Friday, December 21, 2012

Set up your own electronic bitcoin exchange using localbitcoins.com!

Today we have added a new escrow feature to localbitcoins.com. This differs from the previous transaction feature by being completely designed only for electronic money transfers and not for physical cash trades.

The service requires that you have bitcoins in your localbitcoins.com wallet before you can start using it. The escrow service is disabled by default, and currently enabled only for selling advertisements.

The service generates reference messages automatically for the buyer, so that doing the trade is very easy for both the seller and buyer. The buyer has just to pay the invoice automatically generated by localbitcoins.com, and the seller must watch his bank/payment service account and release the funds when they are spotted.

Every trade builds up reputation for both participants. We always suggest to be cautious with first timers - in the bitcoin community, bank account hackers sometimes use services like localbitcoins.com to buy bitcoins. Therefore check the reputation of the counterparty when accepting bank transfers. Banks will notice these transfers usually pretty quickly, about in 0-3 days. With new users with no existing trade volume, it is recommended to wait or ask for additional validation before accepting the transfer.

Of course all the existing features of localbitcoins.com are also integrated with the new process, such as messaging, feedback and SMS/email notifications. You can also specify your price using equations, as before. Examples:


  • Sell for market price, but at least 13.5 USD: max(mtgoxUSD_ask, 13.5)
  • Buy always at competitive but fair rate (EUR): min(min(min(mtgoxUSD, bitstampUSD), USD_24h)*USD_in_EUR, EUR_24h)


Read more about the escrow feature from our guide.

For more examples for equations and all parameters, see our cash exchange guide.

We are developing localbitcoins.com constantly forward, and more features will be coming all the time. Stay tuned!

Wednesday, December 19, 2012

Watch out with bank transfers!

For all localbitcoins.com users, be very careful when using bank transfers. Localbitcoins.com hasn't been designed with bank transfers in mind in the first place, so we don't have infrastructure for it. Bank transfers can also be chargebacked/accounts frozen like with paypal or credit cards. There are some people using stolen bank accounts to purchase bitcoins from sellers, on localbitcoins.com

If you are going to sell bitcoins with bank transfers, check the profile/feedback beforehand. Watch out with new users. It doesn't hurt to wait or cancel the deal when unsure.

Sunday, December 2, 2012

SMS messages not delivered in multiple places

Our SMS service provider twilio, for some reason, has stopped receiving incoming SMS's altogether this weekend. We are looking for alternate provider ASAP.

Edit: now we have implemented Nexmo, and added couple of numbers. THis should help with the situation.

The Localbitcoins.com SMS numbers are+15813330250 (CA), +43676800505463 (AT), +442033222117 (GB), +46769436195 (SE), +16466994674 (US)

These are all normal phone numbers, which don't have any special fees attached to them. Sometimes there might be problems delivering the SMS's, in this case you should try a different number. 

Wednesday, November 21, 2012

SMS Service dysfunctioning in Italy

Some operators in Italy don't seem to transmit SMS messages properly to twilio. Please don't rely on the SMS transaction service if you are doing trading in Italy.

We are trying to resolve the problem as soon as possible.

Tuesday, November 20, 2012

Start Your Own Money Press

Physical cash is old and well-working concept. It has a good privacy model, it is relatively anonymous and it is easy and fast to use. Physical cash won't go away anytime soon, because it works so well.

However there are some problems, which might become bigger issues in the future. Central banks are always able to print physical money as much as they want, which will cause devaluation of physical cash for everyone. Additionally, even if you believe in central banks, private entities with skills and resources are able to print cash as well. In fact, there already exists counterfeit cash which even skilled experts can't distinguish from goverment-printed money.

Bitcoin solves effectively the counterfeiting problem, or so called double-spending problem. It also removes nicely the need to trust the central bankers. However, being a virtual currency, using bitcoins is often seen much more difficult than using cash or other traditional payment methods.

One nice concept around Bitcoin is a paper wallet. It allows anyone to store bitcoins on a paper, like physical cash. Unlike physical cash, bitcoin paper wallets aren't suitable for large-scale trade, but they have other useful applications:

  • Getting people introduced to bitcoins, a learning tool
  • Relatively secure way to store bitcoins - generate the paper wallets offline on a computer, print them out, and store them in a bank safe
  • Trade in high-trust environment, such as between friends and family
simplest possible bitcoin bank note
The simplest possible bitcoin bank note contains only the private key. You can derive the corresponding Bitcoin address from the private key. However usually it makes sense to include also the corresponding bitcoin address, to make usability easier.

