Bitcoin Forum

EDIT: I've added some coins to the balance (I expect many more before the end of the week), and the limits are increased faster with each purchase. In order to avoid problems with Paypal you will see that the expression "Buy BTC" is omitted. Instead of that, the user pays to enter the "Hall of Fame", where the Bitcoin will be shown with a link to the transaction (Blockexplorer). This is just a measure to defend agains fraudulent chargebacks.

---- Now the original post ;-)

I have finished my electronic Bitcoin store, which accepts payments through Paypal. In order to keep away scammers and stay in business I have implemented some security measures to avoid fraud. I believe that succeeding in distributing Bitcoins through Paypal will enormously help to spread this e-currency, and thus the battle against scammers is worth waging*.

What Bitcoin Faucet do is admirable (they give something for nothing!), but naturally now it's mostly dried up (it gave me 0.02 BTC last week, and one cannot do much with such a small amount and transaction fees). My service is mainly (but not exclusively) for people who, like me, wanted to check how Bitcoin works but do not feel very confortable with wire transfers, specially for amounts of $10.

I have tested it in the Paypal sandbox and it seems to work fine. But I could not test it with actual Paypal since I cannot purchase anything being sold with the same account. It should work, but it is not 100% sure (the worst it can happen is an error message BEFORE the payment). So, I kindly ask you to be the testers of this service. As a compensation, the prices are noticeably lower than the market prices. I am losing money with each transfer, so if you decide to test it, please give me some feedback ;-)

All the procedure should be completely automated, anyway, I will stay alert to the database and my email, if some of you have problems.

I would really appreciate your feedback in some aspects:

   1) About your answer to the hypothetical question: "If I were a scammer, how could I bypass these security measures"?
   2) Your view on the limit of BTC per user per day (the limit increases with the number of purchases).
   3) Of course, if you had any problems.
      

So I invite you to try the service at http://www.donotcompare.com (http://www.donotcompare.com) and make purchases ;-)


E.


*I don't think we should blame Paypal for being afraid of scammers, I'm sure I would do the same if I were in their place. Their business is to handle payments, not to close successful stores. Of course, if they feel risk, they go out (after all it's our business, not theirs). My approach is to be to be as transparent as possible, explaining the user what is he paying for and what he acknowledge to accept as proof of delivery. In addition, in the paypal transaction will be written the address of destination.


P.S.:If you want to make a donation, please do it to this address 1F2xS8PuygQjjy3gSCy3ikSgfsZNQp5QeY (the balance will be automatically updated in some minutes).
The reason why I do not put $1 = 1 BTC is to (a) avoid running out of coins too fast and (b) to paid somehow the server and the SMS gateway. At this stage I am no earning money with the service. Not during the BETA stage and not, of course, with your donations.

id be extremely surprised if anyone on this forum backs ur idea of using paypal. paypal is like that word u whisper around here. lol. i seriously believe the best way to help our beloved bitcoin is to create an ebay type site backed by mtgox. your best bet is get a dwolla account set up at account with mtgox and transfer sales from mtgox to dwolla and dwolla to ur bank. until someone has a more safe method.... then ehhhh...

Your not going to stay in business very long selling bitcoins at nearly 40% discount.

Wat?
6 seconds to calculate the hashes of all the phone numbers containing 6 digits
-> 60000s < 20h to calculate the hashes of all the phone numbers containing 10 digits

And this only on a CPU, imagine on a GPU...

Thanks for your answers!


for the buyer Paypal is the safest option. They can give a try, since the chargeback option is always possible.


it's just during the BETA. In this way you will be more understanding in case of delay. As I said, consider this as a 'premium' for testing the service


Good point. Even though this is only to protect the database in case it's compromised, I am implementing encryption of the hash. Anyway, after the number is hashed, encrypted and clearly stated in the main page that it will not be used, consider that nobody is interested in a bunch of numbers with no other personal information. It is as useful as generating random phone numbers. Anyway, I am going to encrypt the hash.

I dont get how you can afford to sell them soo cheap...

exactly. rule of thumb. if it sounds too good to be true. it is.

I see as this is a beta you don't have a nice layout. But Not having a good layout may put off certain customers (like me).
It really proves how professional you can be.

(On a side-note, I'm willing to do a custom css+html (javascript optional) design for you, in bitcoin or paypal  ;D )

I guess I gave too much information in the main post and the core aspects were not remarked enough. During the BETA stage, while the backend is being tested (the integration with Paypal and the SMS gateway, the database, etc.) I am offering Bitcoins below their market price. This is to stimulate potential buyers and to make them more understanding with potential issues or delays.

