CoinJar - Australia's first VC-backed Bitcoin startup

[zhoutong]

Hi Bitcointalk,

I'm Ryan Zhou (aka zhoutong). I recently joined a Melbourne-based Bitcoin startup with two other co-founders Asher (Australian economist and business writer) and Jerrold (Enterprise software engineer with 10 years of experience). I think it's great to give bitcointalk forum members a quick update and overview about what we are doing and how we are improving the Bitcoin economy.

CoinJar: https://coinjar.io/

"CoinJar is a Melbourne-based startup bridging the divide between digital currency and the dollars in your wallet. Bitcoin was naturally the best place to start, being the world's leading digital currency. Founded in 2013, we quickly caught the eye of early start-up investor AngelCube who have generously provided us seed funding and mentorship."

Currently we offer three Bitcoin services:

CoinJar

CoinJar is a hosted Bitcoin wallet ("hosted" means "store just enough for transactional purposes and NEVER use it for savings") that integrates well with other parts of the platform. To be honest, there's nothing too much we can innovate on Bitcoin hosted wallets because they are so simple. However, we aim to deliver the best possible user experience. Aside from the web, we are also building an iPhone app for CoinJar wallet with great mobile experience (finally).

Please note that CoinJar wallet is a full-reserve platform with automated sweep to cold storage and we will never use customer funds for our business expenses. That said, be aware with any hosted wallet service. We recommend against our users to use CoinJar for Bitcoin savings. Always use cold storage!

CoinJar Checkout

CoinJar Checkout is the best Bitcoin merchant solution. We provide a PayPal-compatible API (in addition to our standard RESTful API) to help any online merchant to integrate. On top of that, industry-standard features: 1% fee, daily settlement in local currency (Australia only for now) and exchange rate guaranteed for 15 minutes.

CoinJar Filler

This is our killer app. Most other Australian Bitcoin buying sites charge excessive fees (usually 8-10%) and we really HATE to see that. A high fee will severely limit adoption and result in bad consumer confidence. Even though Australia has a well-developed financial system, when it comes to anything related retail foreign exchange services, it's a straight-up nightmare (even major banks in Australia all charge ridiculous ~4% spread each side for AUD/USD TT rate). As a full-service Bitcoin startup, we have sufficient liquidity available from our merchant solution and arrangements with institutional forex brokers (who give us wholesale rates), we want to pass on the savings to consumers by charging a just 2% flat fee.

Both Checkout and Filler are Australia-only for now, but we are definitely interested in expanding overseas. (Contact us at info@coinjar.io if you're interested in partnerships. Please reference this post when you contact us.)

We also have a by-product:

Melbourne Bitcoin Euthusiasts meetup! (http://www.meetup.com/Melbourne-Bitcoin/)

I attended yesterday's first meet-up session with 17 other Bitcoiners. It was really a great event and CoinJar plans to do it approximately every two months. So please join the meetup group if you're located in Melbourne!

Let me know if you have any feedback with our service offerings. Feel free to comment in the forum post.

We are in the process of setting up a company bitcointalk account.

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[🏰 TradeFortress 🏰]

An Australian bitcoin buying site is great, but CoinJar?  

Client sided encryption please.

[zhoutong]

An Australian bitcoin buying site is great, but CoinJar? 

Hmmm. What's wrong with that? Is it because of our funny name?

[🏰 TradeFortress 🏰]

It's not encrypted in the client - the user doesn't control the private keys. That can be ultra transparent and not affect the user experience.

Your reset password function is also broken FYI: "1 error prohibited this user from being saved: Reset password token can't be blank"

[Monetizer]

Seems pretty good and I may use it but why not a .com or .com.au or something?

[🏰 TradeFortress 🏰]

Also, is this a shared wallet?

[zhoutong]

It's not encrypted in the client - the user doesn't control the private keys.

Your reset password function is also broken FYI: "1 error prohibited this user from being saved: Reset password token can't be blank"

It's a fair comment. We had two options to choose from, either Blockchain-style wallet or Coinbase-style wallet. We decided to go with the latter because we need full control over the whole user experience. This decision should make a lot of sense to many people if you have seen the one-click payment button on CoinJar Checkout page.

CoinJar also has full APIs available for programmatic access to wallet. Self-managed private keys will greatly increase the complexity.

Also, managed wallet solution makes instant payment between CoinJar users possible without paying network fees. This instant payment is used by our own platform components. For example, when you buy Bitcoin from Filler, the Filler application will actually send money from its own CoinJar account to yours. We also heavily utilize the internal payment system to do our accounting and hedging.

