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A startup set to launch Thursday is betting wealthy individuals will buy and sell luxury items like upscale condominiums, art works and jewelry with bitcoins, a digital currency. BitPremier is aiming to act as a middleman, listing items for sellers who want to be paid in bitcoins.
Silbert is better known in the banking world as the founder and chief executive of SecondMarket , a brokerage that deals in the illiquid stocks of privately held community banks. BitPremier is opening up shop at a time when many Bitcoin-related businesses have struggled or closed because of the currency's volatility and a regulatory clampdown. A "gray zone," Alan Silbert admits, is whether the Financial Crimes Enforcement Network's recent guidance , which requires registration and licensing for certain companies that deal in virtual currencies, applies to BitPremier.
Bitcoin, created in by a pseudonymous programmer, has drawn attention in recent months as its exchange rate against the dollar has bounced around. V and MasterCard MA. The decentralized, peer-to-peer network is available to anyone with Internet access and offers minuscule fees and fast transfers of unlimited sums. Users also have the option of making transactions anonymously. But save for a few high-profile names, like WordPress and Reddit , bitcoins are only accepted by a random assortment of independent, mostly online merchants.
BitPremier aims to fill a void for them - as well as for those who want to obtain significant quantities of bitcoins without buying them on an exchange, like Japan's MtGox, where large orders can drive up the price. Selling big-ticket items is "a good way to monetize assets and get your hands on some bitcoins. Alan Silbert, who has worked in commercial finance since the mids, acknowledges that real estate transactions will be "tricky" for his new business.
Some jurisdictions may not allow BitPremier to act as an escrow agent, for example. Sellers can submit items through BitPremier's website. After verifying an item is genuine and fits the brokerage's criteria e. The prices are set in dollars and every few minutes the website updates the cost in bitcoins, in which all transactions are settled. Buyers can indicate their interest in listed items to BitPremier, which will forward these offers to the sellers. Until the terms of a transaction are agreed upon, both sides remain anonymous.
Once terms are finalized, a buyer will zap the digital money to a Bitcoin network address provided by BitPremier. BitPremier will hold the coins in escrow until the buyer confirms receipt of the item and both parties agree the deal is completed. The coins "are moved and held offline, and stored on USB drive and paper backup in a bank vault until funds are ready to be released," according to the company website.
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