Bitcoin Forum

I had a quick question,  why is instawallet and mybitcoin listed there but not flexcoin.com ?

http://www.weusecoins.com/getting-started.php

probably because it smells of scam like a week-old open can of sardines left in the street smells of rotten fish.

first bitcoin bank? false, mybitcoin was first, and others later.

pay interest? using funds coming from where? possibilities: other people's accounts (ponzi scheme); lending out people's deposits (fractional reserve without insurance - just wait for that first bank run); founders actually handing out their own money (yea right).

Scam?   I own Yooter and Yooter owns Flexcoin...   so you're calling me a scammer?     Mybitcoin is not the first bank.. it's maybe the first online wallet.. ...  where does mybitcoin pay interest like a bank?  or have bank like features?    It's an online bitcoin client..  kudos for that.. but bank.. no interest,  no bank.    Flexcoin is the first bitcoin bank.

Flexcoin pays interest from mining and some transaction fees.  But that's great to hear people like you call it a scam...    granted your personal attacks are not justified...  (in fact they are completely off and wrong)  but the positives I can get from it is that you want how flexcoin earns income clearly labled so you can get some trust into it.

If I open a Chase checking account and it doesn't pay me interest, does that mean Chase is not a bank?  That's a pretty silly definition of a bank that I don't think is going to go over well with too many people.

the number of people that use it proves otherwise...  all the invites were used within the first day.     We're slow on inviting people because honestly I am more concerned with security than anything else...      but look I am here to stay..   it's not like I am not contributing to the community...

http://forum.bitcoin.org/index.php?topic=26527.0;topicseen

clearly I started the counter-attack on one of the first legal attacks on bitcoins.

 

Hello, I run the search engine for that page!

Flex Coin is in there. There was a bug in the code that is being fixed.

If you do a search for flexcoin and scroll down to the bottom you will see it. Essentially the search results are flipped, and this will be fixed by tomorrow.

I appreciate your patience in this.

you rock man.. thanks!

Nobody should prejudge flexcoin.com without some hard facts about fraudulent activity!

@the founder: you surely could help building trust in your site by openly declaring your business practices and plans. I know you offered some scattered information in various threads but you could gain much from being more upfront with this issue. Have a look at the introduction thread from TradeHill (https://forum.bitcoin.org/index.php?topic=19537.0) for a good example.

With Bitcoin relieving us from the trust issue in the payment processing itself, it shifts all the trust concerns towards the merchants / service providers. Please be aware of that - especially when you want people to entrust their money to you.

Having said that, I really wish you all the best with your site!

That makes sense...  i'll publish the business model on the site over the weekend...  that way everyone can explore it and see that it would make more sense for us to run it as a legitimate business rather than "scam"  people.. because clearly there are 2 things on people's mind.

1 - security (reminded by mtgox)
2 - valid business (stability)

That's it...  everything else is minor compared to those two it appears.

i said that it /smells/ like a scam, given the information that i see on the site. i was not calling you a scammer, since i didn't even know who owns that site (now i know it's you).

re: my claims:

paying interest is not a necessary precondition for calling something a bank (this was addressed in a post above already), therefore i stand by my assertion that your claim of being the 'first bitcoin bank' is false. feel free to check out http://en.wikipedia.org/wiki/Bank . a bank is a financial intermediary - which mybitcoin (and any ewallet before it) is.

further - "paying interest" is done by "normal banks" by lending out deposits at interest. you did not state where you get the funds for paying interest. so it was certainly a natural assumption that you are not in fact handing out free money.

if you're paying interest out of your own mining output... well good for you, i wonder how long until you get tired of handing out money for free. any business whose model is to hand out free money for nothing doesn't last long.

if you want your site to stop smelling like a scam (at least in my eyes - but probably in many reasonable people's eyes as well), i would suggest to stop making false claims, and to describe your business model so that it is clear where 'interest' is coming from, and how you are (or plan to) actually be profitable running this enterprise in the long term. (hint: handing out free money and making it up in volume is probably not going to work :) ).