This measure had a side effect I hadn't foreseen; people will think that it's too good to be true, and since they cannot explain where is my business model. My business model is, once the infrastucture has proven to be solid, go to production mode, and then sell Bitcoins at a higher pricer. But for now I consider it as another expense, like the server or the SMS gateway. (see that there are less than 1 BTC to sell).

This service had existed for some time, for example http://www.btcnow.net or http://1209k.com/bitcoin, and it was precisely because they were not working (they have sold all their Bitcoins and are waiting to check the fraud rate) that I've decided to implement my own, and automatizing it as much as possible. In addition, I am doing it as transparent as possible, in order to protect agains fraudulent chargebacks.


Sure the layout is important, but again, I think users will accept simpler designs and an efficient service (of course they would love an efficient service with a lovely design ;-) but for the moment this is not a priority). Paypal should give the user the confidence that "satisfied or you money back".

I'll give an example of what I mean:
http://www.bordercolliebes.net/
Simple. Small. Easy.

I can send you the blank html, the css and js now if you want.

I cannot emphasize enough that layout MUST be a priority, it'll surely put off several people.

I am going to be selling some Physical Bitcoins pretty soon... coins with embedded private keys.  So it's a real coin with an engraved face value of "1 BITCOIN" and actually contains a private key embedded inside worth one digital bitcoin.

They might be PayPal worthy - after all, people sell gold coins on PayPal all the time.  I wonder how what PayPal would do in the event of chargeback if I sold physical bitcoins on eBay and shipped them with tracking and signature confirmation to the PayPal user's verified address.  I am told by someone who sells goods on eBay all the time that PayPal is favorable to the seller under those circumstances.

I tried to purchase the max (.1 BTC) just now and when I click "Get PIN" nothing happens. Ive tried a couple times now and still nothing on my phone ...

Are you talking about Bitbills (bitbills.com)?
I have been thinking about it before starting this project, but I finally decided not to do so for several reasons (I write as if I were a potential buyer):
  - If I bought a bitcoin and I have to wait until it arrives, I can also go to the bank and make a wire transfer. It can even be faster.

  - Once you have the physical coin, it's not easy to make it digital again (sure there are tutorials, but it is far more complicated that a common electronic transfer).

  - The buyer can still say that the bitcoin was fake, and you have no way to prove it is not true.

  - In case you are not talking about bitbills, nothing prevents the buyer to keep a copy of the private key (in case of bitbill they claim that the card becomes useless after the private key has been read. Well, it's a matter of trust).

Those are the drawbacks I have found before starting such a business. I'm almost sure you have thought about them and many others, but just in case it could help you to find solutions!


I really appreciate your enthusiasm and I share your idea, but at this stage of the project I cannot allocate money to the layout. With 'not a priority' I meant during the BETA stage, before it start to generate money (if it does). Anyway, times passes fast in this world and if it succeeds, after some days running, layout will be the first thing I will tackle.



Hmm, interesting, in the DB says it has been sent. Did you write your number in the international format, without 00 and without the +? Anyway, I'm sending your PIN by private message in order to to allow you finish the purchase. Oh, by the way, can you tell me if your SMS finally arrives? Thanks!

I got the PM and was able to complete the order, but never got the SMS.

Nope, I'm talking about the 100+ lbs of brass Bitcoins I have here that will be offered for sale as real bitcoins once I receive a shipment of custom Casascius bitcoin security holograms I am waiting on!


The buyer sacrifices the ability to do a chargeback and the comfort of ordering online.  There's also the wire transfer fee.  That will be fine for many buyers (myself included - wires work well for me).  But Grandma might prefer the physical coins.


I am hoping that some website (TradeHill etc.) will soon offer the instant ability to type in a private key code and redeem bitcoins.

In both cases you have to rip the card/coin open, so it becomes pretty obvious that it has been mutilated.

Those are the drawbacks I have found before starting such a business. I'm almost sure you have thought about them and many others, but just in case it could help you to find solutions!

I had to wait an hour before I got my confirmation SMS, and now the site seems to be down.

The site is a dead link, no-one can even look at it until it is fixed.

In some cases the SMS takes more time than usual. Once the server is up again I'll provide you a link to let you check if the SMS gateway does not understand the format, does not support the country or it's just slow delivering SMS's.
The server appears to be down. I'm handling that right now with the technical support. Once the server is up again your PIN will still be valid.

Anyway, for those who the SMS arrived and made the payment, the coins have been sent.

