Show HN: Buttercoin (YC S13) US Bitcoin Marketplace – Free Trading Through Dec

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.

>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?

You should not. You should buy the Bitcoins, then move them to your own wallet.

Not only that but the back button shenanigans seems to actually have caused the HN favicon in MobileSafari new tab screen to be replaced with their bitcoin logo!

Usually I associate sites that break the back button as untrustworthy (Spam, Porn, Porn Spam, Malware). Not a great first impression considering, you know bitcoin, money and all of the fraud that has been associated with it to this point.

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

I would just bake the static pages as html and serve with nginx or cache on CDN. It seems like overkill to cause all pages to render with JavaScript.

Same here, assume on the U.S.

AML, presumably?

Yeah, we're working to expand coverage and bank relationships outside of the US. I can't give any specific timeline, but it's one of our highest priorities.

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.

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.

Thanks for pointing that out. I'll try to make it more clear.

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

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).

Good questions, exactly what I am thinking. If I had a bitcoin for every hacked bitcoin company story.

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.

Ha! I wish ChangeTip supported HN.

Good catch, thanks.