Bitcoin Forum

Before I say anything, let me get this straight: I do NOT accuse either site of being a scam or not being trustworthy. This is just a list of concerns I have regarding the two that may be worth looking into, and my own reasons as to why I am wary of these exchanges.

Also, please leave out the matter of countries that the exchanges originate from. It has no use to use statistics to determine whether an exchange is trustable or not, instead it would be a better idea to look at concrete information and facts.

So recently two new exchanges, Bitcoin7 and Tradehill, have popped up. A few things that are bothering me.

Tradehill:
* Seems to have copied the design (CSS / page structure) from Mt. Gox and modified it.
* Copypasted the FAQ from BitcoinExchange.cc (using Google Cache you can see a version of their FAQ where in one place it actually said "BitcoinExchange" instead of "Tradehill")
* Set up out of nowhere by what looks like an unknown member within "the community", yet immediately looks very polished.
* Has a stable, almost artificial looking, volume, while on other exchanges the volume fluctuates a lot more
* Has a refferal system that offers discounts
* Grows from nowhere to reasonable big (compared to other exchanges) in a matter of days.

Bitcoin7:
* Allegedly (?) copypasted things from Tradehill
* Offers monetary incentive for established member(s) to promote their site - and where it is claimed there was no monetary incentive, positive posts look a lot like fake "hosting reviews"
* Hard to track down who is behind it
* Set up out of nowhere by what looks like an unknown member within "the community", yet immediately looks very polished.
* Appears to be operating unlicensed and therefore illegally (in their jurisdiction)

Does anyone have any clarification about any of this? I've seen Bitcoin getting attacked from all sides in the past few days, and the above things really do make me wonder whether they are legitimate exchanges.

The copy/paste including the words BitcoinExchange is true, I've seen it myself when it was still on the respective pages. It may be either a rush job, or maybe the same developer/owner is behind all these three websites (not a novel marketing technique.) Only time will tell if they are scams or not  ;D However, they deserve a chance, and I agree that we should not accuse anybody without proof.

I'm sure they are fine for small amounts.

But the fact the mtgox has a strong track record and many months of history handling 5figure + amounts smoothly - it will be a long, long time (if ever), before one of these new exchanges builds up that level of trust.

just wondering do you know who is behind mtgox or btcex?

Mt. Gox is run by Tibanne Co. in Japan, MagicalTux being Mark Karpeles according to an article by Reuters (http://in.reuters.com/article/2011/06/15/financial-bitcoin-idINN1510930920110615).

No idea about btcex, but wasn't that the Russian exchange that caused controversy here? I'm not saying that I personally trust every single exchange on BitcoinCharts for example, I have just looked at Bitcoin7 and Tradehill, and decided to make a topic about my concerns. That doesn't mean I automatically vouch for all other exchanges :)

https://www.bitcoin7.com/index.php?show=imprint
Now THAT was hard, eh? ::)

Also as they claim to operate other game money exchanges, they probably took a template they already had and just copy-pasted it to fit "Bitcoin".

Also making claims that someone is operating "illegally" is quite easy - especially with BTC there's not that much regulated or available, as it is a relatively new field of operations. It's very often not sure for example if BTC are "money", "goods" or anything else.

I wonder why you trust the former "Magic the Gathering online exchange" more, especially as it provides a very large single point of failure for whole Bitcoin (many miners will stop mining if they can't get USD for mining - there are NOT many idealists in the network, rather a lot of kids who use the chance to get a free GPU!).

I recall a thread where people were trying to figure out what was on the address and ended up on an address with some shady businesses registered, and no real name to be found. But I might be wrong.

Possible.

This claim was in regards to the various non-Bitcoin currencies that were used. Again I can't recall in exactly what thread it was (and the forum is too slow now for me to go look for it), but someone pointed out that under their jurisdiction they would be operation illegally because of the other currencies, not because of Bitcoin.

I am aware of issues with Mt. Gox and I definitely do not blindly trust it (especially not with the recent happenings and the security that is in my opinion seriously lacking), but at least it's clear who runs it, and it's not just a name - there is communication to the outside world and even to the press. It can't just vanish overnight without anyone having any clue where they went.

http://forum.bitcoin.org/index.php?topic=17004.msg226321#msg226321

Can you say, CSRF?

