
Show HN: Buttercoin (YC S13) US Bitcoin Marketplace – Free Trading Through Dec - revcbh
https://buttercoin.com/#/setup?r=D6YDrSLZ6GX
======
DigitalSea
I am a bit reluctant to trust another Bitcoin marketplace. So many of these
marketplaces have failed the past year, what reason should people have to
trust Buttercoin or think that they are more secure than the likes of Mt. Gox?
Being a funded marketplace just means that you are more than likely to be the
target of hackers trying to prove a point. I've already lost a little bit this
year because of various marketplace collapses.

What protections are in place for losses? What are you procedures for storing
coins (hot wallets, cold wallets, etc)? Do you have a guarantee you are
willing to publicly stick by? Has your marketplace been audited and verified
by a third party security firm? How often will you undertake auditing of your
marketplace to ensure that it remains secure and funds are safe? If customer
coins are ever compromised, will you cover 100% of the losses?

I have a few BTC, I would be more than willing to try this out, if you were
more forthcoming in regards to security and your guarantees. Being a funded
marketplace, I would like to think you built a decent and secure environment
for Buttercoin as well as got the site audited independently by a third party
security firm who perhaps specialise in financial/marketplace scripts.

I am not trying to be cynical here, Buttercoin looks great, but you can
understand given the losses I have endured the past year, that I am very very
hesitant to trusting another marketplace and I assume there are many out there
like me who have been burnt the last year. My trust in all coin marketplaces
has been broken, I just need the public reassurance you will do things
differently and your policies/procedures before I move any of my BTC.

~~~
revcbh
We have been audited by independent security professionals and will continue
to undergo frequent security testing (both code reviews and adversarial
testing). I'll try to make the results of that more public, since you
obviously shouldn't just take my word for it.

To protect against losses we're working to get insurance for deposits setup,
but it's not in place yet. We're also looking at the possibility of letting
people maintain custody of their coins if they don't need realtime trading.
Proof-of-reserve is also planned soon to guarantee that all accounts are fully
funded.

Right now, the vast majority of coins we control are in cold-storage wallets
that require 4+ people to access, with most of the rest in cold-storage
wallets that require 2 people to access. Only a very small amount is in a hot
wallet. We're working with a partner to add custodial multi-sig to our hot
wallet (and maybe cold wallets) so that even if someone compromises our
machine, there's an external signatory which will be able to prevent
transactions from processing.

You're right to be cautious. Even though I keep most of my bitcoins on
Buttercoin, in general I wouldn't recommend that anyone use a centralized
service for long-term storage. We know that people will do that though, so our
security has to be up to par. Hopefully the features we roll out over the next
3-6 months will create enough transparency that you can trust us.

~~~
simonebrunozzi
I like your openness. What's your role at Buttercoin? Also, how do you
differentiate from Coinbase?

~~~
revcbh
I'm one of the founders/CTO.

Our main difference from Coinbase is that we have an order book and real-time
trading. Coinbase is great for people that want to buy some bitcoin at a fixed
price and don't mind waiting a few days to get them. We focus more on
businesses and traders that need to buy and sell bitcoin in real time. Adding
USD is also very fast with us, usually 1 or 2 days. I think that's slightly
faster then Coinbase, or was last I checked (unless you add a credit card for
instant buy with lower limits). It doesn't matter as much in Coinbase's model,
since they're fronting cash to lock in a price.

------
Alupis
Very annoying that they break the browser back button... (it just reloads the
page)

~~~
revcbh
Oops, that's a bug with how we're using Angular. Thanks for pointing it out!

~~~
wslh
Yes, typical single-page application bug where you need to handle it by
itself.

Take also into account the possibility of having many tabs opened with
different navigation paths.

------
revcbh
We're finally open for anyone to signup, so we're celebrating with free
trading. Please write bots, we've got a pretty good API.

The open source re-release of the engine is also back up for anyone that wants
to play with it:
[https://github.com/buttercoin/engine](https://github.com/buttercoin/engine)

------
joeyspn
"Unfortunately Buttercoin is not accessible from your location" [0]

Europe/Spain

[0] [https://s3.amazonaws.com/static.buttercoin.com/location-
not-...](https://s3.amazonaws.com/static.buttercoin.com/location-not-
supported.html#/setup?r=D6YDrSLZ6GX)

~~~
eof
AML, presumably?

~~~
revcbh
It has to do with banking and regulation. Adding new regions takes a lot of
time and effort to get right, but we're working on it.

------
_cpancake
Isn't this the one that turned out to be a scam?

[https://github.com/buttercoin/buttercoin/issues/71](https://github.com/buttercoin/buttercoin/issues/71)

~~~
revcbh
Nope, although PartTimeLegend is obviously quite disgruntled for some reason
I've never entirely been clear on. Nobody was removed from the project on
GitHub for over a year after there was last active development. We only took
people off of it when some started acting in a disruptive or aggressive
manner. Anyone that still wanted to work on that project
(buttercoin/buttercoin) was invited to let us know and we would give them
access or transfer the repo to them.

