If you're a vendor you've probably been there. You've accepted a couple of orders, the bitcoins are held in escrow. Meanwhile, the bitcoin price drops and drops.
I just saw blueviking close his shop because of bitcoin price volatility. It doesn't have to be like this.
This is what you do to eliminate the effect of bitcoin price drops on your money stuck in escrow.
- Open an account on a bitcoin exchange which doesn't need ID verification (btc-e, bitfinex, kraken, okcoin, houbi) and send it some bitcoins.
- When an order comes in, sell the same amount of bitcoins on the exchange to get USD.
- When the escrow is released, use the USD to buy bitcoins at the current price.
Every couple of days or weeks, transfer bitcoins in and out of the exchange (aka rebalance) and sell them for normal currency in localbitcoins or whatever you normally do.
Upside: No more currency risk. No more worrying. Your business is selling drugs, not daytrading the bitcoin markets.
Downside: Have to have a reserve of bitcoins on exchanges equal to all your orders, the exchanges might charge about 0.2% per trade, you have to pay the bid-ask spread each trade (which is roughly another 0.2%) But I think this is worth it, in this recent big price drop I've heard of vendors losing thousands of dollars.
You can do this on almost any exchange except for bitstamp. Since you're just transferring in and out bitcoins not USD, you don't need to verify. That includes bitfinex and btc-e, the second and third largest USD exchanges. Plus tons of others. I bet loads of you vendors use fake ids anyway.
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