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How Not to Sell Bitcoin on eBay for 300% Profit

whatilearnedtoday.jameslarisch.com

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Re: How Not to Sell Bitcoin on eBay for 300% Profit

#31

Post by JumpCrisscross »

Venue (space) arbitrage in illiquid, disconnected markets necessitates holding collateral at each venue. In this case, it means holding USD and BTC at both Coinbase and MtGox (presuming you don't know, in advance, which way the arbitrage will open up). If one can fund accounts instantly USD and BTC can be held in outside accounts, waiting. When opportunity arises one simultaneously sells in one location and buys in the other. Aggregate USD held to BTC held doesn't change, but quantities held slowly appreciate.

A challenge with a volatile pair like BTC-USD is keeping the portfolio delta hedged, i.e. neutral with regards to movements in BTC-USD. Without the ability to even borrow BTC effectively this becomes difficult to do cost-effectively. That said, a volatile pair in a fragmented market allows for market making sans leverage.

Taking a space arbitrage, as the author presented, and executing it as a space-time trade, as the author presented (buying in one place, waiting, selling in another), is not arbitrage.

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#32

Post by smartwater »

mangotree wrote: post #21

So, can't you remove the money straight away, then close the account? Sounds like this should be doable.

PayPal will take the money right out of your bank account. If that doesn't work, they send you to collections and your credit score takes a dive.

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#33

Post by cheeyoonlee »

I've learned in the past the only way to prevent and win 100% of Paypal disputes as a seller is to actually send something physical to the buyer's verified address. Besides, it's against eBay policy to sell digitally (delivering by email). You can print out a physical address for the BTC amount you're selling and send it by snail mail in addition to emailing. At least then, you'd have physical proof of shipment and confirmation of delivery. Obviously at this stage, I'm assuming those scammers wouldn't bother purchasing, but everyone should keep this in mind when selling digital/virtual items.

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#34

Post by downandout »

By placing a ban on virtual currency transactions in their own fine print, but allowing most of the transactions to go through unless and until there is a problem, PayPal is setting themselves up for issues. In this case, only the author of the article was victimized, but it would be almost as easy to victimize PayPal/eBay itself even if the supply of legitimate Bitcoin sellers on eBay dried up.

One person could easily act as buyer and seller. Seller receives payment and withdraws it to a virtual bank account attached to a random prepaid credit card that can be bought at any store with cash, then "buyer" (the same person operating a different account) contacts PayPal and claims they never received it from the evil seller. PayPal must reverse the transaction and eat the loss because it was against their policies for the transaction to ever have taken place. There is some work involved, but even just one $300 transaction per day is certainly plenty of money for alot of the kinds of people that would do this.

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#35

Post by danneu »

STRML wrote: post #7

This is the most classic bitcoin scam - buy with paypal, then claim you didn't receive the item. The seller has no way of proving that you did, and Paypal will rule on the buyer's side every single time. This is why trading channels like #bitcoinotc discourage any use of paypal - but for times where you have to use it, there's the trust system.

Gee, if it's really so foolproof then all of these comments (and OP's lamentation) seem to be missing the point.

Clearly there is a free lunch, and it's buying Bitcoin on Ebay.

http://www.ebay.com/sch/i.html?_nkw=bitcoin

Look at all that free money.

I mean, for the small price of feeling like a twat, a small transaction fee, and locking up a couple hundred bucks for a month... you get a Bitcoin. So why aren't these listings being sponged up by a few people that don't mind the twat factor?

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#37

Post by robryan »

This doesn't surprise me at all. Even with physical goods sometimes the kind of proof they want us to send we don't have access to or sometimes doesn't exist.

It is not enough just to show them some online tracking which shows that the item arrived (even in some cases if it has a signature verification attached).

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#38

Post by slapshot »

downandout wrote: post #34

By placing a ban on virtual currency transactions in their own fine print, but allowing most of the transactions to go through unless and until there is a problem, PayPal is setting themselves up for issues. In this case, only the author of the article was victimized, but it would be almost as easy to victimize PayPal/eBay itself even if the supply of legitimate Bitcoin sellers on eBay dried up. One person could easi…

> PayPal must reverse the transaction and eat the loss because it was against their policies for the transaction to ever have taken place

It's far from clear that PayPal must reverse forbidden transactions. In fact, the behavior seems to be "PayPal can do whatever it chooses with forbidden transactions." In computer science terms, the result of submitting a forbidden transaction is undefined: it might go through, it might not go through or something entirely unexpected (party van?) may occur.

Given the number of people who try to scam PayPal every day (it's a huge and visible target, to the extent that a security company basically spun out of PayPal), I'd be very surprised if this hadn't been tried already.

Re: How Not to Sell Bitcoin on eBay for 300% Profit

#40

Post by lnanek2 »

downandout wrote: post #34

By placing a ban on virtual currency transactions in their own fine print, but allowing most of the transactions to go through unless and until there is a problem, PayPal is setting themselves up for issues. In this case, only the author of the article was victimized, but it would be almost as easy to victimize PayPal/eBay itself even if the supply of legitimate Bitcoin sellers on eBay dried up. One person could easi…

PayPal is infamous for freezing accounts indefinitely and even putting accounts into the negatives even on people who did nothing wrong. That scheme is not going to work. They are so intent on nuking any fishy business they nuke a ton of innocents as well.
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