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Show HN: I built a website that lets you freelance for bitcoins (btcworkers.com)
102 points by GeorgeRR 1700 days ago | hide | past | web | 89 comments | favorite



Just placed a bid on a project. Didn't realize till after placing it that the message would be publicly accessible. There's no mention of this on the bid page nor is there any way to edit the message after the fact. Both of these sound like issues that should be addressed.

Other than that I like the idea. Although, the only reason I can think of why a developer would use btcworkers rather than your USD counterparts would be for anonymity (read: avoid paying income tax). What are the other benefits to being paid in bitcoins?


Other than that I like the idea. Although, the only reason I can think of why a developer would use btcworkers rather than your USD counterparts would be for anonymity (read: avoid paying income tax). What are the other benefits to being paid in bitcoins?

I think you know this, but perhaps not all readers do: you still are actually required to pay tax on earnings in BTC - just not declaring the income is illegal (and the authorities _are_ likely to notice if you're making a large amount of it and converting it back to your home currency to spend).


Good point. But I would argue that receiving payment in BTC makes it easier to illegally not declare the income. Now that you can pay for all kinds of products and services using BTC there's no need to convert it to another currency first. The only way to trace it would be if the employer filed a 1099, which they're still incentivized to do in order to write the payment off as a cost instead of profit.


What if you were to get paid in something really non-traditional, like goats.

i.e. - I build a fence for a farmer, and he gives me 7 goats.

What do I owe the IRS?


You are required to count the fair market value of the goats as income.


Hypothetically, what if you only bartered and never used 'money'? Would you be required to sell a goat or cow in order to get the cash to pay taxes? Would someone from the IRS just show up and take a goat to sell if you didn't pay?


Heh, good question. I've never thought about it. Looking on Wikipedia, it does appear that you'd have to come up with the money from somewhere:

http://en.wikipedia.org/wiki/Bartering#Tax_implications


In the US and the UK, income is income however earned in whatever currency or form transacted (i.e., whether cash, sex, goats, or blessings).

The IRS does not accept payment in goats. They could secure a court order requiring you to sell the goat, or allowing them to sell the goat to satisfy your tax liability (with the excess returned to you).


Good question for The Goat Spot:

http://www.thegoatspot.net/forum/


I almost can't believe Wikipedia has an article on this:

http://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_t...

> The Internal Revenue Code is not a mechanism for enforcing other codes of law, such as criminal law. [2] A person’s taxable income will generally be subject to the same Federal income tax rules, regardless of whether the income was obtained legally or illegally.

Also, Yale Law has a PDF entitled "Taxing Income from Unlawful Activities" (1974):

http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic...

> When income from unlawful activities is reported, the taxpayer often supplies his name, address, and net income (usually in round figures, with such laconic labels as "miscellaneous income" or "income from various sources") and leaves the rest of the return blank.

The whole PDF is actually a very interesting historical study of the ins and outs of taxing ill-gotten gains.


I was about to bid on the same project as you and refreshed before submitting and saw yours and then decided against bidding due to this. My message included my intended approach to the work and past projects and also a link to my cv. I didn't want this to be public.

I emailed the contact address for the site to complain about it.


International work. I would use this to find freelancers and be able to easily make payments regardless of where the worker was based. I am in the UK so it opens up access to other workforces, plus making paymets to those foreign Workers would be simplified.


Exactly. There are countries (Ukraine, Belarus) where PayPal does not allow to withdraw funds (due to stupid local tax code and government regulation of foreign currency) but BitCoins are transferrable freely.

Actually the whole story is not about taxation. Local government wants to control and supervise all people's money. For example, for each incoming payment (wire transfer) they require a piece of paper with ink seal of the sender, date, amount, and account numbers of both parties. If any of these attributes does not match bank transaction data, then you've got a fine. Every local law in this area is made in such way that local workforce is isolated from global market, underpayed, underemployed and kept politically loyal.

So, bitcoins are a like breath of fresh air here. They bypass traditional banking system, controlled by corrupt local authorities.


In what way is it really simpler than paypal or some other webwallet?