Many new Bitcoiners are not familiar with the concept of private keys. As long as they don't hold a large amount of deposit with a hosted wallet, we shouldn't close the door for them. I'm thinking of a system to notify users when their balance cross a certain threshold, to give them tips and guides on how to set up a secure Bitcoin storage themselves. Do you think that will help?

Again, we are only interested in facilitate the transactions as there are no interest to be earned from Bitcoin anyway.

[zhoutong]

Seems pretty good and I may use it but why not a .com or .com.au or something?

coinjar.com is already taken by a domain squatter.

coinjar.com.au is registered by us, but as we may want to use it globally, it looks a bit inappropriate. That said, we will consider making coinjar.com.au a localised version of the platform, as most features are useful in Australia anyway.

.IO is a really popular "gccTLD" right now, and many startups (such as GitHub and App.io) started using it. We think it's cool.

[worldinacoin]

Nice to see you back and best wishes on the new venture.  You coined the word "zhoutonged"

[🏰 TradeFortress 🏰]

It's a fair comment. We had two options to choose from, either Blockchain-style wallet or Coinbase-style wallet. We decided to go with the latter because we need full control over the whole user experience. This decision should make a lot of sense to many people if you have seen the one-click payment button on CoinJar Checkout page.

Not really. There's plenty of technical ways where you can allow the user to store the private key, and provide a one click checkout experience - for example, storing a encrypted (so only CoinJar can access it) paraphrase in a cookie. Giving a user access to their private keys is important as anything that relies on Bitcoin address will not work.

Also, managed wallet solution makes instant payment between CoinJar users possible without paying network fees. This instant payment is used by our own platform components. For example, when you buy Bitcoin from Filler, the Filler application will actually send money from its own CoinJar account to yours. We also heavily utilize the internal payment system to do our accounting and hedging.

I saw that! (Pretty sleek UI btw) - that is actually possible while letting a user control their own private key too. The same way where you can make a multi currency wallet.

Sure, it would take some time to develop, but seeing as what happened with Bitcoinica..

Bitcoin is designed^[1] where each user has access to their own private keys. Going against this will mean that when you get hacked, it's bankruptcy for you, instead of a "Oops, we'll have service restored soon". Sites get hacked all the time, especially when there a multiple vectors. Take a look at Sony, Facebook, Microsoft, Apple, Google. Luckily, they don't store the most liquid form of money

¹: "A generation ago, multi-user time-sharing computer systems had a similar problem.
Before strong encryption, users had to rely on password protection to secure their
files, placing trust in the system administrator to keep their information private.
Privacy could always be overridden by the admin based on his judgment call weighing the
principle of privacy against other concerns, or at the behest of his superiors. Then
strong encryption became available to the masses, and trust was no longer required.
Data could be secured in a way that was physically impossible for others to access, no
matter for what reason, no matter how good the excuse, no matter what.
Its time we had the same thing for money. With e-currency based on cryptographic
proof, without the need to trust a third party middleman, money can be secure and
transactions effortless."

-Satoshi Nakamoto

[zhoutong]

Also, is this a shared wallet?

Yes it is. We have to do that due to the reasons above. I believe that there are plenty of good solutions available for client-side wallets, and personally I use Blockchain.info wallet service (but infrequently).

After all, for a security paranoid, the only no-trust solution is to use the official Bitcoin client and only update after reviewing the source code. We *may* be able to contribute to reduce the "trust bar" for Bitcoin services in the future, but that's not our focus right now.

[🏰 TradeFortress 🏰]

What if you get a court order to freeze/seize someone's account? That's simply not possible with Blockchain.info-styled wallets. With growing crackdown on "money laundering" and how the blockchain is 100% public, imagine some rubber stamped warrants for Bitcoins with known silk road taint

Anyways, you guys have made the decision to go with a shared wallet. Best of luck, I'm just expressing the concerns and problems with shared wallets in general.

Also, what are your fees for Bitcoin payments?

[zhoutong]

It's a fair comment. We had two options to choose from, either Blockchain-style wallet or Coinbase-style wallet. We decided to go with the latter because we need full control over the whole user experience. This decision should make a lot of sense to many people if you have seen the one-click payment button on CoinJar Checkout page.

Not really. There's plenty of technical ways where you can allow the user to store the private key, and provide a one click checkout experience - for example, storing a encrypted (so only CoinJar can access it) paraphrase in a cookie. Giving a user access to their private keys is important as anything that relies on Bitcoin address will not work.

