Amazon is jumping the gun this year by already starting their “Black Friday” sales five days early. Although Amazon does not accept bitcoin, using bitcoin for these purchases can drop an additional 10 to 25% off of some of the best prices on the Internet. If there ever was a time and place to spend your bitcoin – this might be it. As Amazon is the biggest on-line retailer, using your bitcoin for purchases might send the message that bitcoin is here to stay. Perhaps proof of this fact may finally drag them kicking and screaming into the future.
New bitcoin broker and escrow services allow you to spend your bitcoin in an effort to gain significant discount over the Black Friday deals. Simply using bitcoin in this unique transaction model might allow you the additional funds to purchase many more Holiday gifts this year.
Prerequisites, what you need to begin:
- An account with Amazon.com. Preferably with Amazon Prime, which offers free shipping for all items marked as “prime”. This allows the transaction to complete much quicker for all parties.
- Bitcoin to spend, preferably with a quick way to replenish the bitcoin you’ve just spent. If you are a US resident, an account with circle.com will allow you to transfer money from your regular bank account to circle.com and have it converted to bitcoin instantaneously for free. Other bitcoin exchanges such as Coinbase may charge a 1% fee for the purchase and it may take a few days depending on your account options.
- An account on Purse.io or Brawker.com bitcoin escrow/broker service that will make the arrangements to sell your bitcoin at a profit for you that is exchanged for the purchase. Note: Brawker.com has the advantage of using Multisig wallets.
How to get your discount:
- Go shopping on Amazon.com. For each item you select for purchase, rather than “add to cart”, simply choose the option next to it: “add to wish list”.
- Once you’re done – give your wish list a name using the Amazon’s Wish List function. Once you see how cool it is, you may decide to do this again and it might be helpful to keep them straight.
- Copy the URL from Amazon’s website and paste it into the discount bitcoin broker of your choice.
- Decide on how much of a discount you are going to ask for. 10% – 25% This will be the same amount of premium somebody will pay for your bitcoin over the spot price you paid to the bitcoin broker site. Generally the lower the discount you want, the faster you will see offers come in for it to be purchased. At around 10% you’ll be competitive with localized bitcoin ATM machines and it should go very quickly.
- They will put the wish list ‘package’ up for sale for people with credit cards willing to pay for your purchases and receive your bitcoin in return. This money is held in escrow at the brokerage sites until both parties have agreed the transaction was successfully concluded.
- You can choose to accept the offers to purchase your wish-list. Once the offer is accepted, the buyer has a short window of time to use the Amazon link you’ve provided to pay for you’re the items on your list.
- Both the buyer and seller are encouraged to leave feedback for the other for a reputation system to develop. There is a messaging system inside these systems and it’s important to communicate to avoid misunderstandings and coordinate if there is a delay in shipping or other complications that happen in life from time to time.
Why a buyer would want your bitcoin for 10-25% over market price?
- This method allows bitcoin purchases without having to have a bank account to send expensive wire transfers. Paying the 10-25% premium can be easier and quicker in parts of the world that discourage or forbid the purchase of bitcoin.
- Some people without bank accounts do online work and can be paid in Amazon credits. This service allows them to expend those credits and transfer the value into bitcoin. If they wish, they can then take the bitcoin to their local exchange for their national currency.
Why would you want to spend your bitcoin?
- Obviously a discount is money saved and speaks for itself.
- This benefits Bitcoiners because it spreads the bitcoin out to more population. The more users of bitcoin the better and more valuable it becomes. This demonstrates to merchants that investment into bitcoin payment processing is a worthwhile investment.
- The point some Bitcoiners miss when they consider actually spending their precious bitcoins is they aren’t out anything. If they spend $100 worth of bitcoin, then buy more right after they’ve spent it, their net difference is nothing. Bitcoin just became the conduit for the payment.
What could go wrong? Why it’s probably not for everyone.
- This is still a relatively new concept. Reputations are still being created; it’s possible that a buyer or seller may be slow finishing their part of the process.
- It’s important to use the reputation system that develops as the market matures. Perhaps consider allowing smaller purchases for less established bitcoin buyers.
- Amazon’s wish-list includes the name and city of the shopper, although there are re-mailing services that can be used to keep your location private.
- The bitcoin buyer will see all the items on your list; ask yourself if you are okay with that.
It’s possibly a win-win-win-win-win situation.
- Amazon sales increase
- You get a significant discount on already heavily discounted items
- The buyer gets the bitcoin they want
- The bitcoin broker establishes a new business model
- The entire Bitcoin community benefits from increased exposure and possible price increase
Author’s note: Neither the author nor Bitcoin Magazine is advocating the use of any of these services; this should be considered an information piece for a new bitcoin business model only. Brawker also allows use with other retailers; see their website for details.