Once you have bitcoins in a wallet (and internet connection) you can send them to ANYONE in the world with a bitcoin wallet. It can't be more simple. And getting a wallet or wallet service is easy.

You also not need to read and agree to new terms of service every few months (how many people actually read them?). No need to worry you're account will be blocked, that the payment service will stop working and so on.


In a situation like this the terms of service will not affect you, your account will not be blocked and the payment service will not stop working.

People keep forgetting that the overwhelming majority of all eBay payments are done using Paypal.


My paypal account was blocked and the money confiscated for fairly arbitrary reasons.

I opened a new account in a new country because paypal wouldn't allow me to change my address and a site wouldn't deliver to an address other than the paypal address.


If you're using sites like this, and you're in the UK, you will need to pay tax (in real money) on the market value (in real money) of the work you undertake. If you're a sole trader, the bitcoins become yours, so if you are planning to keep them and "spend" them later when their value increases, you may be liable to capital gains tax on any appreciation in value (over a certain amount) as with any other asset. If you are a limited company, the bitcoins will become an asset of the company, and tax implications for disposal are as with any other asset.

I am not an accountant, always check with yours first!


I wonder if you can hold bitcoins in an ISA.


no


How about if you held shares in a company that existed only to own Bitcoins?


Isn't the point of bitcoins that you don't have to pay tax on them?


In the United States, you are required to pay taxes even if you trade your services as a dentist for the services of a doctor (barter transactions are fully taxable, although some obviously fly under the IRS radar).

Every sale you make with bitcoins should in theory be subject to sales tax, and any work you do should be subject to income tax. I suppose you might even be subject to capital gains tax if the value of your bitcoins goes up (although I'm not sure if capital gains has even been tested for digital currency, gains in foreign currency values are taxed).

The only way bitcoins can enable you to not pay tax is through lying to the IRS (i.e. tax evasion, which is illegal). And, given that anonymity with bitcoins is harder than it seems, there's a good chance that you will eventually be caught if bitcoins become popular, even if the IRS is not aggressively looking at bitcoin transactions currently.

If you suddenly start making all of your income in bitcoins and don't report it to the IRS, the IRS may very well audit you, wondering how you are supporting your lifestyle without any income.


It may be the intention of the creators and users. However, in the UK at least, tax law is quite clear that you have to pay tax if you perform work in return for a "consideration", be that cash, bitcoins, donkeys, sex or music (for example).

Although the creators of laws don't always have in mind what happens online (often because they were created before the internet), most laws are broad enough that they cover new creations like bitcoins.

People & businesses have often tried to avoid paying tax by "swapping services" (e.g. accountant does developers accounts in return for a web site, and vice-versa), so the tax laws are deliberately broad to cover all "novel" non-monetary forms of payment.

Of course, you can only be found guilty of tax evasion if you are caught...


Laws may theoretically cover those things, but that doesn't mean they are effective. I'd like to see them try to tax a sex and music based economy.


It might be interesting to see what value the taxman puts on my bedroom antics (I'd like to think my services appreciate rather than depreciate over time...)

However the taxman has a useful trick, in that she can tax based on the (monetary) market value of the thing being "bought". So if you have sex with me in return for me developing your (£xxxx worth) iOS app, and the taxman finds out (during audit : "who developed that app, and how much did you pay?") she'll WILL come knocking on my door for payment (in cash, unfortunately, the Queen doesn't accept nookie). In the UK the taxman has a long history of investigating and taxing non-monetary transactions.

Casual transactions between the public will probably slip under the radar, but try earning any significant "sex and music" as a business or self employed, and you run a reasonable risk of getting caught out.


A sex and music based economy sounds great.

Though thinking about it, as a non-musical nerd I'd probably starve pretty quickly.


It is also worth noting that if said music-based economy was a one in which the music was digital, most likely there would be rampant inflation due to counterfeiting.


Define "intent of bitcoins".

Some people may intend to use them for that, but it seems to me the primary purpose of the creators of bitcoin was to create a currency that was not under the control of a government and subject to arbitrary currency manipulation as a result.