Thanks for your patience



I see that you have thought about the main problems. Good luck! But just one more thing. Imagine the following scenario:

The Paypal fraud responsible receives an chargeback request from a buyer who claims that the seller sent him a physical bitcoin, but when he opened it and tried to recover the funds, it was empty (or there were less than half the advertised funds). On the other hand, the seller claims that the card was unmodified and that the buyer is trying to scam him. How could the person in charge of fraud prevention at Paypal find out who is right?

The server is online again. The PIN you received is still valid. In case you didn't receive it or you want to ask for a different one, please write me a PM with the SHA1 of you mobile phone http://www.tools4noobs.com/online_php_functions/sha1 (http://www.tools4noobs.com/online_php_functions/sha1) and I will provide you with the PIN (or allow you to ask for a different one).


Although when you click "Get PIN" you should see a message saying "PIN sent" or "Invalid number", maybe your browser has javascript blocked, and thus you see nothing. In that case, and to be sure you number is accepted by the SMS Gateway, visit this link http://www.donotcompare.com/btc/existsNumber.php (http://www.donotcompare.com/btc/existsNumber.php)

Site's up and I got my BTC! Great service, when it works.

I used my country code in front of my number and then everything worked great. Looking forward to this system leaving the beta stage so I can purchase higher amounts!  :)

At this moment I am negotiating with Paypal and Moneybookers the conditions. I expect to reach a conclusion soon and start in production mode. These will be the features:

 - An initial limit higher than 10 cBTC (slightly higher)
 - Faster limit increase with purchases
 - Prices slightly higher than market
 - More coins to sell
 - Daily limit on PINs sent (so please make sure you write your number correctly).

And of course a better layout ^_^

Thanks for your testing and I invite you to keep using the BETA!

Careful though.. I've heard several occasions where Paypal blocked an account for btc trading.

Great service - ordered 0.1 BTC and within 15 minutes was in my wallet!
Easy to use and quick. A+

excellent service

why you identify by phone ?
isn't receive address unique enough for it ?

Also, you can hash not phone itself but some constant text + phone
thus leaking only db won't harm anyone

Been waiting for my pin for a while now and still haven't received it..

In some cases it takes some time to arrive. Please make sure that the number you wrote is properly detected at http://www.donotcompare.com/btc/existsNumber.php (http://www.donotcompare.com/btc/existsNumber.php)


The identification by phone is to identify unique users. When a scammer makes a chargeback, it more effective to block his access by his phone number (he might have several phones, but a limited number after all) rather than by his bitcoin address (which can -and should- vary with each purchase), or even his IP.
When I pass from the BETA state to the production mode, phone numbers will be encrypted with a secret key.


In order to better fit the policy of Paypal and to avoid a fraud rate too high I am implementing an automated deliver of a physical good to the user's Paypal address. Which object to choose is not obvious, since I has to comply with the following:
  - It has to be cheap, in order to avoid increasing the price too much
  - It can be sent cheapily worldwide
  - It can only be delivered in case I have sent the Bitcoins
  - The user doesn't need it to cash his coins (i.e. the transaction will still be instantaneous)
  - It has to prove that the coins were sent, even to a person with no knowledge of Bitcoin and no mathematical background.
  - If a scammer uses the system he would not want that object to be delivered to the real owner's address.
  - The user has no way to forge the object, and to say that what he received was not what he expected.

Many criteria but I think I got it. I will also avoid sending the PIN at each purchase. It is expensive for me and a source of troubles for users.

In matter of days I expect to have the BETA2 ready. Thanks again for your support!

Its showing me like this:

Current* price: 1 BTC = $ 6.986

Current Bitcoins available: BTC

Are there no bitcoins available currently?

That happens when it cannot retrieve the balance from the wallet, but it seems to be working fine here. Try Ctrl+F5 to reconnect with the server.
There are 0.3445 BTC available at the moment

Got 0.1 BTC real quick :)
When will actual system come into place?

+1

So you will have access to phone number + address + bitcoin address?
You must be kidding!

Why do you care if someone has your phone number, a PUBLIC address, and a physical address? What's he going to do? Give you more money? Send you something? Call you for a nice chat? Madness!

Yeahhh sure no problem
Care to share your phone number + address?

Not at all. That would be a hell with data privacy strict regulations. I'll just tell Paypal to send the item to the address of the user's Paypal profile, and thus I won't even see it. I'm going to start with it tomorrow morning. If it is not possible I'll find a workaround, but I don't consider handling private data, at least in a near future.