Other than that, only the sky is the limit. Bitcoin paper wallets come in all sizes and forms, and it is also fairly easy to create your own design. You can store any amount of bitcoins on paper wallet - be it one million bitcoins or 0.00000001 bitcoins (one satoshi). You can also load them as you go - it might be useful to have receiving addresses in your wallet, just in case. You can store the private key somewhere else securely.

The best thing about bitcoin paper wallets is that they are not dependant on any of the running bitcoin services, except the bitcoin network itself. Even if invidual web sites come and go, the Bitcoin network highly probably will stay up and running, and you will be able to redeem your bitcoins even aften waiting 10 years.

Printing your own Bitcoin bank notes

Bitaddress.org provides easy way to print your own bitcoin cash. The steps are:

  1. Start your web browser. Use incognito window or similar.
  2. Go to bitaddress.org
  3. Disconnect your computer from the internet
  4. "Paper Wallet" -> "Print"
  5. Clear browser cache and all private data, restart browser
Tinfoil hats will not be happy with these instructions, therefore I have included extra security cautions in the footnote [1].

After printing, you can apply some kind of tamper-evident sticker on top of the private key. Also one option is to laminate the wallets, as I did - it makes them more durable.

Creating your own custom design

Bitaddress.org is just a static html/javascript page, you can download it to your computer and modify the behaviour to match your requirements. The most obvious thing is to create your own design for the bank note.

This can be done with following steps:

  1. Create your custom artwork with any program such as inkscape or photoshop
  2. Export it to png at 795x430 pixels
  3. Convert the png file to base 64 data
  4. Replace the contents of the img tag, id "papersvg" inside javascript 

You can also replace the site logo (id logo), or localize the site to your own language. Then you can upload the html file to your own server, so anyone can use your design to generate bitcoin paper wallets.

Loading and redeeming paper wallets

Naturally any QR-scanning capable bitcoin wallet app can be used to load the paper wallet. Not all apps can be used to redeem the contents. Our easywallet.org web wallet can be used to sweep the transactions from the private key. It works on iPhone and Android, also with one-tap if configured properly. Easywallet.org doesn't import the private keys, it just sweeps the unspent transactions to the wallet address and after that forgets the private key.

Additional resources and links

https://github.com/salfter/btcnotes/ - beautiful multi-coloured banknotes
https://github.com/kangasbros/skimpybtcnotes - my own take, really minimalistic and small bitcoin bank notes and storage sheets
http://ocantinhodadama.clinicadosom.com/2012/07/20/bitcoin-note-design-psd-file/ - really nice bitcoin paper wallet design as a PSD and SVG file
https://casascius.com/graphnote.zip - other design by casascius
https://bitcointalk.org/index.php?topic=92969.0 - lots of designs and discussion
https://github.com/pointbiz/bitaddress.org - bitaddress.org on github

[1] Extra security cautions for using bitaddress.org:

  • Use linux from USB stick, such as tails (handy amnesiac distro)
  • Don't connect the printer to a internet connected machine - ever (printer manufacturers are controlled by reptilians)
  • Download the file locally and validate the SHA1 checksum provided by the bitaddress.org author
  • Wrap everything in tinfoil

Easywallet.org supports now private key import

Now you can sweep any bitcoin private key easily to Easywallet.org . This is done easily with mobile phone with QR code scanner, especially with the one-tap feature enabled - import the money to your wallet with just one tap.

The feature doesn't import the private key. It just sweeps all the unspent transactions to your wallet. The private key is instantly forgotten by the service after sweeping, and not logged in any way.

The feature doesn't currently support mini private key format, but the support is coming soon.

This allows easy integration with paper wallets. Our favorite tool for generating paper wallets is bitaddress.org.

The fee for the feature is 0.49% of the transaction sum, and the bitcoin network fees.

Thursday, November 15, 2012

Accept Bitcoins On The Restaurant Day


The International Restaurant Day is coming again on next saturday, and hundreds of small restaurants will be popping around the world. The event started from Helsinki, Finland, and has been spreading since then to new countries and cities.

For small-time restaurants, payments are always a problem. Cash is cumbersome, and it is hard to keep enough change for your customers. Accepting credit or debit cards is really expensive, and if you want to set up a temporary restaurant you usually don't want to invest in a credit card terminal.