Creating a currency to merely avoid taxes would be a lot simpler, really. Step one is just not to not pay taxes, after all...

Also, consult your accountant/tax attorney, but AFAIK the US has very similar provisions to what RobAley is describing. Transactions not conducted in dollars occur all the time and the IRS is not left stymied by them. In that sense there's nothing particularly special about bitcoins.


No, the point is to have a decentralized currency. Just like the internet, it provides great freedom and stability.


I don't know any of tax code that stipulates that you only have to pay tax on earned income paid in a certain currency.


how will the tax man know you have earned them?

if you sell/exchange them for cash on localbitcoins.com there is no record and no tax to be paid.


Presuming that you've got them in return for doing some dev work (the subject of this article), when the tax man audits the company that you did the work for, and asks them to explain where they got the website/app/software developed when they don't have inhouse developers one of two things will happen. Either they won't give the tax man your details and invite the rath of the tax man, or more likely they will give them your details and how much was paid. You see, even if your customer keeps the transactions completely off the books, there is usually something to show for it, particularly if we are talking any kind of volume, and the tax man is very very used to looking for those kinds of signs.

> and no tax to be paid

There is tax to be paid, legally speaking, its just a question of whether or not you get caught for not paying it. Just like the tax man investigates people selling stuff on ebay, when sites like localbitcoins become more popular they will start investigating them as well. You may just find that the person you're meeting to sell your bitcoins to turns out to be a tax investigator.

AS with all criminal enterprises (a harsh label, but that's what tax avoidance is), you may get away with it. Or you may not.


however looking at it from an international perspective, if i am paid in BTC by someone operating out of the US (for example) and they tell the US taxman that they paid someone in the EU for the work then the US taxman is not coming looking for me.

as for meeting someone who turns out to be a tax investigator so what, localbitcoins.com and sites like it require no registration or even adding any personal details, unless I give the taxman my details he will not know who I am. Plus localbitcoins.com is not even necessary any forum could be used to arrange to meet and trade/sell BTC.

I guess what i am saying i that BTC allows people to avoid the taxman entirely. In your example of a company buying services, they are unlikely to use a BTC site to hire a feelancer, preferring to stay within the remit of fiat currencies and the taxman, however for individuals it is much more appropriate and much less interesting to the taxman,.


Indeed, for private individual - individual transactions, particularly low value transactions, you are most unlikely to be caught as there is much less interest to the taxman. To which end, you can just use cash.

This article however is about business/freelance type work. And at least here in the UK, the taxman is just as interested in individuals doing business deals as it is with corps. If you think that you don't run the risk of getting caught, bear in mind that anonymous off-the-books cash transactions, including international deals, have been happening since time immemorial, and the taxman regularly collars offenders.

With regards to localbitcoin, the moment you hand over your btc in return for their cash, (here in the UK at least) a taxable transaction has occurred and they can compel (via arrest if necessary) you to provide your identity.

If you avoid public forums and launder your btc with only trusted friends/contacts, you may get away with it. But you're limiting your market and reducing the exchange rate you'll get.

And if you start pulling in larger amounts and converting that to cash successfully anonymously, you start having the same problems drug dealers do when laundering their money that came from untaxed sources. Here in the UK, you won't be able to use bank accounts as money laundering regs mean larger deposits have to be explained and notified, and of course bank records are just that, records. Likewise if you go to purchase that shiny new car in cash, money laundering regs kick in again.

So for small amounts you will probably get away with it, but the taxman doesn't care too much about those, and such transactions already exist as "cash-in-hand" work without btc. Bigger transactions are just as problematic as cash, unless everything you want to buy is available from sellers who accept btc and delete their shipping records (or provide the product digitally).


You should really consider price floors for certain categories (take crowdspring as an example). For example, there's someone on your site offering 1 BTC (~$12 USD) for a logo...I'm not even a designer and I know that's an awful price.

Sites without floors tend towards high-volume, low-quality projects listed. I am not saying you should have market prices, but having some reasonable floors will give the site better quality.


An option to filter out offers by minimum price would be sufficient. Introducing price floors would decrease number of offers which the site doesn't have much yet.