I understand your point, but well, there are very strict regulations concerning the storage and use of personal data (database encrypted and the people who has access to the key must be identified, a in-depth terms of service explaining what I will do with that, provide a way to access, modify and rectify your data, etc.). Of course, if in a future it is required to decrease the scam ratio, it may be a solution, but at this stage of the process I prefer not to deal with sensitive data.

When I have the new BETA version I'll upload it with another coin (or a little more). It should be matter of days.

worked smoothely 20 minutes, and 0 confirmations just apperared. hope u don´t do a doublespending XD promise i won´t do a chargeback. nice for testing purposes. less then a per mill of my first paypal BTC purchase through bitcoinmarket, back when it was still up, but hope the limits will be raised sonn.

I enter it in there and it says "Found!"

When it founds a number it says from which country it thinks it is. Make sure that the country listed is correct. If not, put the county code without the '00' and without '+'

Well I finally got the pin - it took about 5 hours though!

I haven't read the entire topic so I might be repeating someone, but, OP, are you aware that Paypal has already explicitly forbidden the use of their platform for bitcoin selling/purchases?

Search these forums for CoinPal. The guy had successfully made two sites, one for selling and another for buying bitcoins with paypal, which were resisting frauds. Until Paypal froze his account.

You'll have the same fate, unless you make something that Paypal itself can't track, what wouldn't be easy. If you really want to go that way, you might be interested in reading this: http://bitcoinweekly.com/articles/anonymous-money-needs-an-anonymous-exchange (replace bank account by paypal account).

The second version is now ready. I invite you to continue testing  ;) http://btc.donotcompare.com
This time, once you have the PIN sent, it will be the same for future purchases.
Since the backend is mostly the same as the previous version, now prices are closer to the market (still a bit lower).

For those who have already bought coins, can you tell me if the Paypal interface was all the time in English?


I don't think Paypal has explicity forbidden the sell of Bitcoin. They forbid the currency exchange, and whether Bitcoin is a currency is still subject of debate. I am aware of the actions against Coinpal and I am being as cautious as possible in order to avoid the same fate. This is why I implemented my own system of identification and I set limits on the purchases.

Thaks for the article, it's very interesting. But I hope it won't get that bad to need that:
That is the opposite of what I am trying to do, be as transparent as possible.

The interface of paypal was not english.
edit: it arrived

1. i suggest you disable Sent Pin button after it pressed. I almost pressed it again since there is no HUGE CENTER SCREEN RED message "pin sent" ..

2. the first PP screen (one that asks for login / password) not in english (spanish?). It may scary some people who might think it is fishing site. After login it is on my local language.

3. This time btc's arrived in my client just after i pressed Pay in PP. Previous time it took 5 hours between your confirmation and actual arrive (actualy, may be i just got REALLY lucky this time :) )

4. Just to confirm: all next excahnges should be done with the PIN i just got ? no need to press Get PIn again for me ?(As long as i use seme phone number sure).

Don't worry for that, it just sends one SMS. On the second click it will say "Your PIN has already been sent"

I changed the language in my Paypal account, and now in the tests the whole process seems to be in English. Tell me if the language keeps changing.

5 hours??! Wow, thanks for your patience, really  ;)  When I receive the payment notification I often check if the balance has decreased, and it has. Sometimes it takes a while for the receiver to see its balance increased (it happens to me when I move money between wallets). But still, 5 hours... it must have been an exceptional case...

Correct, but anyway if you tried to ask for a new PIN you'll see the message "Your PIN has already been sent. Use the same of your last purchase. If you did not receive it, please contact me".

Thanks for your commentaries!

>>5 hours??! Wow, thanks for your patience, really  ;)  When I receive the payment notification I often check if the
>> balance has decreased, and it has. Sometimes it takes a while for the receiver to see its balance increased (it
>> happens to me when I move money between wallets). But still, 5 hours... it must have been an exceptional case.

well, i just checked my transfers from deepbit -- 1h 30min average between DeepBit Payment tab time and my client time.

in dontcompare's case PP payment were at 25.08.2011 23:35:37 UTC+3
and client lists transaction as Date: 8/26/11 06:57 UTC+3
block explorer lists that transaction as: 2011-08-26 03:57:36 UTC

even sending from one wallet to another isn't instant, IIRC ( don't want to restart client now to check :P )

I think sender see immediate balance decrease, but not receiver.
(Hint, maybe, it worth to write on exchange page about this delay :) )

Thanks for your purchases so far! :)
I've added some coins to the balance (I expect many more before the end of the week), and the limits are increased faster with each purchase. In order to avoid problems with Paypal you will see that the expression "Buy BTC" is omitted. Instead of that, the user pays to enter the "Hall of Fame", where the Bitcoin will be shown with a link to the transaction (Blockexplorer). This is just a measure to defend agains fraudulent chargebacks.