I agree.  As stated on the bitcoin.org website:

"Within the Bitcoin community, many are very careful with their security and identity. This is primarily for two reasons:
* There is no violent body to cover your back for you, or, more simply, there are no courts to seek assistance from if your transaction sours.
* One’s reputation is the most important thing that any user has; traders will take very little risk with new users who have not proven themselves (as they could just be last week’s scammer with a new identity)"

As stated, if I send you BTC, it's yours.  There is NO WAY I can get it back.  There's no filing a dispute.  Therefore, I have to totally trust you.  You have to give me reason to trust you.

For this reason, many on these boards are very quick to cry "scammer!".  Maybe too quick, but you can see the reasons.

That said, we need a BTC bank.  So I want to trust you.  I look forward to your posts this weekend.

The issue that caused this original thread has been resolved!

The search results were coming in upside-down, so when people typed in their own website in the search-box they would see their website last.

If the search results are still upside then clear your browsers cache - otherwise the old code will run.

The guys at www.weusecoins.com are really awesome for beta testing my API. And the search results will be passed along to the bitcoin stores so that they know what to sell !

Ok the site has been updated with far more information.. everything from the TOS to privacy policy has been posted...  more invites have gone out today.. and we might even be opening up for general registration in a short as 72 hours.   Honestly the demand has been slightly overwhelming because evidently there's a land rush for flexcoin id's...  

Most likely what's causing the spike :  
http://www.flexcoin.com/?page_id=103

This is the TOS :
http://www.flexcoin.com/?page_id=118  

This is the updated FAQ  :
http://www.flexcoin.com/?page_id=15

Privacy and Security page:
http://www.flexcoin.com/?page_id=22


I think you'll have a much better idea of it's sustainability and business model now...  hopefully this will put to rest any questions

Bumping an old question. Would the weusecoins please consider a link to My Wallet (https://blockchain.info/wallet) on the Getting started page? What are the criteria for approval?

First criteria isn't to necro some barely related thread.
Create new thread (and possibly link to old thread).

I don't think flexcoin should be listed on the getting started page. It is a bank, not a wallet service. It is way too complicated for a new user, and I have no idea where private keys are being stored, but I am guessing on their server. This could be the same as replacing one scam hacked server (mybitcoin) with another.

Instawallet, strongcoin, My Wallet, android wallet, and other services that focus on open source and not storing private keys with some operator is important.

I have to say I strongly disagree.....   

1 - we're not mybitcoin ... there's no mystery on who runs it.
2 - we have an operational history that has proven to be reliable.

Explain to me how instawallet is different from flexcoin in terms of where the wallet is located?  Because you vouched for one,  but an identical one you dismiss.

Hmmm...

My username is SgtSpike, but it appears as though someone already registered as SgtSpike on flexcoin.  It's not me, because both of my emails come back with an error when I try to recover my password.

Ideas?  I have a feeling that anyone who registered as SgtSpike who wasn't me probably has malicious intentions in mind...

You are right, after reading through their faq, it seems like instawallet should be taken off the list as they too store private keys on their server. It is a shame as they make it so darn easy to use their service.

I point people all of the time to weusecoins.com to educate and get people started on bitcoins. I don't want new user's faith in the system to be destroyed due to your server getting hacked. It doesn't matter if your identity is known. The legal system doesn't seem set up to protect users and the liability you might face if you defraud or just fail to protect user's coins seems to be limited to a tarnished reputation.

As a community we can never forget mybitcoin. Someone made off with a lot of money, and no one was ever caught. Heck the person that most likely committed the crime is practically the face of bitcoin with his video series.

Assuming we have 100% faith in your moral caliber:
Do you believe that your system is uncrackable? Keep in mind, your server is a vault with money in it. Digital money that can be taken away and never found again in a heart-beat. I wouldn't put that much faith in a wordpress driven site on a LAMP stack.

New users need to be directed to a system that can't be abused and doesn't represent a honey pot for hackers.