It would, however, increase the quality of the offers. I'd go elsewhere if I had to make some sort of effort to hide what may as well be spam.


I don't think this is such an effort to filter offers, you would just need once to setup a preference to not show certain type of offers you're not interested in (e.g. show only top 20%).

What do you mean by quality of the offers? Maybe you just want to eliminate cheap competition which has better quality/price ratio?

There may be demand for cheap services in developing countries and there may be people willing to work for such money there. Wouldn't you want to receive cheap service yourself? Cheap doesn't always need to mean poor quality.

If someone wants quality work done he is probably aware he won't get it for 1 BTC, but maybe it would be enough for him.

Bitcoin was created for freedom of exchange and any limitations would hurt the market.


As a general rule, you get what you pay for. Further, allowing anything on the site is going to lead to the same problem as all the others: as a developer you open the page to see an endless sea of requests to make a facebook clone for $5.


Exactly. Offering the possibility to filter out these jobs is not enough, they simply shouldn't appear, because they hurt your platform's credibility. As paradoxical as it sounds, I think you should be picky about the jobs you accept, so as not to be viewed as cheap shitty platform. Nice idea nonetheless, I look forward to see where you're going.


You might want to split up your "Python/Perl" category. While Python does have some similarities to Perl they're not quite suitable for lumping together any more than say PHP and Perl or Java and C++ for example.


I think a lot of the things being built around bitcoin at this stage are for/by enthusiasts. But, riding on the recent theme of coming up with startup ideas, the seems like good ground for an exercise.

If bit coin keeps gaining traction, where will it spread to first? Here are some of my thoughts:

Markets where chargebacks are a big problem: (1)easily resalable physical goods (ipods, supplements), (2)Gambling.

International ecommerce: (1) This already involves more than one currency. (2)Fraud is a bigger problem (3)transaction fees are higher (4) transaction times are higher.

International ecommerce - problematic markets: (1) high fraud markets that CCs/Paypal don't serve. (2)restricted currency markets(

P-2-P Markets: (1)mutual fraud concerns. (2) no "customer" that needs figure out bitcoin.

Avoid official detection: (1)drugs/illegal markets (2) bitcoin tax haven.(3)money laundering & other criminal banking needs.

*I notice a theme in my thinking: bitcoin as a credit card replacement.


Why do you think chargebacks are a problem?

They are a problem and annoyance for merchants, yes; but a great benefit for consumers. Can you imagine buying ipods of randomer on the internet and once you send the money, it's gone. They can send you a box of sand instead and there's nothing you can do. That's a disadvantage to consumers.


The idea is behind chargebacks is good, but the implementation is somewhat lacking. An example, my wife has an online shop, and (unsuprisingly) uses Paypal. A company bought an item from her. The transaction went smoothly, they paid, she shipped the item. Unfortunately, the card details they used to pay with got stolen. So they chargedback a number of transactions that has been made with this card. One of them was my wife's. Here's what my wife had to do: dispute chargeback with Paypal; get in touch with the buyer and ask the buyer to inform their bank that this transaction was legit. Then wait 6 months. Eventually she got paid back, bar the PAypal "processing fee", which wasn't a lot, but since the item was pretty cheap, it ate all the profit she made. We tried to get this paid back, but to no avail. Now, it's good that the buyer charged back accidentally and acknowledged it. But there are lots of who do this for profit, and with the broken banking/paypal customer (as in 'merchant') support system, have fun getting your money back. This is why chargebacks might be a problem.


Again, they are a problem for sellers. More people are sellers these days, but we gear our consumer law and financial devices to advantage buyers. Buyers are more often the people with more to lose, and are certainly more numerous. Buyers have been ripped off throughout history and we have learned, slowly, to make things easier for them.

Economically, if you don't build in buyer protection, they may stay away entirely.


You see, I'm not saying that buyer protection is bad, but the payment provider companies should offer the same level of support to merchants. Now for a buyer (legit or fraudulent) it only takes couple of clicks to get their money back. And it is virtually impossible for a seller to dispute this.


