Isokivi



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A closed bitcoin economy, are we there yet ? August 26, 2013, 05:31:59 AM

Last edit: August 26, 2013, 10:18:36 AM by Isokivi #1 I run a small bitcoin venture, in essence it's an e-commerce selling bitcoin niche items. Almost a year in the game and the business landscape is starting to show very strong sings that I could soon be able to operate entirely outside the fiat economy. Geographic location plays a major role in how far one can take this, I am lucky to live in the nation with the highest bitcoin penetration in the world, Finland. I would like to argue that many larger nations are by far more ahead of the curve. The US, Canada and Germany do clearly have a vastly larger amount and diversity in services and goods available for bitcoin directly. This obviously is due to their larger size, which directly translates in to a larger customerbase.



Here is a list of the goods and services I need and use so far, some are ofcourse restricted by location, while others I can purchase from where-ever in the world:



Web hosting, was the first service my business purchased with bitcoin. I found bitronic technologies early on and have stuck with them ever since.



Image design and fabrication. Note that this can and has been synonymous for product desing for me. I've used beefsock's services, found here on bitcointalk, a couple of times and have been satisfied. My logo and the pvc keychain I produced are he's desingns based on my descriptions.



Shipping, to be more specific: Stamps, I ofcourse need to use finnish stamps so the selection of providers to work with is severely limited. However reaalimarket.fi, a finnish online-store, does accept bitcoin and do carry stamps. The price is slightly higher than it would be at any kiosk or store, but when bought in large enough quantities the time I save by getting them delivered instead going out and buying them myself, justifies the added expense. I need to purchase about a months supply at a time, in order to only pay 1% more. Free business idea: if there is not a service selling local stamps in your region for bitcoin, look in to it, on itself it's propably not a viable business, but surely could be a profitable service when added to an existing business.



Envelopes and other office supplies. Reaalimarket does carry a couple of different envelopes and a variety of office supplies, that cater to my needs rather poorly, they would propably be willing to add more suitable ones if I'd ask for them. But as the price of their current items is relatively high when compared to the ones available in the fiat-economy allready (+60%), I doubt I would actually end up purchasing from them anyways.



Payment gateway services, while I do want to keep my funds in bitcoin when not elswhere needed I do need to price my goods in a fiat currency, so I need someone to calculate the exchange rate and provide a customer with the payment address and/or Qr-code. Providing customers with recieps is an added benefit. Several options are available for me, I've worked with three different providers to date and have settled with one for now. I am anticipating that competition over fees will emerge soon.



Computer hardware, not that I need much, but when I do I can find it available for btc. Most recently I purchased a couple of harddrives from bitcoinstore.com, since then a couple of european competitors have emerged, which is good because of the 24% vat when purchasing from outside the Eu is more or less a dealbreaker.



Marketing, a vast variety of bitcoin ad networtks do exist, but show little promise. The person getting paid .0000001 btc for clicking a link or watching a video just does not make much of a customer. Buying traffic would be easy, but pointless. There are also a good amount of listings about vendors accepting bitcoin. By far the most comprehensive still seems to be the original bitcoin wiki one. I do hope someone gets this concept right, sadly I do not have any ideas or pointers on how this will be achieved to dish out.



When I first started out I had moderate succes with providing revards for a mining competition on the bitminter pool. The mining community overall does seem like a solid and fruitful starting point for marketing.



I have aso talked about an affiliate deal where the linker would get a persentage of sales coming trough their link, but have atleast for now opted against it.



[edit] I did also approach bitcoin magazine via email to query what an advertisement in their publishment would cost me, sadly they never responded. They have however published some mentions of my venture in their online content.



Accounting I have been approached by a finnish accounting service that would of have been available to provide the service I need for bitcoin, I chose againts it for now, mainly because my venture is small enough for me to handle it myself with ease. However I am starting to lean toards going with them next year, depending on how the last quarter of this fiscal year goes for me.





What I cannot currently purchase with bitcoin directly, various proxy-services do however allow me to purchase most:



An internet connection, no ISP here takes bitcoin directly and I cant remember seeing any mention of one that did anywhere in the world, correct me if I am wrong.



Cell phone service. Do note that I would not be interested in a prepaid service, I'd just like to see a bitcoin option in my bill.



Taxes, cannot be paid in bitcoin.



The three above ones I can however pay with bitcoin by using a proxy service, bittimania.fi has a service where they pay any finnish bill, up to 500 whatever amount for you in exchange for bitcoin for ~1.5% fees. I have not used there service yet, but do believe that I will be using it. However I do consider proxy services like this a temporary thing. Within a few short years I anticipate that I can pay atleast an isp and a cell phone service provider directly in bitcoin. Taxes however seem to be far far away in the distant future, I am somewhat reserved about using a proxy service to pay taxes, while technicly entirely possible: how dodgy would it appear when another unrelated company pays my taxes ?



Goods, I have been approached by three manufacturers who have offered their vares for bitcoin. One of them, bkeychain, I found suitable and we struck a deal and I am at current their Eu reseller. The majority of my goods is still sadly paid for in more traditional currencies, I have talked to my main manifacturer about bitcoin, but have decided agains pushing the issue, I myself dont respond well to pressure and feel confident that they will eventually get there. While obviously constantly remaining at risk of losing my business to someone that does accept bitcoin.