I'm gonna respond to all your points here:

1. MtGox (Gox) barely has a page structure to begin with, the site is very simple with only a few links on the left. Once you login to TradeHill (TH) the site is wildly different than Gox
2. Not sure of this, however that dosent really make a difference. Most sites copy their competitors information
3. Being polished has nothing to do with being set up out of nowhere. TH has a team of excellent programmers based here in the United States.
4. Can't really answer this, they are a much smaller site although the second largest exchange.
5. Thats what made them grow. Its a pretty good marketing strategy actually.
6. I answered this above ^. They are growing fast because they have a good, American based team, they answer CS issues quickly, they have a nice site, and good business ethics. I think they will surpass Japanese based Gox in a few months forsure.

I must point out that I know the TradeHill team personally so my response is a tad biased towards them. My point being, I trust TradeHill more than Gox. The only reason we all use Gox is because they were the first ones.

1. Whether they "barely have a page structure" or not has nothing to do with it. It looks similar enough in layout and visual characteristics, for it to be likely that it was just copied and modified CSS and HTML. That someone doesn't consider it "special enough" does not mean you can blindly copy it - Mt. Gox definitely has a distinct page style, even if it's 'minimalistic'. I haven't seen the "members area".
2. I don't know what kind of businesses you are talking about, but I don't know of any industry where copying text (and obviously not even really changing it except for a find-and-replace on the name) is standard practice - or acceptable, for that matter.
3. If they indeed have an actual team working on it, point taken.
5. I tend to get a bit itchy when I see referal systems, because in my experience this is mostly because said site can otherwise not grow for some reason, be it a bad business model, shady underlying business, or just because it's impossible to get into a monopolized market. I hope it's the latter, but I can't discount past experiences with other reasons for referal systems.
6. The "American based team" seems irrelevant to me. While I understand that some people might have an (in my opinion unjust) aversion against for example east-european countries (and businesses originating there), I don't see how "American based" would be considered any more trustable by someone than for example "West European based" or even "Japan based". As for the customer support, I have no experience with this, and the same goes for their business ethics (do you have any examples?).

Thanks for responding!

1. I guess you missed my point, thats my fault. What I was getting at is they did not copy Mt.Gox, in fact, theres nothing about Mt.Gox to copy. Have you logged into TH? You'll see their site is wildly different then Gox
2. In pretty much every industry, something trivial like the FAQ, will be used as a basis for a competitor. Agreed, they should not have copy-pasted it, but if those are your grounds for being not trusted, then your gonna have to have more than that my friend!
3. Yup, a really good team! Thats why they will surpass Gox in a few months.
5. I assume thats your own personal opinion and not your professional one? I've been in the marketing industry for over 8 years and referral programs most defiantly do not mean that. Try to look at it like this, can you think of a more cost-effective method of marketing an exchange in such a new and young industry?
6. Again, are you someone who's in the e-commerce industry? If you are, you definitely know that an American company who is catering to an English speaking consumer base is much better than a Japanese one. ESPECIALLY a company in which your transferring thousands of dollars to! I don't know about you, but I'd rather the American one.

I hope I articulated my points, let me know if you have any questions!

There is definitely something about Mt. Gox to copy. Quick comparison of main layout elements, obviously showing things being copied:
http://img.owely.com/screens/18445/original_owely20110617-5021-374nlv-0.?1308271314

Now I am not a particular supporter of copyright law as it stands, but I do believe that you can't simply copy the entire design (and make a few changes) for commercial purposes, especially not for a relatively lucrative business.

The thing about referal programs is just based on what I have experienced in the past few years, from an "internet user" viewpoint. It's all great that you look at it from an "ecommerce guy" viewpoint, but it's the "regular internet users" that have to deal with the consequences - and from a "regular internet user" viewpoint I've found that I (and many others with me) have usually found companies that rely this heavily on referal systems, are often shady in one way or another.

