This is Vadim. I helped start bitfloor, but I haven't been involved with its operations since December of last year, due to personal reasons. I officially signed over all my shares and intellectual property, etc earlier this year.

There's no reason I would hack roman, as he is one of my best friends. Also, I make a great living and definitely don't need the money.

The address listed also isn't my address. I haven't lived there for 7 years. Please don't harass the people living there now.

It's on our list of things to do. We're brand new, so we don't have much trade history or volume anyway. We have some nice visualizations of market data in testing and will deploy them as things pick up.

I'm not sure what you mean... The entire point is for traders to factor the rebate into their trade, thus giving them an incentive to create tighter spreads.

1 is correct. Sorry for the confusion, we will document this better.

We are pleased to announce that we are now offering a rebate for providing liquidity on our exchange. This means that if your order was on the book when it gets paired with another trade, you will be paid a rebate instead of being charged a fee. A more detailed explanation is on our blog: https://blog.bitfloor.com/?p=6

We have a page which details some of our security practices here: https://bitfloor.com/docs/security
We believe that from a systems engineering and cryptography standpoint, we have the most secure bitcoin exchange. Here's an example of the poor security practices at mtgox: http://news.ycombinator.com/item?id=2676781

Sign up for an account and start trading!

https://bitfloor.com/

We are currently writing up some detailed information on our security. The bitcoin wallet and database is on a different machine than the rest of the system, and is not connected to the internet. Therefore, an attacker would have to hack the webserver and then use that to hack into the wallet/database server. All passwords are hashed with bcrypt so even in the unlikely chance that an attacker compromised the database, your password would not be decrypted even if it was weak. We have multiple bank accounts, so if the bank closes the account we are using we will simply start using another one. There may be some delays in USD withdrawals during that time but banks are not allowed to just take your money; we will get it eventually. Currently we use dwolla for everything, so there is no bank account to close.

We are a registered business in the state of New York. You can see our information at this link here:
http://appext9.dos.state.ny.us/corp_public/CORPSEARCH.ENTITY_INFORMATION?p_nameid=4491734&p_corpid=4137198&p_entity_name=bitfloor&p_name_type=A&p_search_type=BEGINS&p_srch_results_page=0

What other information should we release to make you comfortable with our service, and where should we post it?

We are in the process of developing a better bitcoin exchange. Based in New York City and written by financial industry professionals, our goal is to be the fastest, most stable, and most secure bitcoin exchange.

We currently have a:
- simple web trading interface
- simple REST JSON API
- streaming TCP and UDP API

Currently we are running a testnet with fake USD and testnet BTC while we work on polishing up the system. We are inviting everyone to check it out and appreciate any feedback you provide.

You can signup here: http://testnet.bitfloor.com/signup

You can see sample traders here: http://github.com/bitfloor

Could you expand on this please? I feel like paypal is pretty easy to deal with as a consumer. As a merchant it's a completely different story of course, but most consumers don't know or care about that.

There are some drawbacks to using bitcoin for normal online purchases that could also be done with fiat currency:

• You're exposing yourself to massive forex risk (working on mitigating this )
• Bitcoins move the risk of a disputed transaction from the merchant to the consumer. I don't think consumers are compensated for this via lower prices when paying with bitcoins, or are they?

I know you can also buy gift cards with USD. Are the prices cheaper with bitcoins (due to the increased risk of credit card fraud since gift cards are almost cash)?

Yea... internet services could be a very good use of bitcoin. They can be provided/consumed by anyone in the world, and bitcoin excels at international money transfer.

Thank you for all the feedback guys. Good stuff!

Yes, I've seen it. But all of these goods could also be bought with fiat currencies. I was wondering whether there were people using bitcoins to buy certain goods because it was easier, not just for the novelty of it.

EDIT: to show that I've actually done my research, here are some real uses for bitcoin that I have thought of:

• Donating to Wikileaks is easier with bitcoins, because it is nearly impossible using fiat currencies
• Transferring money quickly and cheaply to a friend in another country
• Easily buying products online that are not sold in the user’s home currency, especially due to fraud concerns
• Micropayments

 Are there any more I haven't thought of?

I am curious about how people actually use their bitcoins, aside from hoarding and speculation.

What do you buy with them?
What's the benefit of using bitcoins for that transaction over other forms of currency?
Is there anything that is very difficult or impossible to do without using bitcoins?

I'm working on a model for the minimum value of a bitcoin. Looking for anecdotes to check if I'm missing anything.

Why wouldn't you? For $1, you could get 1000 of them. For $10, you could get what a month ago was $200,000 worth of bitcoins. If the price recovered, you'd make a ton of money. And if not, you're only out $10.

It makes perfect sense that the price is dropping. Mining became super popular recently. If everyone starts mining to get USD, then that's a huge increase in bitcoin supply. There was no new increase in demand (in fact, maybe a decrease, due to all the security scandals lately), so that translates into a big price drop like what you're seeing now.

If only you could have shorted BTC, then I would have been able to make a profit. And many people wouldn't have wasted so much money buying mining equipment, because the price would have never gotten so high, and would have steadily decreased as the mining pool increased, instead of crashing rapidly like it is now.

This is why shorting is good for the market.

Bitcoins only have value due to their function as a wealth transfer mechanism. If you look at the wealth being transferred, you can derive a theoretical minimum price for bitcoins based on the fact that there is a minimum 1 hour transfer period. If a person buy bitcoins for $x, transfers, and then the receiver immediately sells for $x, there is that 1 hour transfer period where there's more demand for bitcoins than supply. So, what is the minimum value of x?

According to bitcoinwatch, 17,738.09 bitcoins were sent per hour on average. At a price of $8.30924, that means $147,390.0469516/hr was transferred on average. If there is a 1 hour transfer period and no one holds bitcoins for any additional time ever, then that is the value of the entire bitcoin economy. Since there are 6,993,100 bitcoins, that translates to $0.021/bitcoin.

Of course, a few weeks ago it was $0.094/bitcoin - there were more bitcoins transferred per hour (45,744.18) and the price was higher ($14.02).

This doesn't take into account transfers made outside of the bitcoin protocol.

Another ponzi scheme? 

I think wire transfers will complete in under a day. The major exchanges (mtgox, tradehill, etc) all accept wire transfers. The fee might be more than $10 though, as both the exchange and your bank will charge you. The problem with USD is it's really hard to transfer money quickly and cheaply. This is why Bitcoin exists.