I understand that must be frustrating as a seller, and perhaps the balance has shifted too far, but consumer history has taught us that having this relationship tilted in favour of the buyer is a good thing.


They are more than a problem & annoyance for merchants. They are completely prohibitive to a lot of services. Chargebacks essentially mean that a merchant has no guarantee that they get to keep a payment till 6 months after it has been made. In market where goods are easily resale able, this adds significant costs in fraud and fraud prevention. My guess is 5%+ for the more vulnerable merchants. This hits smaller/new merchants disproportionately. It also raises the required skillset for being an online merchant.

To minimize fraud merchants will often refuse risky business like international orders or orders where the billing and deliver addresses don't match.

There are several interacting "margins" limiting ecommerce. Merchants not skilled enough in fraud protection. Market to fraud prone. Low margin markets where 2.5% processing fees + 2.5% fraud + 2.5% fraud prevention make it unserviceable. Move any of the boundaries and you will allow more merchants to exist.

Are they great for consumers? There are invisible effects that ultimately hurt consumers. A site may refuse to deliver to you. It may hold back shipments until the fraud checks are done. You may be paying more. A site may not exist at all because they were unable to deal with chargebacks.


Chargebacks and fraud are an absolutely monumental problem for most internet merchants. Especially high risk stuff like gambling and porn.

Each chargeback costs the merchant about $30 and then after so many chargebacks your credit card billing rates change. Too many chargebacks and you lose your ability to take credit cards all together.


But without them a lot of folks wouldn't use internet services at all, because of the very real danger of abusive sales practices.


escrow serves the same purpose, you confirm you are happy with the product before releasing the funds, but you cannot just claim the funds back yourself once the are in escrow, that requires the other parties agreement. What it does is even the playing field between seller and buyer, which benefits all honest parties. the current status quo is that the merchant/seller whatever takes all the risk for a potential chargeback down the line.


I had a quick look at the jobs offered on the website and I found those as example: WordPress template: budget 12 BTC (~115EUR?) PHP: add more currencies to BT converter site: budget 5BTC(~50EUR?) DE to EN translation: 3BTC (~30EUR?) (conversions are very inaccurate, I just wanted to get an idea)

My question is: is there something about Bitcoin that I am missing that would entice people to work for such low rates? If someone came up to me and asked me to do any of those jobs for those EUR rates, I would decline unless they are either very good customers of mine or I really fancied them.

This is a serious question, not criticism. I'd like to know whether there is an allure to Bitcoin that I'm completely missing that would make people agree to work for less "real" (i.e. not-Bitcoin) money.

Thank you.


If you look at similar platforms based on "real" money (as you put it), you will see these are actually relatively high budgets for these projects. Take a look through the projects over on odesk and weep: https://www.odesk.com

Given that though, yes there is an allure to bitcoin. Many people believe they will be worth more in future, so may willing to work for lower rates in order to get some and participate in the "bitcoin economy".


Yes, I know the rates in USD/GBP/EUR, and that's why I was asking. I had a quick look at odesk and the rates are lower than I would normally charge myself for the things that I do.

That's what made me curious, but your answer makes a point, but then it means people are taking a punt on the Bitcoin.


This is the nature of these online job arbitration sites. Everyone who wants a project done is dreaming of some foreigner who can live very well on $1/day (as if that were related to value of their work) and will produce code as good as professionals from their country. Some of the older sites are much worse. When I saw your examples I thought you were going to complain that it was too expensive!


It is not clear at all how to make a listing after signing up.

I would create a big button that says "CREATE LISTING" like StackOverflow has for asking a question

Also, is there a way to add a category/request that one be added? There's no "Ruby" section and I was looking to post a listing.


Thumbs up! My SEO/SMO service marketplace http://marketplace.rankgrow.com will accept BTC soon also!


The idea of my time having variable value is a bit scary (trading at a bit over $12 currently, but I'm not sure what will happen when the payout drops soon). Then again, that's what working for a VC-backed startup is: the possibility that my development effort might not pay off. That said, the startup has significant potential, whereas working for Bitcoins will not likely have the upside to justify the risk.


