Holy cow... I went away for a few days, and this blew up a little bit. I didn't receive email notifications.
Let me try to answer questions as best I can:
- There are never any guarantees of profitability when it comes to trading, and anyone that claims otherwise should be avoided. Any evidence presented that claims fairness or profitability can be easily faked, and should be heavily scrutinized.
- Regarding APIs, this is correct, and you should be skeptical. Modobot needs two keys from Bitstamp in order to conduct automated trading, however, Bitstamp has a very nice permissions system, so one can set up their Bitstamp account to ONLY allow buys and sells. Modobot has no need for permissions to transfer Bitcoin, so the worst an attacker can do is sell everything, or spend all of your cash. However, since there is no actual way to transfer funds, Modobot cannot do anything else, and does not even request a wallet address.
What you should be more concerned about is how the data is secured, and what measures have been taken to prevent compromise. Here is how I do it:
- Passwords are hashed in the database.
- Users are identified by an encrypted token.
- Users are cross-identified by a server token.
- Bitstamp credentials are encrypted in the database.
- Hashing uses a salt and multiple passes to create authentication tokens.
- Credit card info is handled by Stripe, and the only thing saved by Modobot is a subscriber id, and a stripe id, which you need to do to be able to track user accounts and record keeping.
I have been programming long enough to know that it would be foolish to ever think that Modobot is immune to attack. If the attacker somehow got into the database, and somehow figured out the encryption, and was able to get your Bitstamp credentials, they still wouldn't be able to transfer any money because there are no permissions. Unless the user expressly allows it, which they shouldn't, and that is how it is written in the documentation. At most, someone may use those tokens to attempt to social engineer Bitstamp. It is also a possibility that 10 minutes after I post this, someone will figure out how to break the site.
- Regarding malicious content - unless you are a developer, you have no way to know if anything is going on in the background of any website. And programs need authentication tokens all of the time, like every time one uses Facebook or Google to log into a website. Many 3rd party JavaScript libraries make use of authentication tokens, and those can often be found in plain text in the source code. If I may refer you to the point above, it is how that data is handled, and what measures have been taken to mitigate damage in the event of a breach. Moving the payment processing to Stripe removes any need for Modobot to handle any funds at all. As a consumer, one would be checking the credit card statements for fraudulent charges.
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Modobot has been going for a couple of years now, and it does what I want it to do, which is conduct simple trading, notify me of transactions, and notify me when a price point is reached. It does exactly that. There is no sophisticated trading strategy, because then I wouldn't be smart enough to know how to use it.
If I can find 10 or 20 paying subscribers, I can cover my hosting fees, and it provide motivation to make some things look a little better. As has been noted here, there are a lot of trust issues that need to be worked out, and it doesn't help that I abandoned the account I was originally posting from. So my solution is to open up registration and see what happens. You don't need credit card info of any kind. The order form is filled in with bogus test data, and although Stripe will process the data as an actual request, all of the data is fake.
Some people might want a simple bot, some people might want a price notification service - I certainly don't expect anyone to do unlimited trading, but I also feel there is no reason to artificially limit it either. I have about $50 worth of BTC that has been in there since this spring and was up to $64 at one point, but I credit that to watching the market, and picking a price point. Also, the uptick in price made a difference also.
At any rate, one can do the signup stuff, use the price point notification feature, test the bot, and never import your Bitstamp credentials at all.
I appreciate the opportunity to answer questions.
