Bitcoin plus the sharing economy is going to change everything.
I’m two years out of college and intern as a developer at a big NYC finance company. I have a bank account, digital wallet account, two debit cards, little to no credit and zero savings. I also have a fat college debt which I estimate will take me about ten to twenty years to pay off. That all changed when I got an email from an old friend.
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I got an invite to join a website called Paxful from my friend Lee, who used to live in LA but now lives in Korea. He casually mentioned he was making about $10,000 a month trading bitcoin. I asked him “how” and the ride began.
What AirBnB and Uber showed us how to do with space and distance we can do with our money and financial tools like bank accounts and digital wallets. By the end of the year with how the volume is growing and how my cash buffer is growing I expect to crack six figures in profit AND pay off my college debt. Not bad for a side gig. I love the sharing economy and bitcoin is my new obsession.
I’m learning how to code but I’m no numbers whiz or trading prodigy, I can barely read a chart to save my life but this isn’t about that, it’s more a people thing with basic arithmetic and it’s a lot of fun. Paying off your college debt and being able to buy a beer for your buddies anytime is a big plus.
A typical day selling bitcoin
My bank cash deposit offer is on and the “Coins are in stock”, meaning I have enough bitcoin in my Paxful wallet to cover the maximum range of my trades, right now $2000. Buyers find my offer by browsing and searching on Paxful. I also shared my offer link on my college finance club pages, Facebook posts and Twitter.
Potential buyers looking over my offer will start a trade if there is a nearby bank. They then deposit the cash, upload a pic of their receipt and mark the trade as paid. If they need some help I walk them through via the live chat on the Paxful trade page. After I check my online banking that they deposited their cash which is almost instant I release bitcoins to them. It takes me about 10 minutes to do this on my phone after I get an SMS alert from Paxful. They get their bitcoins under an hour from the moment they started the trade and I just earned profit anywhere from 7-20%.
At first I did this every week because I didn’t have a fast low-cost way to buy bitcoins myself except through the “normal” exchanges like Bitstamp and Circle. Then Lee told me “Why don’t you buy from another Pro Trader in NYC? Must be a lot selling in bulk for low rates” DOH!
Now that I have several traders on Paxful that I buy bitcoins from at 2.5% to 5% margins I can trade every day. As the cash buffer builds I don’t have to buy back so often and can sell longer. Six figures in profit is very possible. It’s awesome. Note: I’m not a “money” guy and usually hate talking about money but when you’re barely making it and struggling to pay off debt and you see a way to change everything for the better the word profit isn’t a dirty word anymore.
The escrow system gives the buyer confidence that bitcoins are there. The reputation system gives buyers confidence that the seller won’t just run off with your money. It’s a lot like eBay for trading bitcoin, more of a marketplace than an exchange because you trade with other people directly.
There is a ton of room for experimentation and figuring out new “trade routes”. Lee explained how he now makes money whenever he has to move money back to his American bank account. He was using another peer to peer market and now we both trade on Paxful and are trying new things and sharing notes. Lee’s one of the top bitcoin traders in Korea and is making well over six figures in profit a year for a few hours a week of work all of it online trading bitcoin.
Once I saw how real this all was I started telling my friends how they could do it too. Most ignored it but the ones who tried it were hooked. I’ve had to explain the entire process so many times to curious friends that I decided to write a walkthrough to guide a newbie trader from start to finish.
1. Buying your first bitcoins
If you already have some bitcoin then you can start selling it right away with your first sell offer. If not then you should seek out a seller with a good rate who can give you some bitcoins. The less you pay the more you earn when you sell. It’s good to go through this process yourself because this is what buyers will be going through. Know your customer!
For your first trade I suggest bank deposit with a low premium. Click on the payment method of a bank closest to you. It is on the left hand side of the buy page. For example I selected bank cash deposit. A bunch of offers will come up. Pick the one with the lowest price. If you want to get an idea of how much they are charging over market price compare their price to the prices on bitcoinwisdom.com Note: Look for the Coins in stock icon, if it is there it means he has the bitcoins waiting and they will go right into escrow. Make sure to look for this as you don’t want to wait the 30 minutes needed for the bitcoins to clear the network and fund the trade. Escrow protects the buyer! Paxful has automatic escrow on all trades.
Look for the sellers reputation the more + points the better. Read their Offer Terms to see if they have any special instructions you need to follow. Example: take a picture of the bank receipt with the trade id on it and send it to me. If all looks good type in how much bitcoin you want and click start trade.
The payment window is how much time you have to complete your end of the bargain, in this case depositing cash into the sellers bank account. It’s usually around 60 minutes. The seller will be in a live chat with you right on the page. If he isn’t responsive then cancel the trade. Once you’ve paid, click “Mark as Paid” and wait for him to release the bitcoins. You’ll know right away when he does it because you’ll get a very big message on the screen. Bitcoins are now in your wallet waiting to be sold for profit or sent anywhere! Congratulations!
2. Create your first offer
Time to earn your first profit. Create a SELL offer. The biggest decisions here are the payment method, payment window and the price. If you have a bank account at a bank with branches all over the country that is a good option. Just start typing your preferred payment and it should show you if it already exists, if it does then just click it, you’ll get a lot more exposure by using the pre-existing tag. If your bank isn’t already there then finish typing it out and click add.