That repo was the initial open source attempt at a better trade engine in
node. It suffered from too-many-cooks syndrome after being started as an
announce-first project. There was no clear direction, some people wanted it to
be a distributed market, etc. After a couple of months, we thought it would be
best to start from scratch with a small team on a focused implementation in
Scala. That's available at
[http://github.com/buttercoin/engine](http://github.com/buttercoin/engine).

The other contentious point was bitcoins that were donated. We posted a couple
of times over the course of the year that anyone who had donated should get in
touch with us to have their coins returned as the original project looked
dead. Nobody contacted us, so we decided the best course of action was to
simply return the coins to the address they came from. That irritated a couple
of people, but I still think it was the right thing to do, especially as the
person who had originally collected donations had left and there was no clear
governance setup for their use.

The original impetus for the project was to create a more robust and secure
way for people to access bitcoin liquidity. Specifically in the US, since
that's where people seemed to be having the hardest time getting money in and
out of other platforms. In that respect we've succeeding. We're also still
committed to open sourcing as much as we can and will continue to expand the
buttercoin/engine repo.

------
modeless
It's a bit strange that Alexis Ohanian is listed as an "investor" in the page
and also as a "founder" in the footer. I guess the footer isn't intended to
mean that he's a founder of Buttercoin, but it sure is easy to misread it that
way.

~~~
shakethemonkey
Also I am not sure how this[1] fits in. I remember Paul Bohm being the founder
or co-founder of Buttercoin, but his name is absent.

[1]
[https://www.youtube.com/watch?v=YLoVikMXBeA](https://www.youtube.com/watch?v=YLoVikMXBeA)

~~~
lowglow
At one point he was a co-founder. He has since left.

~~~
shakethemonkey
History was rewritten, then? You can't just un-co-founder someone. In
unrelated news, we have always been at war with Eastasia.

~~~
revcbh
Paul left after a couple of months and hasn't been involved with the project
for about a year and a half. None of the design or code is based on the
original open source effort which he started. We're not trying to hide
history, he just doesn't want people thinking he's associated with it anymore.

------
joosters
1) What makes you better than the many existing Bitcoin exchanges? The website
doesn't offer any explanation about why a potential customer should choose you
over the alternatives.

2) What guarantees or protection do you offer customers for the Bitcoin that
you hold? I don't mean in terms of security systems, encryption or any
technical details, just what happens if you are hacked and lose coins. Will
you reimburse customer losses at all?

~~~
revcbh
1) Compared to exchanges like Bitstamp, we have US banking relationships and
can fund accounts via bank transfer in 1-3 days. Generally, wiring funds
internationally is much slower and more expensive.

Compared to brokers like Coinbase or Circle, we have an order book, so traders
can quickly adjust their positions.

2) We're working on insurance for held coins and the ability for customers to
maintain full custody of their coins (possibly at the cost of slower trade
completion times).

~~~
bbcbasic
2 could be done as some sort of super-fast escrow service.

~~~
revcbh
Yeah, that's basically the idea, probably using some multi-sig protocol. It
will never be as fast as our internal ledger though, since I think we'd need
to wait for at least one confirmation before funding the trade.

------
pazimzadeh
Free trading, but "There is a fee of 0.5% + $0.38 per transaction" charged by
the payment processor to add money to the account.

~~~
revcbh
Yep. That fee is still competitive even if you're just buying and holding, but
we're geared more towards traders.

We're working with our partners to improve the cost structure so that we don't
have to charge deposit fees.

------
elyrly
Thanks for the talk (Bennett Hoffman) yesterday @ Bitcoin meetup yesterday.
Looking forward to the additional features to be rolled out.

------
mhluongo
We've been using Buttercoin for a little while now- very pleased with the
service so far!

------
jackmaney
I wonder if Professor Chaos had a hand in this...

~~~
revcbh
Ha! I wish ChangeTip supported HN.

------
roywiggins
> a team that cares about it's customers

*its

[http://grammarist.com/spelling/its-its/](http://grammarist.com/spelling/its-
its/)

~~~
revcbh
Good catch, thanks.

------
theavatare
Congrats! Looking snazzy.

------
kyu
Congrats on the launch!