By that measure all bitcoin related sites,  such as Mt. Gox,  Installwallet,  Tradehill and Flexcoin fall under the notion that the only safe server is one that is completely unplugged and bricked.   

We had a huge uphill battle in terms of trust due to the thieves at Mybitcoin but I have to stress that if we as a community go that route there would be no such thing as a bitcoin related site,  ewallet,  or exchange... as all of them would require some sort of centralization in order to function.

I do disagree with your opinion,  HOWEVER I do understand where you are coming from.

I never had coins at mybitcoin,  but I felt the pain for months afterwards as people wouldn't trust any ewallet due to what happened.

Call me crazy-paranoid, but I don't use Mt. Gox and I don't direct new users to them. With the errors I have seen them commit and the time they were cracked, I suspect they have less bitcoins then their db have recorded for their users (unless their profits have been big enough to fill in the gap). Who knows what really happened that one day when someone cleaned their clock and they had to "roll back" trades. They push around huge lumps of coins that suggest the whole operation has a decent manual aspect to it, and coins probably get "lost."  I wonder what would happen if everyone withdrew all of their BTC from gox in one day. Would there be a run on the bank?

Anyway, sorry to get off track on my tirade.

I don't trust any service to store the private keys of my wallet, and it would be wrong to tell a new user who knows nothing about bitcoin or past mistakes to trust any of these services. Especially since there are ones out there that do not store your password on their servers (strongcoin, my wallet, and android wallet).

Centralized private key storage is a bad idea and gives a huge incentive to hackers and the owners of said services to walk off with potentially hundreds of thousands of dollars worth of bitcoins.

Your faith in your own security makes me feel you have not dealt with actual cyber attacks yourself. And hell, if you have a few hundred thousand dollars of bitcoins on a server that you control, there are brute force techniques that are much older than computers that would be effective in getting your server password off of you. Bitcoin is being adopted by the criminal underworld and they will know where you live.

Sorry if that sounds a little too threatening, but it is the reason I would be careful in setting up an ewallet service (and I have considered this all myself at one point).

Centralized storage may be a bad idea, but is there any way around it?  I can't see any way for an exchange to exist without an escrow party (or a lot of scamming without escrow).  Escrow means centralized.  I mean, perhaps the escrow could simply act as such after a trade is booked (i.e., both parties send their funds to the escrow, to then be redistributed to the parties), but that introduces a TON of lag time with trades, which is just asking for problems.

So, what is the solution?  I really don't see any besides centralized storage.

An exchange can't get around it as far as I can see. This is why you should only keep coins in the exchange for a limited time while doing an exchange. Get them back to the safety of your wallet once you are done.

Your wallet should be the safe place for coins, and an ewallet provider should not be trusted with plain text private keys. Ever. It would be the same as everyone in a city giving a homeless man their cash to hold onto in a cardboard box that he occasionally might walk away from (but his cat will watch it for him). If it disappears, either he made off with it, his cat made off with it, or someone got around his perfect security (duct tape). No one will ever know what happened.

I agree completely.  I have never kept more of a balance in MtGox than I need to to conduct the trading I wish to conduct.

An exchange "could" be partially decentralized.  The handling of fiat money would need to be centralized however that authority could issue tokens to represent a promise to repay in fiat currency.  Once tokenized the rest of exchange could be handled in a decentralized manner.

For example say an entity created a crypto digital token which stored USD and could be transfered from party to party.  You deposit $500 USD and they issue you an address with 500 USDCoins.  Each coin represents a promise to repay $1 USD. 

Now with these tokens and contracts in block chain you could build a decentralized exchange.  For example to execute a trade you would transfer Bitcoins to an address of the seller and they would transfer a certain number of USDCoins to your USDCoin address.  To cashout you would redeem them at the issuing authority or use some third party who would offer alternative payout methods.

Where the digital space and meatspace boundry connect there will always be the need for a trusted third party but one could limit the extent of that trusted third party.