In this issue:  Do you want to deal bitcoin for fun and profit?
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Out of Bitcoin...  For Now!  But give me a day or two...

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Exit The Matrix

Maybe you have a job, and that's how you get money, and that money takes care of everything else.  Most people have a standing agreement with an existing business to trade labor for money.  This is great, but it really degrades our natural tendency to watch for opportunities and take them when we see a good one.  I'd like to help you turn that around with Bitcoin.

If this newsletter intrigues you, please visit the archives link at the bottom before you start dealing bitcoin.  I have gone over a lot stuff in past newsletters about how to protect yourself from scammers.  Every time one of them is successful, it just encourages them to do it more, and that's bad for everyone, including the scammer.

Start Dealing Bitcoin

You need something, but it could just be $10, or it could be some bitcoin.  Maybe you have both.  Here's the simple setup that I recommend:

Create an ad on LocalBitcoins to buy (or sell - or both) bitcoins locally.  Enter a price equation that sets your price just a tad in your favor.  If you have bitcoin and cash, you can create both a buy and and a sell ad.  LBC takes one percent from any trade that goes through them (from each side, so they really get 2%, but each of you pays half of it), so be sure to factor that in. 

Protect Yourself From Scammers

LBC allows you to set a maximum.  I recommend that you decide how much it's worth to you to learn about a scam in order to avoid it.  Make that your maximum.  In this way, you prepare for the possibility that when your ad gets answered, the other party will scam you out of your bitcoins or fiat, but you'll learn how to protect yourself. Scammers like to work on newbies, so there's a chance that your first trading partner will be one.

Turn Your First Successful Trade Around

If you deal with an honest person, as is usually the case, you make some profit.  If your ad was to buy, you can now put one up to sell, and if your ad was to sell, now you can put up an ad to buy.  Again, set the price to something slightly in your favor. 

If you just bought bitcoin, there's a chance the price will drop alot before you can sell it.  You can use the min() or max() function in your pricing equation to avoid advertising a price that leaves you with less than you started with (that is, "realziing a loss").  If you enter max(localbitcoins_sell_usd*1.030,600) for a sell ad, this would prevent the price from ever going below 600.  Of course, you might not get any trades, but that means you get to keep the bitcoin.  The same logic applies for buying bitcoins back, but you'd use min() (and localbitcoins_buy_usd)  instead of max().

Go Easy on Yourself

The ad form on LBC has "Contact Hours" which you can set so that people know when they can expect you to answer.  You can also disable all the ads you use to sell (or buy, or both) by visiting your profile (click your username in the upper right corner, and then "Edit Profile").  Only leave them on if you'll be checking often enough to avoid appearing unresponsive (you'll get emails from LBC whenever someone answers your ad).  Frequent traders will learn to skip you if they make requests that you don't answer quickly.

If you set your ads up well and you are responsive to any trade requests, you will get many honest trades, and you'll be building a network of bitcoiners around you.

If you've had some ads up for a while and got no hits, play around with the settings.  Try a price customers might like more.  Don't raise your max - that is a protective setting - until getting scammed is a lesson for which you're willing to pay even more. 

Why Do I Encourage Competitors?

If there is enough competition out there to make a significant dent in my bitcoin dealings, then the world will be a much better place.  That is my goal.  The profit is just enabling me to pursue it more vigorously than if I were still writing code for a living.

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Copyright © 2014 dscotese on LocalBitcoins, All rights reserved.

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