I don't know. On the one hand, it's very easy to see Bitcoin failing as a currency and disappearing within a few years. On the other hand, the aggregate value of all Bitcoins in circulation is ~$120M with millions of dollars worth of Bitcoins changing hands every day. Companies are pouring millions of dollars into custom ASICs to join the Bitcoin network, and there's a solid core community that's unlikely to abandon it quickly.

Two years ago a guy bought two pizzas for 10,000 BTC when it was 1 BTC ~ $0.004 USD, and many people thought the fact it had any real dollar value at all was pretty out there. Now, people are already talking about using mBTC or uBTC by default if the value goes up a lot more. Just because $10 / BTC feels high doesn't mean it isn't still extremely early in the life of Bitcoin.

You can be long or short Bitcoin, but I think that if it does end up working, it has a long way up to go.


The value of the US dollar is variable, too.


USD is far less volatile than BTC though isn't it?


You can immediately exchange BTC for USD, so the volatility of BTC truly isn't a great concern. There's a very small chance that you could receive BTC, and when you are not paying attention for a day or so there is a sudden sharp change, maybe -1/3 max realistically, in BTC value. The move could always be to the upside too. I think we'll have >$100BTC within 2 years.


Volatility is a concern if you want BTC to be a viable currency for storing value and setting prices rather than just a quick medium of exchange. Currencies like USD may fluctuate but they are a bet on the long-term stability of the US, and are tightly regulated, even if that power is sometimes abused to debase the currency.

One of the main problems with Bitcoin from my perspective is that nothing backs its value; the value is unregulated and purely arbitrary and thus subject to all kinds of manipulation and confidence tricks. The current price depends entirely on confidence. It's an interesting experiment but I wouldn't want to store value in such a currency, and if you can't reliably store value or reliably price goods in it vis a vis other currencies, it's more like a payment method than a currency.


Currencies like USD may fluctuate but they are a bet on the long-term stability of the US, and are tightly regulated, even if that power is sometimes abused to debase the currency.

Pretty much every fact you name in that sentence is part of why I'm storing some of my value in bitcoin. I wouldn't count on the long-term stability of the US.

One of the main problems with Bitcoin from my perspective is that nothing backs its value

Nothing backs the value of gold, either. Come to think of it, I'm not sure the whole "backing" concept is really valid. I mean, yes, saying currency X is backed by metal Y is giving you useful info, but metal Y is always just a commodity.

the value is unregulated and purely arbitrary and thus subject to all kinds of manipulation and confidence tricks.

That's somewhat the case now becuase the market is pretty illiquid (bitcoin is only used by geeks). If/when the market is really liquid and the total value stored in bitcoin is enormous, that won't be the case anymore.

The current price depends entirely on confidence.

That bothers me too. But, ultimately, there will always be a demand to store value, and bitcoin is a good candidate, since there is a fixed number of them. If bitcoin were to become really big, whenever there were a price dip, speculators would jump in and bring it up again. And I think we've already reached that point to a large degree. It seems like there really is a floor on the value of bitcoin (and this will be increasingly true, and the floor will get increasingly higher, as bitcoin becomes more popular). You just aren't gonna see gold go down to $500/oz in current USD; nor are you going to see bitcoin go down to $3 (if it does, I and a ton of other people will be snapping it up as fast as possible... which is why it won't get there in the first place).

Actually, it could go down to (say) $3 if a big holder of bitcoins dumped them all suddenly and irraionally, since the market isn't that liquid, but there would be an immediate price correction, so it would just be a temporary blip.


One suggestion. May be you should add couple of entries in your FAQ about Bitcoin and what's the value of trading in it instead of currency.


Ok, I created an account, but apparently there were some kind of hiccup and now I can't login. There is no information to get about it, and there doesnt seem to be any way to reset the password.

Please fix that so I can sell my services!


A character limit note in the Edit Details textarea would be helpful, or at least if the form fields remembered what I typed in before displaying an error. It wiped out everything I'd written up.


Basics: put a "forgot password" link please. User gets annoyed if he doesn't have a password reset option.


i'll try it once bitcoins gets easier to use. at the moment, it's too much of a headache/hassle/mystery.


