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Buy Newegg gear using Bitcoin (bitspend.com)
106 points by randall 1423 days ago | 69 comments



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.

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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.

Assuming, of course, that trends continue.

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It's not a free lunch. They can sell the bitcoins on the market if they need USD.

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Only so long as the market doesn't crash.

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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.

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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.

(Relevant internet meme: honey badger.)

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They apparently care about a missing hockey puck.

"[The] FBI's Regional Crimes Task Force in Chicago reviewed the Chicago police sergeant's video and determined with "100-percent certainty" that Miller picked up the puck."

http://sports.espn.go.com/chicago/nhl/news/story?id=6452071

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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.

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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.

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I would imagine there is more to accepting international orders (and shipping there) than simply 'using non-US credit cards'. Things like tariffs, export restrictions, taxes (both source and destination company), international corporate status, fraud, etc.

In light this, I find bitcoin espoused as 'opening up new markets' a bit of an odd statement.

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For individual orders by the end user, there really isn't that much more. Most of the additional costs such as import duties are typically the responsibility of the receiver.

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You should also make something similar for dealextreme, you even will not have to handle shipping, they ship to all countries, but they accept only paypal, and there are countries where paypal doesn't work.

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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.

the investment window for bitcoin is unknown.

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found related link from last bitcoin discussion http://en.wikipedia.org/wiki/Rai_stones

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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...

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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.

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"Volatility is not a real big issue because we can quickly move bitcoin into USD."

This is true today I guess. When everyone is trying to sell bitcoins it might not be so easy.

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I wouldn't be so sure about that. The Bitcoin market is even less liquid than emerging market currencies. If there's a rush for the exit, there might not be enough buyers to allow a quick bitcoin->hard currency conversion.

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>Volatility is not a real big issue because we can quickly move bitcoin into USD.

... thanks to speculation.

If the market adjusts and people start heading for the exits, bitcoin will become highly illiquid.

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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?

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https://bitoption.org/

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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.

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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. :)

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No matter how you get paid, the IRS wants the same share of fair market value: http://www.irs.gov/taxtopics/tc420.html. I can't think of a reason they'd treat bitcoin differently than foreign money.

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Because BTC is wothless. Or rather that is what you could try to claim. If I mine a bunch of BTC and then pay you with it, I have not assigned any value to it. And if you never convert it to USD, you do not assign value to it either. When you fill out your tax forms, what would you put for its value? Moreover the IRS has no standard way to measure it. They cannot use Mt Gox any more than they can use Craig's list. The BTC is way too small and fluctuates too much to be accurately measured unless USD is involved somewhere.

I am not a lawyer or a CPA and the above is just a theory, not advice.

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If I give you 1 bitcoin and you give me a donut, we've agreed that 1 bitcoin is worth a donut.

(it is similar to the situation with barter, in the U.S. it is taxable and the IRS will expect you to put a dollar value on the income and be able to defend the valuations you use)

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Huh, I did not know that. http://en.wikipedia.org/wiki/Barter#Tax_implications.

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I believe that is why coupons say they are worth $0.0001

Guy wins free donuts and is issued a $237 tax bill.

http://sports.yahoo.com/mlb/blog/big_league_stew/post/Astros...

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It could be worse than a regular barter transaction, because the IRS could be looking for capital gains on your bitcoins as well.

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If you aren't sure, you can ask the IRS.

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* My line of thought was perhaps there's something written where it states that only the official currency is taxed.*

That's true, but all those Bitcoins are getting converted into dollars/euro/yen/etc. at some point, so that's when the IRS (or tax agency) collects its due.

Its like stocks. You pay capital gains taxes on stock when you cash them out dollars. I'd expect you would have to pay some sort of tax when you cash your Bitcoin out for dollars too.

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Ah, thanks for clearing that up. Didn't think about that side of it. :)

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You pay taxes on value earned in USD. You could have been paid in ice or bitcoin but it's your job to pay the government in USD.

PS: The IRS has made an exception for currency's earned in games unless real world goods exchange hands.

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Really, bitcoin isn't even a consideration until I can pay my bills with it.

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Considering how much people are charging in BTC for goods and services currently and the difficulty of earning BTC, I'd rather spend real currency.

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.

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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.

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You can use BTCBuy to buy amazon gift cards with bitcoin, just redeem the code on your amazon.com account, and you can buy it whatever you like.

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BTCBuy won't ship to me though. Amazon only ships a very small number of products to Peru. Electronics and clothes not included.

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BTCbuy also does newegg cards too: http://www.btcbuy.info

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You can use a package forwarding service to get shipping to Peru (or any other country) from US stores that don't ship outside the US. You can get a US address, order from Newegg (or any store you want) and forward your items to your country. See http://www.opas.com/how-it-works.php

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Why wouldn't this work for any store or currency? Or is this just a creative way to go long on bitcoin?

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Exactly right. We may add more currencies in the future and additional stores asap. Suggestions appreciated :)

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in addition of you adding more stores. why dont you create a pay pal button type thing that allows developers to accept bitcoins.

click HERE to buy in dollars. and HERE to buy in bitcoins

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This is unrelated, but why are some people's usernames green?

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New/low karma accounts.

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Hah, I get it, it's because they're green. Good one, and thanks for the explanation.

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MtGox offers this but competition is always good.

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How do we know it's not a scam?

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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).

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How does any skeptical person know that it's not a scam? Give it time and see if/that other people use it successfully.

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Interesting, but is he willing to cover lost items or shipping to insane countries?

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Actually insurance may be a option in the very near future. We are working on adding many new features!

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ideas:

- 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

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You've gotta be real careful: http://en.wikipedia.org/wiki/E-gold#Crime_and_fraud

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From a purely economic standpoint, is it always in someone's interest to be fraudulent? You might get away with $x if fraudulent and 3 x $x if not. If you're selling rice and cookies at a supermarket and a mafia boss wants to buy them, what are you going to do, turn him away?

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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?

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Seems like another good technique for mining bitcoins.

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It's still really, really hard to obtain bitcoins. And until that changes, what good does it do to be able to spend them?

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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.

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It's taken me the better part of a week to fund a MtGox account. 10 minutes to send bitcoin around the world. 5 days to complete a damn USD money transfer.

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Urgh. In which case, you have my sympathies. It certainly wasn't that much of a hassle for me. Stick with it, I could certainly believe that MtGox is under a certain amount of strain right now.

That being said, they aren't the only option: other exchanges are cropping up, and bitcoin-otc is also available.

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It's not hard, but it is very slow: create MtGox account; create Dwolla account; add your traditional checking account to Dwolla; initiate a xfer from checking -> Dwolla; wait (days) for xfer to complete; initiate Dwolla -> MtGox xfer (wait days); buy bitcoins with USD funds on MtGox.

I started that process purely for the fun of some small-time speculation, but the whole hassle of the process made me realize why Bitcoin is important.

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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.

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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.

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I wonder if they have to charge sales tax... (located in CA)

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No sales tax. We're located in Utah :)

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Good to know there are other Utahns using bitcoin than just me :D

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Good question.. i don't know either.. But looking at the green users, it seems that green means "new user"? They were created in the last hours...

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Yet another Bitcoin story. How nice.

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