Thanks for the advice! Since it's true that Bitcoins transitions are not instantaneous, the user should (in normal situations) be able to see the transaction with 0 confirmations some seconds after the purchase. After talking to my server's tech support I realized that it was an exceptional case and in the unlikely case that it happened again I'd prefer the user to contact me directly (and then I will absolutely change of server ^^).

Just purchased and it went smoothly, but the paypal interface was in Spanish until I logged in.

I've explicitly set the language to English in the "Buy now" button, so from now on all the process should be in English.

Thanks for using the service!

Interesting project. I wish you luck.

I see that you are now selling at a 30% premium.

Wouldn't it be easier to just remove the '00' or '+' characters by your back end instead of confusing the customer?

Hi, I am looking for a service to buy BTC for PayPal, does this one really works?

It totally works.

I think that site would benefit greatly from a decently written "help" section.

Also some design, but a "help/FAQ/howto" is a priority.

But I find it intriguing and will watch the fate of paypal/bitcoin "not-really-exchange-hone'sly" ;) with great interest

Thanks for your comments!

Indeed, much easier. Now the backend deals with 00, +, +00 and any other combination (and of course with the current format). Thanks for the advice!  ;)


Good point. While I wait for the new Bitcoins to arrive I'm going to start a HowTo, in order to explain how the fact of being in the "Hall of Fame" implies that the Bitcoins have been sent.

In the meanwhile I encourage you to make your first purchases in order to increase your day-limit. At this moment here is how the purchase limit is increased (I did not make it public in the webpage since it might be adjusted depending on its effectivity to prevent fraud):
nº purchases // Max Bitcoins per 24 hours
1 // 0.1 BTC
2 // 1 BTC
4 // 1.5 BTC
6 // 2.0 BTC
8 // 3.0 BTC
10 // 5.0 BTC
>10 // 10 BTC

One of the advantages of selling BTC with Paypal is that the user does not need to trust the seller. If things go wrong, he can request a chargeback and have his money back. Anyway, if you have any problem with the delivery of Bitcoins (for example, an exceptional delay that makes you feel unconfortable) please contact me (to my email or publicly in this forum) before complaining to Paypal. It will be solved much faster and I prefer not to bother Paypal with honest chargebacks.

I am also working on the reverse service (i.e. sending a Paypal donation to whoever sends BTC to a particular address), but I am having a hard time trying to automate the entire process, and in addition it will require trust on the side of the user. This service would allow spending BTC wherever Paypal is accepted, and will encourage newcomers to use Bitcoin. If you are interested in such a service tell me and I'll work harder on it  :D

I hate to be a wet blanket, but you do know that selling BTC through PayPal violates their acceptable use policy https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/AcceptableUse_full (https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/AcceptableUse_full). See Sec. 3(f) prohibiting currency exchanges. Although not everyone feels that BTC meets the definition of currency, PayPal feels that it's close enough to violate their policy.

That's a rational remark, but consider the following:

1) Bitcoin is not a currency (or at least it's matter of dispute).

2)I am not selling Bitcoins, I am selling a position in a Hall of Fame. The fact that belonging to this Hall of Fame implies that Bitcoins had been sent does not make that I am selling Bitcoins. This is not a retoric recourse to bypass Paypal's policies. On the contrary, it clearly states the service I am offering and what the client is paying for. Since the block chain and all the Bitcoin's formalities cannot serve as evidence for Paypal, I have to give a similar service, both easy to explain to newcomers and equally secure for experienced clients.

3) Someone could cite that Coinpal used to sell Bitcoins and now its account is frozen (or even closed). But my service is not the same. Consider the following example:
Instead of belonging to a "Hall of Fame" imagine that I'm selling "pixels" in a "Hall of Fame" (people pay for some pixels in a "privileged" space). Does it sound familiar? It was the Million Dollar Homepage, which Paypal used to accept.

