Why Selling Bitcoins on eBay is a Bad Idea

Not too long ago, I discovered that people were buying and selling Bitcoins on eBay. I also discovered that they were being sold for a whopping 200%-300% more than the current Mt. Gox price! "Wow!" I thought, "I could really make some money here".

The plan was simple: Buy Bitcoins at Mt. Gox, then sell them on eBay. Bam! Instant, easy profit.

Unfortunately, things didn't work out as planned. I did have some legitimate sales, but it didn't take long to discover that there are a lot of dishonest scumbags out there who are willing to lie, cheat and sell their integrity just to make a quick buck.

The Scam:

• By Bitcoins on eBay and pay with PayPal.
• Turn around and tell PayPal that someone else has fraudulently used your account to make a purchase.
• Because you cannot provide a standard "tracking number" to prove that you have sent the goods, PayPal reverses the transaction leaving the scammer with both your money and your bitcoins.
• eBay, having made it so that sellers cannot leave negative feedback for buyers, effectively protects the scammer so that they can cheat the next guy too. 

Of course, you could provide PayPal with your Bitcoin address and a link to blockexplorer.com where they could see that the transaction took place, but... What are they chances they'd actually understand it?

Granted, I did not try very hard to win the disputes that were filed against me as I had more important uses for my time and the overall amount was less than $100 USD. If you were diligent enough in attempting to prove that they are a lying cheat, you may have more success.

In the end, I definitely recommend NOT selling Bitcoin on eBay. If you find a way to block scammers, let me know and I'd be glad to make a post on it (giving you full credit, of course).