I understand your point about physical location, but I tried to make a point about American vs West-European mostly. I don't think that for example a UK-based business would be any different from a US-based business in that regard.

TradeHill is an American company?

I am tired of trying to decipher Magical Tux's thick Jap accent  ::)

LOL I think this conversation is over.

I have proved my points exactly.

The Western European vs American argument is completely erroneous to the topic were discussing

oh and by the way, bringing those screenshots was a waste of effort on your part and did not help your case at all LOL

Cheers buddy

Yes sir! The management are Americans based in Chile, and the programming and design team in Washington, DC.

Sure, they're Americans...in Chile.

Well, Chile is in America too - just not in the "United States"!

Anyways - calling a completely basic design (horizontal + vertical navbar, company name in the footer(!)...) a ripoff is a bit much in my opinion.
People are used to this layout from MtGox - why suddenly swith to something completely new and out-of-the-box, just to be different?!

These exchanges are popular because they have a combination of:
1) Look good.
2) Have some sorta API, or are going to
3) Allow lots of payment/withdraw methods
4) Ref. System.

And looking good shouldn't be anything fishy to be appalled by lol. With the recent BTC buzz I'd say we can expect more and more exchanges to pop up.

I'm disappointed to learn that TH is American. I wish for diversity in our exchanges.

However, the OP's concerns are NOT enough for me to stay away from TH.

Bitcoin Market was first.  MTGox was the first to go 24/7

I think those could be C.I.A. guys that murdered Salvador Allende and installed Pinochet.

 bitcoin7 is "operating unlicensed and therefore illegally (in their jurisdiction)"

What licenses are required to operate a bitcoin exchange in the United States?

Especially given that BTC aren't recognized as a currency, aren't they just the equivalent of people buying/selling WoW gold on eBay?

Also, does TH have whatever the appropriate licences are?

IMHO exchanging between fiat currencies requires a license, selling series of 0s and 1s does not ;D

Why so hostile? I'm having to try a proper discussion and you resort to laughing and ridiculing, that's not really going to help.

My point is not that it's similar, but that it's practically identical. The tradehill layout is basically the Mt. Gox layout/design with a color change, a font size change, some changes in the text, a different logo, and the exchange rate bar removed. The menu (with the shadow effect thing) for example is a dead giveaway.

Tradehill has no doubt emulated some aspects of mtgox's design, which I think was to give the users a sense of familiarity. But to accuse them of "copying" the design, is simply ridiculous. Similarity in terms of functionality and appearance between TH and mtgox is about 20% at most.

Of course, Mark Karpleles (MagicalTux) runs MTGox. He is a very well known member of the community, let alone the fact that everybody knows his real name, and where his company is located.

Roberto

people, don't kid yourselves... legal/illegal, jurisdiction, who's behind what... c'mon!
bitcoin is NEW. there's no case law involving it. NOBODY knows if it's legal or not...
in the US of A, trading gold online was legal until a judge ruled that e-gold :-) was... illegal!
same with other jurisdictions... PLEASE... wishful thinking is NOT reality...

I would rather trust an exchange running over TOR or incorporated in a "safe jurisdiction" than an US LLC which can get a subpoena any day...
with the Panama company, worst case scenario I lose my bitcoins...
with the US LLC, I may end up with the feds at my door!

maybe Gavin can straighten it out with the CIA?

reality check: why do you think liberty reserve and pecunix are NOT incorporated in the US / EU?
take a deep breath and think about it...

As I have said at least two times by now, I am talking about other (fiat) currencies that can be exchanged for each other, not about Bitcoins.

both places look shady, probably run by single users, not some real "company"

joepie91, can you please explain what exactly it is that you're asking?

fxgmblr, MtGox is ONE person, Mark (aka MtGox).
why don't you ask Citibank or BoA if they would take your bitcoins  ;D

Personally I don't see a problem with copying the content of things like TOS or FAQ ect...  from places with a proven track record.  They tend to cover all the bases a business would need to know about to be a success.  I definately wouldn't do a cut n paste, but copying content such as features, services, information ect. saves time and headache for businesses starting up.

It happens every day.