With that I mean that what will happen is not clear, but I have ways to get scammers away and to prove that my service complies with Paypal terms of service. Anyway, the worst that can happen to you as clients is to receive an error message like "This merchant's account is no longer available", so take advantage while it is online, I'll handle the rest  :)

Yeah I actually considered doing something similar to this.  The thing is you're kind of in a lose/lose situation.  If paypal doesn't accept your premise, your account is frozen.  If they do accept your premise than you've just created a model for anyone to duplicate.  That being said.  Nothing ventured, nothing gained.  Good Luck

Oh yeah, I also wanted to mention that scammers could easily point to this thread and show that you did promise to sell them bitcoins and didn't deliver.  Just something to think about

I appreciate your observations on this business model. Actually I don't think it is a lose/lose situation. If my model is duplicated, it means that it works. We could also argue that anyone can duplicate the model of MtGox, or Facebook, or... yes, they can, and they do, and they all coexist in the market. Thanks for wishing me luck (I think I'll need it  ;))

By the way, I've just added more coins, which will allow me to accept more people in the Hall of Fame. Happy purchases!

Much respect to you for initiating this venture. I hope you can recieve as much ideas and feedback as you need to make it work.

A quick tip of my own: You can have 2 Paypal accounts of your own.. so long as one is personal and the other is premium or higher (the point is, both can be free). This may be useful for your further testing purposes.

Keep up the excellent work. Keep above the scammers at all times. Hope to buy some BTC from you when its out of Beta.

Kudos on the wording of your service. An interesting way to look at the digital currency. The privilege of having your number / name saved in a community ledger. :)

The intention of my post however is to ask if you have an alternate way of confirmation besides PIN by cell phone. I for one do not use of them sorts of location tracking machines.

Do you allow for one on one communication and trading on that level?
Example: Buyer sends email to sales@yourdomain, seller sends paypal invoice with "hall of fame" or what have you. Buyer pays invoice and seller sends BTC.
I suppose that method removes some of the anonymity of the system but that's the price you pay.

I dig the paranoia around the whole paypal charge back Nonsense.
Do you think selling entries into the HOF ledger could be used to dispute a charge back?
(imho you should pretty up your site a bit, throw some illustrations or pictures in there)

Keep on Keeping on!

I think I missed something here.  Currently 1 Unit costs $10. Is one unit equal to 1 BTC.  If so you're more than $3 more expensive than the current market.  Just curious if I got that right.

Nice:) Looking forward to see more:D

PP login page in english -- works
day limit depends on number of purchases -- works
(btw: secure hole: do 10 purchases for 0.01, get max  limit - buy all - withdraw money. Maybe, limit should be % of  all prev purchases, like 120%).

dynamic price - no ( :( )
mtgox: 6.55
donotcompare: 10 :)

Thanks for the tip! But I am not so sure that Paypal likes very much the fact that a single user had more than one account. For testing puporses I have been using the Paypal's sandbox, which emulates *quite* well Paypal's production environment.

The method you proposed will perfectly work, but if I understood well, it would be vulnerable to scammers. Nowadays is very easy to create fake email accounts, and so a fraudulent client could ask the invoice, pay it with a stolen Paypal account (not long ago there was a list of thousands of Paypal accounts and its passwords made public, and thus I assume that everyone can find it with a simple Google search) and run away with the bitcoins. And nothing would prevent him to use another email account five minutes later.
I would prefer not to ask for the mobile phone number, but that (a) ensures that the user is the owner, or at least has physical access to the device and (b) sending it along with the invoice prevents a scammer to use a stolen account.

The management of chargebacks is not a trivial issue. Those of you how haven't asked for a PIN yet won't have notice that in the second screen it says "IMPORTANT NOTE: The phone number you entered will be shown in Paypal's receipt. Think twice before proceeding if you are not the owner of the account. Your phone number will NEVER be shown in the Hall of Fame.".

Thanks! The first time I read your post I read "Nice looking :)". But then I assumed that my design sucks ;)

That's correct.
OK, I catch it! ;) I had to set a minimum price, the price I payed for the coins at the moment I bought them. Now that the market is down I have two choices, to stop selling until it rises again or to sell at a minimum price. I've decided to keep the service and let you decide. Considering that the owner of btcnow.net used to sell at $18 (who, by the way, seems to have problems with Google checkout. I'd like to contact him, but I cannot see a single email address in the whole site, maybe he reads this forum :)) there might be users interested in instant BTC.

Very relevant point! Actually I have been thinking on a system like the one you propose, but finally I decided to go on with the number-of-purchases limit. In order to explain my reasons let's consider the types of fraud I deal with:

 1) People whose Paypal account OR credit card has been stolen
    - That can be addressed by sending the mobile phone number with the invoice. In such way Paypal will have access to a working phone number to start the  investigation.
    - In addition, the limit of 24 hours after each purchase will allow the real owner of the account to realize that it has been hacked when the damage is still minimal.

