Bitcoin Exchange With User-Based Escrow! Are You Interested?

[StewieG]

Hi guys,

I´m thinking about developing an exchange with user based escrows.

The exchange works like this:

Anyone can open an sell/buy offer. When creating the offer you can choose how many BTC you would like to buy/sell, you can select the Currency, you can select the payment method(Banktransfer/paypal/Ukash/Cash...), you can select the price, AND you can select if you want to use an ESCROW.
If you want to sell bitcoins you have to send them first to your account on the exchange first.

Okay you have Bitcoins on your account and created an offer(example: Sell 3 Bitcoins for 100$ via Banktransfer with escrow)... If you chose to use an escrow, before users can buy from you, at least one user has to apply to your offer as an escrow and you have to confirm him as an available escrow for your offer.

Okay now lets say 2 escrows applied to your offer and you confirmed them. Now users can buy from you and select the escrow they want to use.

Okay a user is buying one Bitcoin from you. First he selects one escrow out the list in your offer. Now the user sends the money to the escrow and confirms it on the exchange.

The Escrow receives the money, confirm it on the exchange and sends it to the seller.

The seller receives the money and confirms it on the website. Now the exchange system releases the bitcoins and sends them to the buyer.

Transaction finished.

Additionally the users receive trust-points for every successful transaction. When a user creates an offer he can also select a minimum of trust points necessary to apply to your offer.

The escrows of course can charge a little fee for being the escrow.

As you can see, the escrow for the bitcoins is always the exchange, for every other currency users can apply to be the escrow.

Tell me what you think, would you appreciate this service or not? Every comment is appreciated! ^^
 

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[StewieG]

Kay looks like there is no interest

[dansmith]

Hi, and welcome to the Bitcoin community.
I don't think there is no interest in what you've described, quite the contrary.
I personally contemplated an exchange with user-chosen escrows, trust points etc.

By all means go ahead and create an exchange and see if there is a demand for it.
My suggestion would be to create it as modular as possible, so it could be used by others and could be easily modified.

We could go on and on now describing all the potential pitfalls like defaults on payment, newbie-friendliness, chargebacks when selling through Paypal etc. I only wish that you don't lose your steam and follow through with your endeavour.
Also if you decide to do  "BankTransfer for BTC" check out my thread how to enable 100% fraud-free purchases using escrow and SSL session logging.
https://bitcointalk.org/index.php?topic=173220

[daybyter]

If you organize a meeting of buyer and seller, why not add a 3rd person (or more) as a eyewhitness of the trade?

Use smartphone with GPS functionality to locate users. No central website.

[bytemaster]

Do you have the ability to implement it or the funds to pay for it?

[countryfree]

Uneasy. The purpose of using an escrow is to add safety to a transaction between two people who don't know each other. So I don't see the point of using an escrow nobody knows, and whose credentials are also unknown. You may add a rating system like on ebay, but it would take quite a while before a large group of people believe in it.

[StewieG]

Hi thanks for all the response,

@dansmith: thanks for the welcome, checking out for thread... won´t lose steam, I´m always looking out to develop new bitcoin related systems, also programmed my own exchange whic works fine, but to open an xchange which moves real money involves a lot of legal stuff, which I´m not into...

@bytemaste: I would program it myself, I know about HTML/CSS/PHP/MYSQL/JAVASCRIPT/JAVA(ANDROID)... maybe I forgot some...

@truethat: true that, I was also thinking about to implement an ID upload function for escrows, maybe also verifying via facebook, skype...

@all: thanks for your replies! 

[daybyter]

I also know Java, PHP, MySQL etc and was working mainly on bot stuff so far.

I released some API implementations

https://github.com/ReAzem/cryptocoin-tradelib/tree/master/modules

and would be interested to work on an improved API.

I think most APIs lack some essential methods, like computing the fees for a order, return the supported currency pairs etc.

Would be nice to implement a better API as a reference for other exchanges.