Bitcoin is nice, because in addition to solving the central banking problem, it also fixes the change money problem, and also it is very easy to accept bitcoin payments. Below I will visit different ways to accept bitcoin payments from your customers.

Easywallet.org - probably quickest and easiest 

All platforms: iPhone, Android, laptops, any device with a web browser

To set up accepting payments, just go to easywallet.org and the service will generate a random web address for you, which is the key to your bitcoins. Bookmark it, and you can start accepting bitcoins. The service supports currency conversions with 24h exchange rate, so you don't need to worry about the exchange rate, and the rate will be fair to both buyer and seller.

From your settings, turn off "Use Static Address". This way the service will generate new address each time you receive payments, allowing you to separate your customers more effectively.

To move your bitcoins elsewhere, you can use QR code scanner on iPhone and Android. You can also send the URL to your email, and handle cashing out from your computer.

Electrum + acceptbit.com

Safe (only receiving), any device with browser, including iPhone, Android and Kindle!

This merchant solution is basic, but it works. Note that this is not a wallet software - it is only for receiving money. You have to pair the web site with an electrum installation.

Android standalone wallets

These are standalone, which means that they store private keys on your device.

BitcoinSpinner - really fast and easy, no block chain download.

Bitcoin Wallet (Schildbach) - oldest and stable. There is block chain download, therefore I can't recommend it to newbies.

Others

Blockchain.info - browser-based, or standalone for Android and jailbroken iPhone. Haven't used it myself, but generally recommended lots in the community.

Electrum - my favourite desktop client. Friendly and instant.

Giving change as bitcoins

You have run out of pocket change and can't give your customer money? Maybe he/she will accept bitcoins. Print some paper wallets from bitaddress.org. When customer requests change, zap change amount worth of bitcoins to a paper, and give the paper to the customer. The customer can cash out his/her bitcoins from his computer at home.

Cashing out bitcoins to euros/dollars/fiat

There are lots of exchanges which allow you to convert your bitcoins to more traditional currencies. My favourite bank transfer-based exchange is bitstamp.net.

However, if you want to spur up the local bitcoin economy, look for a cash dealer at localbitcoins.com - you can also set up your own "selling bitcoins" advertisement, and help local people to get to know bitcoins a little better.

Hope everyone has a great Restaurant Day! If you consider accepting bitcoins and have any questions, send me an email to jeremias.kangas@gmail.com . Feel free to ask anything. Also if you will accept bitcoins on next saturday, give me a note - I can advertise your pop-up restaurant for free :)

Tuesday, November 6, 2012

Localbitcoins.com profit calculator

Want to calculate how much money you would be able to make by being a local trader? One of our users, Julian, has created this great calculator, which can help you estimate it. Thanks Julian!

Link to the spreadsheet

Wednesday, October 24, 2012

Easywallet.org new fee structure

There will be a new a new storage fee for wallets with balance over 12 BTC. The fee will be exactly 0.0335% (0.0335 percent) of the wallet balance, deducted once in a day. For one month (30 days) this equals roughly 1%.

The fee will be effective after 25th november, 2012, 00:00 UTC. For newly created wallets, the fee will be effective immediately.

Note that this affects you only if you store more than 12 BTC in your Easywallet.org wallet.

For storing larger sums of bitcoins, we recommend paper wallets. These can be easily created using bitaddress.org . One of the coming features of easywallet.org will be a better integration with offline paper wallets.

Additionally, because of large amounts of incoming transaction spam, the outgoing transaction fee is raised to 0.003 BTC per transaction. This will also be effective on 25th november.

Our goal with Easywallet.org is to provide the easiest and fastest way to use bitcoins, and to help people to get started with bitcoins.

Saturday, October 6, 2012

Localbitcoins.com transaction feature was down on 06/10, now working again.

We have found a security issue with the localbitcoins.com transaction feature, therefore we had to disable it for certain period.

If you had an ongoing transaction with funds, or if you had bitcoins in your localbitcoins.com wallet, you have to contact us so that we can send you the funds manually.

Easiest way is to contact us through your user account via this ad: <deleted>

If you contact us through that form with your user account, we know that it is you doing the contact.

If you have any questions, you can contact us at support@localbitcoins.com . We try to answer all questions.

We apologize sincerely for this issue to our customers for this issue.

Edit: the issue is fixed and the transaction service should be running again

Friday, October 5, 2012

Easywallet.org users - remember to back up your wallet address!