The payment window is how long the buyer has to complete his part of the deal, in this case, deposit the funds. I usually leave it at 3 hours to give them a lot of time. Most folks want their bitcoins fast so they drive out right away and are back in less than an hour.
Next set a price. Browse the current SELL offers for your payment method and currency and compare the prices already there. Try and be between the lowest and highest but start on the higher side first. People will gladly pay for a solid and fast trader.
Range is how much bitcoin you can sell from minimum to maximum. I started with $100-$300 but now I do $1000-$2500 This is important because any buyer who wants more bitcoins or less bitcoins than your range allows won’t see your offer in a “GIVE ME THE BEST” search. It is also vital because to get the much valued “Coins in stock” icon on your offer you must have at least the maximum range worth of bitcoin in your wallet.
Click Create Offer and it will be live. You can see a list of all your offers on your dashboard.
3. Your first trade
So you made your first offer and went out to see a movie with your girl and all of a sudden you get an SMS, be sure to verify your phone, “New Incoming Trade, 1.3 BTC Bank Cash Deposit user5776” If they still have a username like user5776 it means they haven’t selected a username and are a newbie. So get to your dashboard ASAP and you’ll see it listed in Active Trades. Click it and immediately say “Hi, I’m ready to trade. How may I help you?”.
The live chat is a great feature and being responsive really helps put the buyer at ease. Answer their questions and explain the process to them. Clarify that they have a set time limit. They will see all this on screen but any help you give can put them at ease. Once they have paid for the bitcoin and clicked “Mark as paid” you will get the notice on your page. Confirm they paid, via your online banking in this case, and look over any documents you asked them to upload. If all is well then click “Release bitcoin”. BOOM! Mission accomplished. You just made some money! Don’t forget to leave them feedback!
Here are the top seven tips I can share with you to get you started.
- Verify your phone.
You’ll get SMS text messages which are pretty critical if you want to get those trades fast. People who come to Paxful are looking to buy bitcoins INSTANTLY and they might just try another trader if you don’t respond right away. I hope Paxful adds Facebook, Twitter and other social connections as it helps you build trust with the buyers.
- Be active on the site.
You want that little green dot next to your username on your offer as it means you’re currently viewing the site. You get the green dot if the last time you were active was around 9-10 minutes. On my desktop I have a lil Chrome plugin that auto-refreshes the page every 5 minutes. Not sure how to do this on my mobile… ideas? This was useful at first because I wasn’t on Paxful all the friggin’ time like I am now.
- Monitor the market
If you set your offer at a 20% premium and everyone else is doing 7% for your exact payment method and currency then you’re not gonna get any sales. If you set it to 7% and everyone else is doing 20% then you might be missing out on a few bucks. Browse around and keep taps on the market. It’s a living breathing place and the most aware make the most.
- Be chatty and alert
Newbies are super anxious and worried. Being nice and chatty really helps them calm down and makes it go much faster. Always be professional, no slang and no weird usernames. One poor lady had some ransomeware virus and came to me just as the time limit was going to end and she was going to lose all her spreadsheets with her work. She had tried all the big exchanges but they were too slow and now it said she only had an hour and twenty minutes. She was frantic but I stayed calm and walked her through the entire process. She got her bitcoins with a half hour to spare and I even helped her get her files back with a little advice on how to use the wallet.
- Repeat business
The lady who had the virus fell in love with me for the help I gave her and she would definitly come back but I hope she never has too. Being nice means repeat business. Around 30% of my buyers are now repeat buyers and this ratio is growing the more I sell. I still use the Paxful escrow because business is business but having a repeat userbase is a truly awesome thing and could turn the whole operation in a full time business.
Paxful has a steady stream of new buyers always hitting the site but you can help it along by doing your part through your social and cultural channels. I post the link to my offer on Twitter, my Facebook page, posts and even post it on other Bitcoin related Facebook pages. You’d be surprised at how well this works! I’ve even thought about hiring some SEO help to go to my Paxful profile but I don’t have any experience here so I’ll leave it to others.
- Polish up your offer
Take the time to make your “Offer terms” professional, comprehensive and clear. This is the text the buyers see right before they decide whether to accept your offer and start a trade or bail and find someone else. Put yourself in their position and show them everything they need. For example I put the link to the Bank Locator right in the offer terms and have a little step by step walkthrough and top it off with some warm and fuzzy words. It really helps and it will save you time because you can prevent people who aren’t a fit for your offer from starting a trade if it isn’t right or them.
The sharing economy has a whole new chapter now. If you don’t have a car or apartment you can rent out you can still make hellova lot of dinner money just helping people get bitcoin. I never got into mining, laughing at the idea of bitcoin when my college dormmates suggested it back in 2011, but now I feel like I’m part of a whole new Gold Rush and I get to be a part of bringing bitcoin to everyone.
Win Win Win
Buy some bitcoin from me 🙂
Notice: I am now a mod on Paxful and perhaps soon an arbitrator.