This is a common question from new and uneducated bitcoin buyers that join website like Paxful.com and Localbitcoins.com. Those bitcoin buyers don’t want to give up their private information or wait days to receive BTC from exchanges like Coinbase. They also don’t want to pay for the service, convenience and speed professional bitcoin traders offer.
Some of these buyers are simply uneducated and once explained to them they understand. To them we offer the explanation below.
Others do not care about the value, privacy, speed and service that is offered by a professional bitcoin seller. They want Coinbase prices while demanding personal service/speed (these whiners are also known as spackers), These spackers will complain and make excuses no matter what. There is really very little difference in their behavior and a scammers behavior (both whine and complain about everything, trying to throw you off).
I suggest anyone curious about high bitcoin prices do a few things that will help them better understand the pricing structure of buying online.
- Deal with finding a regular bitcoin supply and scrambling to meet the demand of regular clients.
- Put your time into meeting/buying/selling/transferring the bitcoin
- Pay the fees that the different websites charge for transfers and sales
- Pay the fees that come with taking certain payment methods or turning that back into bitcoin
- Suffer through the price volatility and losses when you buy at one price and an hour later the market drops $30 per bitcoin
- Deal with the uneducated people that start trades and waste time by not reading advertisements, trade requirements, asking foolish questions, whining about prices, demanding they be allowed to pay less or with a different method than the ad they just agreed to states
- Risk losing hundreds or even thousands of dollars because there is often no difference in the behavior of a mentally handicapped buyer who doesn’t know what they are doing and the behavior of a scammer that is trying to steal from you.
- Accept the losses from scammers because no matter how careful you are, you will eventually gets scammed. Even the best sellers get scammed, especially with Paypal.
- Deal with having bank/checking/wire service/reload card/paypal accounts shut down and having to find new ways to accept payment
Before you complain consider how much money you would need to make on each trade to deal with all that. Most would agree $5.00/10% on a $50 trade isn’t worth all that trouble.
If you a user that has done all of the above please leave a comment and let us know if you would waste your time with a spacker who thinks a higher mark up is unreasonable.
3 thoughts on “Why is Bitcoin so expensive?”
My first trade was with btcbank. Was the best deal for PayPal at the moment. Considering all options, risk factors, and means of payment for me that day, I felt the transaction and markups were more than fair. Had I used Western Union the fees and bank cash fees for purchasing what i was buying on cc would have been comparable. It was also much easier than WU. Now, since that transaction, 2 other attempts failed. My nickname is on everything but my driver license. The transaction descriptions didn’t show that as being a problem but since they didn’t know me wanted to cancel. That was fine with me also. I completely understand as Ive been scammed on internet purchases in past. Considering the nature of this bitcoin business, as I am quickly learning, both sellers and buyers should be overly cautious. Perhaps in time with wider acceptance things will get better. In 2016 I read that a bank, funded primarily by donations from future stockholders, will open online. That should be a huge step further legitimizing the bitcoin currency in the eyes of the public.
If it was so easy to get the coins at market then there would be no need for these sites. As mentioned by BankBTC I had to spend months opening low limit accounts will full verification required on numerous sites, have id after id rejected, waited 3 to 6 months to actually buy, send, sell more then #300 only to then be banned because I was so evil and transferred money to localbitcoins.com. Plus one of the main reasons is obvious and the more you want to stay anonymous the more you are going to pay in premiums. I’m myself just trying to both invest in regular markets as well as here and local but for the later you always have to factor risk. If you buy a junk bond that has a 1 in 3 chance of defaulting you are of course going to want a HIGH premium. That being said there are types that I don’t believe should be as high as they usually are such as cash by mail, Direct Cash Deposit, Direct Wire and ServeToServe. Just keep in mind the time and aggravations that went into getting those coins for you to buy.
I’ll give some free advice, just as you would any other investments diversify your BTC ones. I keep a certain percentage as long term and safe and on a paper wallet, some for Paxful, a percentage for binary options, some for being a lender on a peer to peer loan site, a few as a margin giver on trading sites and try to always have at least 2TB for sale on BitQuick.co at a rate of like 8 to 10% depending on the market. They handle all the receipts and KYC from the buyers so you just fund and let the money come in. If you mix your coins between things you lower your risk. If I had time I would mostly just trade on the exchanges and probably kill it but for now I have another job so that’s not likely. I might even have an announcement very soon for an BTC ETF being available then you wouldn’t have to worry about the allocations.