2) Fraudulent users using their real names, credit card and Paypal account.
   - They can work on a reputation by doing honest transactions. Even if the limit is increased with the quantity purchased, they will try to scam me when it is reached (it doesn't really matter if he had to spend 100€ or 10€ to reach it). But since there is an absolute limit, when raising the chargeback the scammer will have to explain some points:
      -> Why does he say that he is not in the Hall of Fame when this list is public and both the address and the amount are written in the Paypal invoice?
      -> The fact that he has done several satisfactory transactions (in order to reach the limit) gives poor credibility to his version.

So, in short. The scammer will have to argue for some long time, with probability of losing and the certainty of not making business with me anymore and all that to win...10 BTC?


Thanks again for your time considering my service! According to some posts in this thead there are users who have already purchased Bitcoins and seem happy with the service ;) So don't hesitate to try it!

Hey :-)  Ya, I read this forum (and run btcnow.net) but have been stuck in the damn newbies forum while everyone talks about my services.  Pretty annoying :-)   By the way, with some whois magic, you can find pretty much everything about me that you could ever want to know.   I finally stopped trying to go through google to deal with my checkout suspension bullshit, and fixed it my own way, so btcnow.net came back online last night.

Why can't people just hit me up on reddit, where I have plenty of karma and can easily respond to questions :-)

   - DEAN

Would you consider a non-privatized domain register coinciding with the paypal name and email a form of cyber identity. Or do you suppose a would be account hacker could easily go through the steps to both get a website in the stolen accounts name (or if the web has already been established just cite it) and convince the BTC seller his identity? A paypal account from an email address via the non privet site would either mean the user is legit or they also has access to the stolen account users webhost.

If the webpage is established and not an obvious flybynight it would increase trust but not by much....

Any other thoughts on possible cyber identification to verify a paypal accounts owner.

Hmm, looks like a good idea to me.

Heck, I was about to buy until I saw your prices were practically double the market price.

PM me and I will purchase for a negotiated price.

No scammer here btw, US citizen. Can be called, contacted at my edu address, etc.

Hello Dean! It's good to find you here (BTW, a whois does not reveal any information about you!). I love you address' details:
1234 Fake St.

Be careful, cops are arriving at your door ;)
http://www.donotcompare.com/fakest.png


I laughed a lot with that comment xD But in the rest of the thread we see that everyone who ordered coins are satisfied, their only complaint was the price ^_^
And, how do you deal with scammers? Is Google Checkout the solution to all our problems? Too bad that it's only available to US and UK merchants.

First of all, thanks for your proposals!
You propose to ask the user for a webpage with his paypal name and email. Am I right? For example, if my client's Paypal account is "myusername" and his email is "mymail@myserver.com", I would ask the user for a domain like http://www.myusernamemymailmyserver.tk, and then I ask the user to make the purchase from that site web?
If you meant that, I see two serious drawbacks:

 1- If the Paypal's user didn't have a webpage (which happens in most cases), the scammer can set a website and then it would be the actual owner who would be considered as the stealer.

 2- For most legit users the process of setting up a website and then making POST requests from is far too messy to finish the purchases.

I've been reading your previous posts in this forum, and since your donations Bitcoin address in your signature and in BitCoin Beastie is the same I guess that you are the owner. So I think that in exceptional cases I can accept any other proof of identity and provide a working "fake phone number" and a PIN. But for those cases I would prefer the user to contact me directly.


I wish I could negotiate a lower price, but I cannot afford to lose more money. The minimum price I set is just to break even. Oh Gosh, who would think that housin... sorry, Bitcoin prices would stop going up? ^_^ I've been selling slightly below market prices when I was testing the backend, but now that it seems to work my only chance is to wait prices to go up or to invest the coins somewhere else.

In the meanwhile I encourage you to buy at btcnow.net (or at least while his prices are lower than mines ;) ). I bought my first coin with him and the service was excellent. In fact, I decided to start my service when btcnow.net stopped working.

Damn, I got a simpsons reference slightly wrong.  This will not stand.  *updates address*

I've changed my price policy. At this moment the price is 6.38 USD <--> 1 BTC and limits are much, much higher  ;)

Weheww, what a ride that was. Finally back up to $6.

I've just set up a new desing ^_^

I haven't used https://get-bitcoin.com myself but they look like they have a pretty nice system setup even though it's not automated.  The best part is the pricing because you can set your own price.

So I know you just started going, but with a little coding you could set up something like this.