Bitcoin's really easy to use.

  1. Download the client from bitcoin.org.
  2. Launch it and let it sync with the network. (Unfortunately this takes a long time upfront.)
  3. Use the "Send Coins" and "Receive Coins" tabs to send and receive coins.
Buying Bitcoins with credit cards is still somewhat annoying, but not hard. See https://en.bitcoin.it/wiki/Buying_Bitcoins_(the_newbie_versi..., or for a more complete version, here: https://en.bitcoin.it/wiki/Buying_bitcoins

If you wanted to go with a hosted service instead of running the Bitcoin client on your own computer, there are many available. A few include:

  - https://blockchain.info/wallet/
  - https://www.mtgox.com/
  - https://www.coinbase.com  (YCS12)


Also consider using the electrum client. It uses remote servers for the blockchain, so you don't need to download and sync with the network, while you keep the private keys for your wallet, so you don't need to trust a remote service: http://electrum.ecdsa.org/

It also generates new addresses deterministically from an initial seed, which you can write down and keep securely or remember in your brain, allowing you to recover your entire wallet if you lose access to your computer.


I was curious if this was secure. Apparently you are trusting the server you retrieve blockchain information from, and could be defrauded if that server is compromised:

https://en.bitcoin.it/wiki/Thin_Client_Security#Server-Trust...

Looks like a downside worth keeping in mind with Electrum.


Yes it is slightly less secure. But you can't really "lose" money so much. What can happen is the server can report that you have money that you don't actually have, so if you were expecting to receive some coins, and the attacker had control over one of the servers, they could make you believe you had received them.

There are several stratum servers however, and you can disconnect from one and check with another. I think the plan is to eventually connect to multiple and make sure that they agree. This doesn't prevent a possible man in the middle though if all your communication is being tapped. Personally I think this slight risk is worth it for the instant start times and the deterministic wallet. And it's still considerably more secure than the online hosted wallets, where you are not in control of your coins at all.


With security I'm interested in the situation right now, not what the plan is to do eventually. If I were to get ripped off, it's no consolation knowing that someone was planning to fix the bug later when they got around to it.

The attack described is a serious one. If someone compromises (or colludes with) the server, they could “buy” 100 BTC worth of stuff from you without really paying. You send the stuff, and you're 100 BTC poorer. In the end it's as if you'd been robbed. Same result.

With an online hosting service, like Coinbase, I think it's rather obvious you're trusting them, just as you would trust PayPal or a bank. You can make an informed decision whether you trust them (and their security) based on reputation.

The Electrum website, in contrast, hides the fact that I'm trusting a third party and makes no mention of who that third party is or why they deserve my trust. IMHO, they should disclose exactly what's going on very prominently. But they don't. As a person new to Bitcoin, based on what I know so far, I would sooner go with Coinbase than Electrum.


You motivated me to finally install and try it. Thanks.


One comment, in the browse section put an indicator of how many projects are in each category.

For instance:

Python/Perl (0)

Cool site. Good luck!


Would be cool to see bitcoin services use your bitcoin identity instead of email


How would that work? Bitcoin doesn't really provide an identity.


You could create a login-token signed with your bitcoin private key. Wallet software would have to implement that, though.


I've seen it work on a few sites, like AnonymousAds, but yeah it's not a 1:1 mapping


Yup. Bitcoin is meant to be anonymous.


This is a common misconception. Bitcoin isn't anonymous, but there isn't really a way to use your addresses as an "identity" easily, either. Sure you could use a Bitcoin address as the keypair it is to authenticate yourself, but that seems like an odd way to sign up for a service.


no it is not, its decentralized nature does lend itself to anonymity however.


great concept, I'd love to see what other eCommerce sites and apps will be created as a result of growth in the popularity (as well as the wider usage) of the Bitcoin currency.


I can't pay my rent in bitcoins tho.


There are many exchanges that trade BTC against traditional currencies (for example, mtgox, btc-e, or bitstamp). It's very easy to convert BTC into USD or EUR.


have you asked your landlord?


... or bypass your way around immigration laws. haha, gg dude




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