Also, managed wallet solution makes instant payment between CoinJar users possible without paying network fees. This instant payment is used by our own platform components. For example, when you buy Bitcoin from Filler, the Filler application will actually send money from its own CoinJar account to yours. We also heavily utilize the internal payment system to do our accounting and hedging.

I saw that! (Pretty sleek UI btw) - that is actually possible while letting a user control their own private key too. The same way where you can make a multi currency wallet.

Sure, it would take some time to develop, but seeing as what happened with Bitcoinica..

Bitcoin is designed^[1] where each user has access to their own private keys. Going against this will mean that when you get hacked, it's bankruptcy for you, instead of a "Oops, we'll have service restored soon". Sites get hacked all the time, especially when there a multiple vectors. Take a look at Sony, Facebook, Microsoft, Apple, Google. Luckily, they don't store the most liquid form of money

¹: "A generation ago, multi-user time-sharing computer systems had a similar problem.
Before strong encryption, users had to rely on password protection to secure their
files, placing trust in the system administrator to keep their information private.
Privacy could always be overridden by the admin based on his judgment call weighing the
principle of privacy against other concerns, or at the behest of his superiors. Then
strong encryption became available to the masses, and trust was no longer required.
Data could be secured in a way that was physically impossible for others to access, no
matter for what reason, no matter how good the excuse, no matter what.
Its time we had the same thing for money. With e-currency based on cryptographic
proof, without the need to trust a third party middleman, money can be secure and
transactions effortless."

-Satoshi Nakamoto

Thanks for your feedback and I really appreciate it. As a huge believer in Bitcoin and Libertarianism, I share the philosophy that ultimately every user should be able to gain absolute liberty over his money (i.e. medium of exchange and store of value), both technically and legally.

We will definitely think about the solutions you proposed. Maybe we can implement a CoinJar "Advanced" mode for non-shared wallet and limited-trust private key management (client-side encryption).

[zhoutong]

What if you get a court order to freeze/seize someone's account? That's simply not possible with Blockchain.info-styled wallets. With growing crackdown on "money laundering" and how the blockchain is 100% public, imagine some rubber stamped warrants for Bitcoins with known silk road taint

Anyways, you guys have made the decision to go with a shared wallet. Best of luck, I'm just expressing the concerns and problems with shared wallets in general.

This is a valid concern. I like your reasoning and feedback. Even though we have made the decision for our version 1, we are still innovating every single day! (That's how VC-backed startup should work right?)

If you come to Melbourne sometime, feel free to come to our office to say hello. We are currently working in Inspire9 (http://inspire9.com).

EDIT: We don't charge any fees for CoinJar wallet service. We absorb all Bitcoin transaction fees. Our business mode is to make money from Filler and Checkout services.

[ArcticWolf]

I just signed up, the site looks very nice!
One question - is there plans to implement some form of 2 factor authentication like Google Authenticator?

Also I just arrived in Melbourne today and - it seems - JUST missed the bitcoin meetup

[zhoutong]

I just signed up, the site looks very nice!
One question - is there plans to implement some form of 2 factor authentication like Google Authenticator?

Also I just arrived in Melbourne today and - it seems - JUST missed the bitcoin meetup

Thanks!

2-factor is in our planned feature list. We spent a lot of time on the infrastructure itself, but features like this are easy to add. If you have more ideas after trying out our services, please give us feedback at info@coinjar.io.

If you haven't, you can join the meetup group to subscribe to our updates.

[Alph0nse]

Hi Zhou, just signed up, was wondering if you were going to implement a 'buy order' feature, where the order is automatically executed when the price falls to a preset price?

[zhoutong]

Hi Zhou, just signed up, was wondering if you were going to implement a 'buy order' feature, where the order is automatically executed when the price falls to a preset price?

That's a good idea. I will tell my team about this.

In the future, feel free to contact us at support@coinjar.io. Thanks!

[xavier]

Please make sure the code is well designed this time around. I ended up looking through the bitcoinica code for a client couple months ago. Let's just say, the software engineering was a little inadequate for a site grossing $1m. In any case, good luck!

[suryc]

Very interested in the Checkout feature and paypal compatible API, but why does that need to be restricted to Australia only.

I work with several online merchants that would add bitcoin as a method of payment to their sites if there was an easy way to integrate with what they are already using and this sounds like it might make that possible.