You might have heard of Bitmit before. One of the bitcoin community’s favorite legal trading posts has been online for over two years, and despite its share of uncertainty it still appears to be going strong.
Imagine an eBay that took payments exclusively in bitcoin, or a clean version of the Silk Road, and you can picture Bitmit. The Hong Kong-based marketplace even has a colorful eBay-esque logo to help newcomers feel at home.
Sellers may list their items in BTC or their preferred local currency, which is then converted to BTC at checkout. The system also lists price equivalents in a buyer’s local currency based on their registered shipping address.
There’s also the expected rating system, ID verification, options to sell via auction or a ‘buy now’ price, and a default bitcoin escrow system in which buyers must notify upon receipt of goods for the seller to receive payment.
Bitmit charges a flat fee of 1.9% for each successful sale. Unlike eBay, it does not apply the fee to shipping costs as well.
As of 28 October 2013, Bitmit has almost 14,000 items listed for sale. Perhaps reflecting bitcoin enthusiasts’ interests, the most popular categories are PC/video games, computer equipment, and money.
The ‘money’ category is interesting: as well as containing listings for novelty coins, silver coins and paper currency for collectors, it also functions as another kind of bitcoin exchange, with several listings for cash to be sent through the mail in return for BTC at competitive prices*.
By comparison Coinpost, a site sometimes mentioned as a competitor, had only 18 active listings site-wide on the same day.
Another marketplace, Bitcoinclassifieds, seemed to have activity levels closer to Bitmit’s but didn’t include category totals.
Bitcoinclassifieds lets sellers list classifieds for free but its listings are in BTC only. A warning appears if a listing gets too old. The site was “created by Maycam Media to encourage the use of bitcoins, and to create more bitcoin users.” It lists an address on the front page to accept bitcoin donations.
Bitmit almost shuts down and goes on sale
As is the case with most large scale bitcoin-related businesses in the past couple of years, however, there has been some drama.
In October 2012 a seller announced in the bitcointalk forums that Bitmit was shutting down “due to upcoming law changes.”
User ‘tosaki’, Bitmit’s mouthpiece on the forum, confirmed the news saying: “Financial supervision requires special licences for businesses which holds customer funds,” and “Sadly this is true. If someone is interested in buying the site feel free to contact us.”
The site itself was then listed for sale on Bitmit. Many users reported displeasure at the news, with reports of mostly positive experiences trading there.
Two days later, though, tosaki posted again saying: “Good news. We have figured out a solution for this problem. Bitmit is not going to be sold. Business as usual. I am sorry for the insecurity this may have caused.”
No further explanation was provided at the time, other than “problems in our data center”.
In January 2013, there was speculation Bitmit had actually been sold to a new owner without public announcement.
More recently, the site has experienced several lengthy periods of downtime (it was actually offline at the time of writing this) for ‘maintenance’. These may simply be Twitter-like growing pains, as the site always returns and new buyers and sellers appear.
There was once an official Twitter account @BitmitNet, which no longer exists. The Reddit category ‘Bitmit’ has only six posts and few subscribers, though sellers often link to listings on the BitMarket subreddit.
Despite the uncertainty and occasional hiccups, users I asked for comment on Reddit were generally positive about their Bitmit buying and selling experiences.
“I’ve sold a couple hundred digital games on Bitmit, and bought a few items as well. I highly recommend it, for both buyers and sellers. The experience has only improved over time as they add new features, and their support staff was very helpful in the few instances I needed to contact them,” said Phil_8811.
“I only have had 3 sales but I love the system. It is easy to communicate with the customers, easy to relist sold items, easy to see order status, etc,” said abdada.
Exchange rate volatility
The only complaints arose from the volatile nature of bitcoin’s exchange rate. Even though Bitmit has been building price security into the system with more regular updates, there will still be losers if the price shifts suddenly one way or the other (as it tends to do).
“I had an item listed and it sold only during a bitcoin exchange rate mini-crash,” said user OnlineDegen.
“At the time, the price of bitcoins crashed, but Bitmit was using the 24-hour average as an exchange rate, so the buyer’s coins were highly overvalued at the time of sale. It seems they have since changed the site’s exchange rate to use the last trade price, so this is no longer an issue.”
“I will use Bitmit again when I need to sell something because, as I said, it’s much less hassle than selling on eBay.”
The only other repeated quibble about Bitmit is its compulsory escrow system, which means sellers must send goods and wait for buyer confirmation before receiving their funds. Bitmit’s administrators appear reluctant to see any stories of fraudulent selling appear online, though, and keep watch over payments to even well-reputed sellers until receipt is confirmed.
In its two-year lifespan Bitmit has been compared both to market Goliath eBay and its evil twin the Silk Road.
The exact nature of its ownership has been questioned but reports of dissatisfied customers remain few. Should it sort out its technical kinks and continue efforts to be trustworthy (and hopefully outgrow its eBay-like branding), Bitmit could be another mainstream way for non-miners to acquire bitcoin. It could also do some heavy lifting in growing and broadening the bitcoin economy.
*Contrary to popular myth, it is not illegal to send cash through the mail, though it is considered risky. Buyers are also advised to review user ratings for sellers before buying, and use the escrow service for sales involving cash-in-the-mail and gift cards.