other heavy mining operations would benefit through similar services. If there are any other big miners out there, I hope you see the value you can add to your investment by doing things like bitspend.
Don't even need that. BTC has been growing in "value" significantly over the past month or so. If they just wait a month between receiving bitcoins for payment and redeeming them for cash or whatever, that'll likely be a reasonable return on investment.
Say I'm in the US, but I have an overseas website hosting a browser exploit kit that pushes a trojan to non NATO type countries that steals their bitcoin wallet and mails it to me. I then spend those bitcoins with a US service like this and get a US company to ship goods to a US address. Let's even say the US service knows I'm shady but doesn't care as long as my bitcoins show.
Who of any of us are breaking laws? My understanding of US standards is that hacking foreigners on foreign lands generally doesn't constitute a crime, and most jurisdictions don't seem to treat virtual goods like wow gold as actual theft.
Seems like a rocky and lawless world out there for crypto currencies, especially with so many russians / eastern europeans involved in bitcoin.
I have trouble believing I'd get very far calling up the FBI to report a bitcoin theft.
I have trouble believing that you'd get very far calling up the FBI to report that someone hit you on the head with a hammer for the purpose of stealing the $100 cash in your wallet.
Basically, petty crimes are not important. Especially to the FBI. Whether Bitcoin or USD, they don't care.
It's interesting to see that this guy wants to transfer BTC -> USD in the form of Newegg shipments, but I have yet to see anyone major accept Bitcoins directly.
Newegg has something of useful value (like a hard drive). Both BTC and USD have no useful value in this sense. The actual item 1 USD is simply a piece of cotton-paper with ink on it. A BTC is a mathematical hash. Nobody major with useful objects accepts BTCs. They accept USDs.
I would think that most people trading Bitcoins are just trading it. The price goes up and up because everyone is just buying and buying so they can sell before it goes back down. At some point, enough people are going to randomly decide they're done and sell at the same time, and the transfer price will go all the way to (near) zero. I haven't seen many people actively trying to make a real economy out of it. That's why I have no confidence in Bitcoin.
Accepting BTC directly would really be ideal from large vendors. But one very interesting thing about our service is the worldwide shipping. Newegg makes it very difficult to buy with a non-US (or non-Canadian) credit card. They won't ship outside the US or Canada either. So it really opens up the market to other people. Things like this are exactly what we at bitspend want bitcoin to be successful in. Opening up new markets.
same goes for gold. proof of work systems are unintuitive.
the value is determined by average investor time window and whether or not the network is growing slower or faster than a certain rate determined by that time window.
people buy gold with the intention of later selling it to someone who also wants to buy it so they can sell it later. why does anyone bother? because there is demand for transporting value over time. gold supply is low, the investment window is long, and the number of people who wish to store value for a later date is increasing.
How are you guys mitigating the volitility. Arbitrage? Seems to me with +- 10 USD in one day, if an order comes in during a top when the quote from newegg is for $20K and suddenly the exchange tanks you'll be stuck with a heavy loss. Of course, it works the other way too...
Volatility is not a real big issue because we can quickly move bitcoin into USD. If a customer sends bitcoin and wants to cancel before the order is placed, then there is no problem. We will just refund them. Customer always comes first.
Good point. Where can I buy Bitcoin FX options? If I am a business with Bitcoin exposure, I want to be able to hedge that. What do the markets think about this idea?
Damn this is getting interesting. I'm a HUGE fan of bitcoin but I'm too chickenshit to accept payment for our business. (chickenshit being a summary for issues relating to IRS, fraud, currency stability, deflationary risk, etc)
When the IRS throws their hat into the ring it's going to get serious, both in terms of positive PR for bitcoin and risk. That will happen once there's a full service economy in the currency i.e. ability to reliably: earn, spend, exchange, borrow, lend and save. 99% of this activity will be off the IRS radar and thus will be off their books.
The IRS taxes... money, right? Does it tax virtual currency? Sorry, I'm not sure. My line of thought was perhaps there's something written where it states that only the official currency is taxed.
I agree with you though, the whole Bitcoin thing is getting very interesting.
P.S. would the down-voters explain? It's not like I know everything about tax law, I was simply asking a question. :)
This is perfect for me as someone who does not live in the US. I live in Peru, don't have access to real electronics, cannot order from newegg without a US credit card / US address. If this site really does mail forwarding, then it would be awesome for me.
I just wish they also did clothes, books, maybe amazon.com or something.
I made an order through them tonight. I was worried too, so I made the order through "Clearcoin," which is a bitcoin escrow service (created by the founders of bitcoin from my understanding). So, one way to know to know it is not a scam is to use an escrow service (always a good policy, actually).
I am not in the US. Can I order products from this site and receive stuff from new egg in my home country (Russia)? Can I order from amazon if it is cheaper than newegg?
I can't say I'd noticed. Admittedly it's not trivial, in that I don't know of anywhere you can just show up with a credit card and buy a bitcoin, but it's hardly rocket surgery to fund a MtGox account.
It's still really, really hard to obtain bitcoins.
I'd drop at least one "really"; you just need a decent AMD GPU. The relatively wimpy one in my iMac can generate 0.1 BTC/day, which at current exchange rates is a few dollars. It would be easy to do 5x better than that with a PC tower, without going nuts with a dedicated mining rig.
It's getting easier in Canada at least; an exchange just started up at http://www.cavirtex.com -- With email Interac transfers, you can get funds in and out within an hour or two.
The site's still in beta, though, but the devs hang out (and are responsive!) in the Canadian bitcoin irc channel, #bitcoin-cad on freenode.