Several of the following things can happen:

- You lose your phone
- Your phone auto-upgrades itself and loses apps and bookmarks
- Your phone breaks

Therefore it is always important to make a backup of your easywallet.org wallet. You can find the wallet URL as a QR code from the main site if you scroll down. Just store the URL to couple of separate locations, and you should be backed up.

Additionally it is always a good idea to set up a Dead Mans Switch, just in case.

Sunday, September 30, 2012

One-Tap Bitcoin Payments with Easywallet.org

Mobile payments can't get much easier & faster!

We made a new feature to easywallet.org, one-tap payments to any bitcoin address. Accepts normal bitcoin URIs. Really easy and fast way to pay small amounts in restaurants etc.

The feature can be also used to redeem private keys, and easywallet.org coupons.

The test videos:
iPod touch: 13,5 sec (unlock + tap + scan + confirm)
Android Samsung galaxy S3: 9 sec (tap + scan + confirm)



To activate the feature for your mobile: go to your easywallet.org page, scroll down and click "one-tap payment url". Bookmark this page, the icon will act as "one-tap" payment solution.

Saturday, September 29, 2012

Dead Man's Switch with Easywallet.org

We have added a Dead Man's Switch feature to our easywallet.org . This is very useful feature for couple of applications:

  • Setting up "backup address" to your significant other, in case you lose your wallet URL in a way or other.
  • Making timed, anonymous transfers to different bitcoin addresses.
It is good idea to set up the Dead Man's switch just in case, because there isn't any fees if the feature doesn't activate.

SMS messages not transfering from TeliaSonera

We are sorry to inform that TeliaSonera isn't proberly sending text messages to our twilio numbers.

... text messages, how many bytes they were again?

Wednesday, September 19, 2012

LocalBitcoins.com designer portfolio

As a startup, we really approve the quality work our designer has been able to provide us. Therefore we want to promote her recently published portfolio:

http://marihuotari.blogspot.fi/

She is available for hire, and accepts bitcoins!

Tuesday, September 18, 2012

Easywallet.org bug fixed! Incoming transactions working again.

Hi, there was a small bug today in easywallet.org for about 1.5 hours - incoming transactions were not properly processed. The problem is now fixed.

The following problems could be caused by this:

- Erronous balance change updates (the blue boxes)
- Erronous wallet history - one transaction showing as multiple

No actual erronous balances, double spending or any other serious bugs could be done using this bug.

Sorry for the issue.

Thursday, August 16, 2012

LocalBitcoins Escrow service rebranded to "LocalBitcoins Transaction" or short "Transaction"

We have changed the name of the escrow feature to "LocalBitcoins Transaction" or just "Transaction" where the connection is obvious. We changed the name because it is not actually escrow service by the traditional definition, no disputes or resolution services.

Other terms: 


"Transaction verify code": this is generated for the buyer. When the seller shows this code to the buyer, buyer can be 100% that funds have been released. The buyer should check that the code shown by the seller matches the code shown by localbitcoins.com
"Transaction release code": the seller can release the escrow by sending this code to the number +16466994674 . This releases the funds to the buyer, and the seller should receive the verify code promptly, which he/she can show to the buyer.


The benefits of the service are:

- No internet connection needed - only one SMS-enabled phone required to make the transaction on the spot, or only one internet-connected laptop
- Quick process - the buyer does neet any devices, just memorize/write down the transaction verify code
- Allows the users to gain reputation via confirmed trades. If users use this service, we have a way to confirm that trade actually happened.

The LocalBitcoins Transaction service is not enforced in any way. You are free to create any kind of deal with the customer, use smartphone clients, laptops, whatever. We just recommend to use the transaction feature when the customer requests it - it should make the process much easier to the buyer. 

Monday, August 13, 2012

Bitcoin cash exchangers already in 60 countries, almost 200 cities!

We are really happy with the global reach localbitcoins.com has achieved in the short time we have been developing the site. It is nice to see, that we have advertisers now from even countries such as Ghana, Malaysia, Venezuela and Cambodia, where Bitcoin could be really useful.

We made a simple statistics page, where we collect up-to-date statistics from localbitcoins.com:  https://localbitcoins.com/statistics

We are very excited with the positive feedback we have received for the site, and we are working on new features full time. This week our goal is to make the site translation-ready, so we can start making the site more useful for people from non-english countries as well.

Thursday, August 9, 2012

LocalBitcoins Transactions via SMS - buy and sell bitcoins with cash, hassle-free and fast without internet connection

EDIT 16.8: Please note that we rebranded the service from "escrow" to "LocalBitcoins Transaction" or short "Transaction". This is because the service is not actually an escrow service. It is just a tool to make the exchange process easier.

