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Mt. Gox and many other exchanges have put into people's minds that you HAVE to forfeit your rights to your Bitcoin when using online services. It doesn't have t

by M4v3R 13y ago

Mt. Gox and many other exchanges have put into people's minds that you HAVE to forfeit your rights to your Bitcoin when using online services. It doesn't have to be that way, though. You could just use a system like we use at Bitalo [1], where fractional reserves or funds misuse are impossible because of use of multi-signature Bitcoin addresses, which means funds are specifically tied to user wallets and exchange operators cannot use them, because the user has to sign all transactions by himself. [1] https://www.bitalo.com/why_bitalo https://www.bitalo.com/why_bitalo

nadaviv 13y ago
This isn't realistic for an exchange. They have an enormous transaction volume, which is represented as internal/off-chain transaction in an internal accounting system. Using multi-signature transactions requires every fund transfer to be represented as a Bitcoin transaction, which the Bitcoin neAtwork simply can't handle.
- M4v3R 13y ago
  Since we are a P2P exchange, we don't foresee to have more than few dozens transactions per minute when we grow big. I'm sure the Bitcoin network can handle such volume.
  - o_s_m 13y ago
    The protocol can only handle 7 transactions per second.
    - jzwinck 13y ago
      The system is currently configured with a limit of 7 TPS. But the limit can be lifted, according to https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability
cyphunk 13y ago
Why would bitalo ever require users ID themselves or provide bank details? multisignature scheme already adds a latency on transaction. just not clear how this exchange works. Is it P2P where users transact between each others bank accounts. If so the AMA/KYC seems unnecessary.
- jccooper 13y ago
  Legal reasons, almost certainly. I don't know about Finland or Germany or EU specifically, but it seems likely they have "money transmitter" requirements to combat money laundering. I doubt the regulators and/or law know or care much about multi-sig transactions. If they touch money changing hands, they almost certainly have to comply. You can't move money without the government's permission, you know. Very naughty.
- M4v3R 13y ago
  The reason is two-fold. One is legal/regulation stuff, as jccooper said (for seller account especially). Second is seller protection - if a buyer wants to scam sellers, we can blacklist him based on his ID, so he cannot scam anyone again.
hierro 13y ago
Please, don't ever send money nor coins to these guys, they're scammers. M4v3R used to run http://bitmarket.eu http://bitmarket.eu and lost all the users' coins while running some sort of (according to his own words) "hedge fund" around December 2012. Around April 2013, with bitcoin around $50 he "kindly" offered to reimburse everyone over time, valuating each coin at 10€ arguing that it was their value when he lost them. I told them wanted my 10btc, not money, and they still owe me to this day. See https://bitcointalk.org/index.php?topic=134208.0 https://bitcointalk.org/index.php?topic=134208.0

by M4v3R 13y ago

nadaviv 13y ago

This isn't realistic for an exchange. They have an enormous transaction volume, which is represented as internal/off-chain transaction in an internal accounting system. Using multi-signature transactions requires every fund transfer to be represented as a Bitcoin transaction, which the Bitcoin neAtwork simply can't handle.

M4v3R 13y ago
Since we are a P2P exchange, we don't foresee to have more than few dozens transactions per minute when we grow big. I'm sure the Bitcoin network can handle such volume.
- o_s_m 13y ago
  The protocol can only handle 7 transactions per second.
  - jzwinck 13y ago
    The system is currently configured with a limit of 7 TPS. But the limit can be lifted, according to https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability

cyphunk 13y ago

Why would bitalo ever require users ID themselves or provide bank details? multisignature scheme already adds a latency on transaction. just not clear how this exchange works. Is it P2P where users transact between each others bank accounts. If so the AMA/KYC seems unnecessary.

jccooper 13y ago
Legal reasons, almost certainly. I don't know about Finland or Germany or EU specifically, but it seems likely they have "money transmitter" requirements to combat money laundering. I doubt the regulators and/or law know or care much about multi-sig transactions. If they touch money changing hands, they almost certainly have to comply. You can't move money without the government's permission, you know. Very naughty.
M4v3R 13y ago
The reason is two-fold. One is legal/regulation stuff, as jccooper said (for seller account especially). Second is seller protection - if a buyer wants to scam sellers, we can blacklist him based on his ID, so he cannot scam anyone again.

hierro 13y ago

Please, don't ever send money nor coins to these guys, they're scammers. M4v3R used to run http://bitmarket.eu http://bitmarket.eu and lost all the users' coins while running some sort of (according to his own words) "hedge fund" around December 2012. Around April 2013, with bitcoin around $50 he "kindly" offered to reimburse everyone over time, valuating each coin at 10€ arguing that it was their value when he lost them. I told them wanted my 10btc, not money, and they still owe me to this day. See https://bitcointalk.org/index.php?topic=134208.0 https://bitcointalk.org/index.php?topic=134208.0