[+] [-] phamilton|15 years ago|reply
Bitspend is a hosting company that has invested a lot of extra rack space into mining equipment. They see the giant bubble brewing and have realized that bitcoin needs some legs to stand on. If bitcoin survives, Bitspend's mining operation makes a huge profit. If it crashes, they lose a lot. So giving people an easy way to use bitcoin as an actual currency rather than a speculative investment has a huge long term benefit for them.
Whether my theory is true or not, I think many other heavy mining operations would benefit through similar services. If there are any other big miners out there, I hope you see the value you can add to your investment by doing things like bitspend.
[+] [-] jamie_ca|15 years ago|reply
Assuming, of course, that trends continue.
[+] [-] Astrohacker|15 years ago|reply
[+] [-] trotsky|15 years ago|reply
Who of any of us are breaking laws? My understanding of US standards is that hacking foreigners on foreign lands generally doesn't constitute a crime, and most jurisdictions don't seem to treat virtual goods like wow gold as actual theft.
Seems like a rocky and lawless world out there for crypto currencies, especially with so many russians / eastern europeans involved in bitcoin.
I have trouble believing I'd get very far calling up the FBI to report a bitcoin theft.
[+] [-] jrockway|15 years ago|reply
Basically, petty crimes are not important. Especially to the FBI. Whether Bitcoin or USD, they don't care.
(Relevant internet meme: honey badger.)
[+] [-] sdkmvx|15 years ago|reply
Newegg has something of useful value (like a hard drive). Both BTC and USD have no useful value in this sense. The actual item 1 USD is simply a piece of cotton-paper with ink on it. A BTC is a mathematical hash. Nobody major with useful objects accepts BTCs. They accept USDs.
I would think that most people trading Bitcoins are just trading it. The price goes up and up because everyone is just buying and buying so they can sell before it goes back down. At some point, enough people are going to randomly decide they're done and sell at the same time, and the transfer price will go all the way to (near) zero. I haven't seen many people actively trying to make a real economy out of it. That's why I have no confidence in Bitcoin.
[+] [-] bitspend|15 years ago|reply
[+] [-] nazgulnarsil|15 years ago|reply
the value is determined by average investor time window and whether or not the network is growing slower or faster than a certain rate determined by that time window.
people buy gold with the intention of later selling it to someone who also wants to buy it so they can sell it later. why does anyone bother? because there is demand for transporting value over time. gold supply is low, the investment window is long, and the number of people who wish to store value for a later date is increasing.
the investment window for bitcoin is unknown.
[+] [-] drhodes|15 years ago|reply
[+] [-] bitspend|15 years ago|reply
[+] [-] jrockway|15 years ago|reply
[+] [-] mmaunder|15 years ago|reply
When the IRS throws their hat into the ring it's going to get serious, both in terms of positive PR for bitcoin and risk. That will happen once there's a full service economy in the currency i.e. ability to reliably: earn, spend, exchange, borrow, lend and save. 99% of this activity will be off the IRS radar and thus will be off their books.
[+] [-] veb|15 years ago|reply
I agree with you though, the whole Bitcoin thing is getting very interesting.
P.S. would the down-voters explain? It's not like I know everything about tax law, I was simply asking a question. :)
[+] [-] esw|15 years ago|reply
[+] [-] webXL|15 years ago|reply
[+] [-] bitspend|15 years ago|reply
[+] [-] ineedtosleep|15 years ago|reply
Note that I didn't check the Newegg BTC prices. I'm only applying what I've seen so far and expecting nothing different from bitspend/Newegg.
[+] [-] simplestuff|15 years ago|reply
I just wish they also did clothes, books, maybe amazon.com or something.
[+] [-] jnburham|15 years ago|reply
[+] [-] simplestuff|15 years ago|reply
[+] [-] GigabyteCoin|15 years ago|reply
[+] [-] DiabloD3|15 years ago|reply
[+] [-] bitspend|15 years ago|reply
[+] [-] unknown|15 years ago|reply
[deleted]
[+] [-] dimitrip|15 years ago|reply
[+] [-] adrianwaj|15 years ago|reply
- make bitspend a place for users to buy bitcoins
- make bitspend a place for users to cash out bitcoins
- build a reputation and move into ebay and amazon payments (can you become some type of power buyer or affiliate)
- collect testimonials
- provide a bookmarklet or plugin so users can browse the shopping sites transparently but pay on bitspend
- a person could have an item they want to buy for say $30, instead of paying with bitcoins, they pay $100, and then get $70 change in bitcoins
[+] [-] lallysingh|15 years ago|reply
[+] [-] baconface|15 years ago|reply
[+] [-] jes5199|15 years ago|reply
[+] [-] regularfry|15 years ago|reply
[+] [-] orangecat|15 years ago|reply
I'd drop at least one "really"; you just need a decent AMD GPU. The relatively wimpy one in my iMac can generate 0.1 BTC/day, which at current exchange rates is a few dollars. It would be easy to do 5x better than that with a PC tower, without going nuts with a dedicated mining rig.
[+] [-] kelvie|15 years ago|reply
The site's still in beta, though, but the devs hang out (and are responsive!) in the Canadian bitcoin irc channel, #bitcoin-cad on freenode.
[+] [-] unknown|15 years ago|reply
[deleted]
[+] [-] phamilton|15 years ago|reply
[+] [-] bitspend|15 years ago|reply
[+] [-] briandear|15 years ago|reply
[+] [-] tdignan|15 years ago|reply
[+] [-] unknown|15 years ago|reply
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