1. You put money into a Tradehill or MtGox account.
2. Someone comes to your site and makes a purchase and sets the dollar amount.
3. Using the exchanges API you place an order for that amount minus a % as your fee.
4. When the order is fulfilled you send them the BTC.

Thanks for your comment! My system works almost exactly like that :). But in order to provide Bitcoins instantly, instead of asking the user the price they want to pay, it automatically sets the lowest price I can afford (that is, MtGox ask price plus transaction fees, Paypal fees, wire transfer fees and risk fees -like possible scammers or not enough market depth at MtGox for that price).
After calculations all those fees resulted to be much higher than I expected, and thus the margin for me is almost non existent. I expect to compensate this low profit with a high volume of sales, after all, I have the lowest price of all the instant bitcoin services I know ;)

Well, hell, I'd take it for a whirl even with the "fee" of higher market prices... I understand the making-money-back thing and I'm sure it'll fly the inverse when the market comes back (you should really buy some Bitcoin right-right-RIGHTFUCKINGNOW as it's coming up as we speak - wait, what am I saying?)...

... but the g*ddamn website won't send me a PIN! :( Is this like "electronic bank transfer" sort of "electronic", that really takes 5-7 days to process?  ::)

Didn't you receive your PIN? Did you write your country code number?

Still nothing. Double, triple checked it. It even said something like, "looks like United States". I didn't do the whole "+" thing because I really have no idea what the "+" means. And there was no "Example:" on the page (really, when you're asking someone to do something unusual like adding a country code, there should be an example - just sayin'). I just mashed in 11 digits (my phone number with leading "1" country code), no dashes, no spaces, all just digits. It said it was successful and to check my phone... and an hour later, still nothing. :(

In previous versions I had a couple of examples, because the user needed to write the number in a specific format (without + or 00, just the country code). After a comment from a user in this thread, I've added a layer to handle any combination of +, 00 or none, and so now you can write your number as you want, always with the country code. For example:
+33612345678 -> France
0011234567890 -> United States
491234567890 -> Germany
or even (with both + and 00)
+0034661123456 -> Spain


Concerning your PIN, you should have received it by now

Still nothing, even switched it off and back on. :(

I entered it as follows:
12223334444
... corresponding to number: 1 (222) 333-4444

Falcon, i entered my number as

2223334444

and i received my PIN within 2 hours.. but my problem is when i submit the pin and my bitcoin address, it says incorrect pin! helpp! lol

OK, problem solved ;)


I do not see any abnormality in the SMS gateway, I've sent you a PM

EDIT: problem solved, too ;)

Good morning, I've decided to lift the limits at donotcompare :)

ghgr, just a question of curiocity - have your visitors/members/customers/whoever-you-call-them experienced scam attempts on thades they've done through your place?

Hello RunningTotal. My visitors have no risk of scam, since they pay through Paypal. If they "feel" scammed, they can contact me or, as a last resort, raise a chargeback.

Thanks for the quick reply. I'm actually much more concerned about those of your visitors who receive Paypal funds. Those who send are obviously 150% safe.

Hey Ghgr, I noticed you posted here (https://bitcointalk.org/index.php?topic=40048.0) and didn't respond, how do you prevent chargebacks with a PIN? Have you successfully fought any chargebacks yet?

Be careful, Ebay and Paypal hate bitcoins

Hello Nefanon. The PIN is just to ensure that the mobile phone is valid and the customer has physical access to it. In case he/she used a stolen account, he would not want to have his phone number displayed in the real owner's Paypal receipt.

By the way, I have added 14 new coins :)

Clever! So how do you add the phone number to the receipt?

It is in the item's description. For example, if I buy 1.2 BTC for the address 'fooBitcoinAddress' and my mobile phone number is +123456789, the item I'm buying is described as follows:

"Position in Hall of Fame.Address 'fooBitcoinAddress'. Units: 1.2. Phone: 00123456789"

You can place an order an check it for yourself ;)

I like this idea. Just a suggestion, while a $2 markup may be reasonable if buying 1 bitcoin in a hurry, perhaps you'll want a give (substantial) discount when buying more. Or better, charge a fixed fee and a small percentage.

mixed feelings about suggesting smaller of fixed fees. it would be great if the markup would be smaller but this is not a major exchange where you deposit funds upfront.
plus they must cover PP fees and operation expenses, not talking about programming and testing time.
so far it looks nonprofit or at loss. look at it as convenience store, you pay the prices there and are glad that they're open. but you won't make the weekend shopping there..