Cash is a perfect method for buying and selling bitcoins. Paypal and credit cards have chargebacks, and are practically unusable for bitcoin transactions. Bank transfers are slow, and take away your privacy by enabling the bank to see all your transactions.

However there are lots of hurdles when trying to enable local bitcoin-to-cash transactions. What kind of devices you want to use, what kind of internet connection, how many confirmations should you wait, and so on. We try to remove all these hurdles with our SMS-based bitcoin escrow service. Only the seller needs sms-enabled phone, and the buyer doesn't need phone at all! So even internet connection isn't needed at the meeting point.

The process for the buyer is following:
  1. Make offer/receive offer
  2. Memorize or write down the escrow verify code
  3. Bring the cash to agreed location
  4. When seller shows you the escrow verify code, you can be sure that the funds have been transfered to you
For the seller the process is almost as easy:
  1. Receive offer/make offer
  2. Write down the escrow release code and phone number as a SMS message, don't send yet
  3. When the buyer brings you the cash, send the release code as SMS
  4. You should receive the verify code as a SMS, which you can show to the buyer
The SMS should work 99,99% of the time - we have two different backends, so that if one fails, we will use the other. Also we have enabled the SMS messages in 150 countries - you should be able to use this process practically anywhere in the world.

If there are some problems, you can always head to the nearest internet cafe, and check the situation online. However, we are pretty confident, that practically in all cases the SMS escrow process should work easily, and the transaction time could be less than a minute.

Also if the seller works for at example internet cafe, even the sms sending is not needed - you can just release the escrow online, and you will receive the code with you can prove that the escrow has been released.

Here are couple funny visualizations of the process (however note that since these, the process has been simplified):

Seller:

Buyer:


Wednesday, August 8, 2012

Specify your price with min/max functions

Now it is even easier to minimize your risk when selling/buying bitcoins on localbitcoins.com, while still giving a competitive price. We added possibility for min/max -functions. For example, the following equation gives pretty competitive price when you want to sell in EUR:

max(max(mtgoxusd_high*USD_in_EUR, EUR_24h), intrsngeur_high)

Or if you want to buy in USD:

min(mtgoxusd_bid, USD_24h)

Not that these functions always require excatly two parameters.

We hope that with these advanced pricing functions people are more comfortable doing bitcoin OTC trades, with fixed prices.

Saturday, August 4, 2012

Now you can connect your bitcoin-otc ratings to your localbitcoins.com profile

We just have made it possible to connect your bitcoin-otc account to your localbitcoins.com profile. Only the bitcoin address authentication support is currently enabled. However, it is trivial to add a bitcoinaddress to your bitcoin-otc profile.

If you already are authenticated on bitcoin-otc using bitcoin address, just go to your localbitcoins.com profile and follow the instructions. It should me less than 5 minute process, if you are using the standard bitcoin client.

If you are using only gpg authentication, you can easily enable bitcoin address based authentication with the following commands to the gribble bot:

;;changeaddress 
<get the signature from your bitcoin client>
;;bcverify 


After adding the bitcoin address, just go to your localbitcoins profile and follow the instructions. Essentially you sign the message provided by localbitcoins.com, and via that action you can prove that you are have the access to the specified bitcoin-otc profile.

Why to connect your bitcoin-otc profile to localbitcoins, then? You get all your bitcoin-otc feedback listed in your localbitcoins.com profile, which will add your credibility. Also you will get some nice badge to your listings in the future (we haven't yet implemented this).

Saturday, July 28, 2012

Localbitcoins.com and Easywallet.org on Assembly Summer, 2012!

We will be presenting Localbitcoins.com and Easywallet.org at Assembly Summer, 2012! If you have any questions, feedback or comments, you can come to speak at us.

We will be sharing a stand with bittiraha.fi: More info at bittiraha.fi

Also, there is a more general bitcoin meeting, which everyone can attend (also those without tickets).

Time: 4 PM local time, Friday 2nd of August. Meeting lasts for 2 hours.
Place: Outside Assembly main doors. Hopefully the weather is good.

See you there!

Blog launched!

Here we will release information related to bitcoin services launched by us. Currently we run localbitcoins.com and easywallet.org

We are couple of guys, who are very excited about bitcoin and the possibilities it enables: hassle-free, low-cost money transfer over the world in a blink of an eye.