CoinPal beta - Buying bitcoins with PayPal

[jgarzik]

Did you get a core dump? It might be useful. There must be a memory corruption or race in there. Maybe time t break out Valgrind.

Unfortunately c3f140033c531e9c5eae920c16fe2ecc80faa1a2 in bitcoin.git catches SIGSEGV, which means no more core dumps :/

[mndrix]

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.

[mndrix]

PayPal reduced my fees again.  I'm passing on those savings, so customers should save about $0.10 in fees on a typical order.  This is probably the last fee reduction PayPal will give me for a while.  I'm still considering ways to reduce the 3% fee that I keep for myself.  Unfortunately, fraud rates have eaten most of that 3% so far.  Hopefully as I improve fraud detection mechanisms, I'll be able to do it.

I've also recalculated the fee range that I show on the Prices page.  Because of PayPal's fixed $0.30 processing fee per order, it's possible for some small orders paid with non-US PayPal accounts to reach  a 10% effective fee.

I'm planning to sell Bitcoins for Dwolla starting sometime this summer.  The fees will be substantially lower since they only charge $0.25 per transaction.  Of course, this will only help US customers.

[eMansipater]

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.

This is great!  For newcomers to the OTC web of trust, would it be possible to earn a few trust points through repeated purchasing?  I know I've used CoinPal relatively often since its inception, so as my initial purchases pass the maximum time for chargebacks that ought to be worth a point or two, no?

[mndrix]

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.

This is great!  For newcomers to the OTC web of trust, would it be possible to earn a few trust points through repeated purchasing?  I know I've used CoinPal relatively often since its inception, so as my initial purchases pass the maximum time for chargebacks that ought to be worth a point or two, no?

Definitely.  Eventually, this will be automated.  Until then, link your GPG account to your CoinPal account (as mentioned above).  Then PM me on IRC asking that I rate you for CoinPal orders

[eMansipater]

CoinPal now offers increased purchase limits for buyers with good OTC ratings (ranging from 10 to 120 BTC per week).  More details are available at the bottom of the purchase limits page.  Of course, people can still use CoinPal without knowing anything about PGP or OTC.

This is great!  For newcomers to the OTC web of trust, would it be possible to earn a few trust points through repeated purchasing?  I know I've used CoinPal relatively often since its inception, so as my initial purchases pass the maximum time for chargebacks that ought to be worth a point or two, no?

Definitely.  Eventually, this will be automated.  Until then, link your GPG account to your CoinPal account (as mentioned above).  Then PM me on IRC asking that I rate you for CoinPal orders

Cool, will do.

[mndrix]

I had another wave of fraudulent orders last night.  CoinPal is down for maintenance until I can make some more anti-fraud adjustments.  Hopefully I'll be able to reopen later tonight.

CoinCard is still operating as normal

[dacoinminster]

I had another wave of fraudulent orders last night.  CoinPal is down for maintenance until I can make some more anti-fraud adjustments.  Hopefully I'll be able to reopen later tonight.

Ugh. That stinks. How bad was it?

Remember my idea about using a physical letter to a physical address? All you need is to hook into a service like L-Mail and send the buyer a verification code to their mailing address, and you can have strong proof that the account isn't stolen.

I also think you should automate your SMS verification so you can run that before a new buyer places their first order.

[mndrix]

Ugh. That stinks. How bad was it?

I probably won't know the full extent for another couple weeks.  It's bad enough that I need to make some reasonable changes, but not bad enough to quit yet

Remember my idea about using a physical letter to a physical address? All you need is to hook into a service like L-Mail and send the buyer a verification code to their mailing address, and you can have strong proof that the account isn't stolen.

I also think you should automate your SMS verification so you can run that before a new buyer places their first order.

Thank you for the ongoing suggestions. I've been testing both of these techniques for the last couple months.  I don't yet have enough data to expand them to all purchases yet.

[morpheus]

Anyone still looking to buy bitcoin with Paypal while mndrix's service is down can use my service: http://bitcoinmorpheus.tumblr.com/

[mndrix]

I wasn't able to finish all the changes today.  I'll try and reopen the site for trusted buyers (those with a purchase limit over 40 BTC per week) tomorrow morning.  Until then, I can vouch for morpheus' service.  I've purchased from him before with excellent results.

[mewantsbitcoins]

mndrix, in my opinion your service is vital to the expansion of this community. I recently come back to Bitcoins after about a year out of touch and only stayed here because I was able to purchase some Bitcoins via CoinPal. I am sure morpheus' service is a viable option, but instantanious transactions is what today's public is expecting

One idea I had was - you could limit number of transactions/time period. I know you already have 40/a day, but I think it should be more restrictive. The amount could stay the same but lets say you only do 40/week/person. This would limit the damage in case of fraud while still allowing legit users to get their initial 40 Bitcoins and participate in the community, playing bitlotto or whatever. With time restriction could be lifted

[Ricochet]

Isn't the limit already 40 BTC per week, not per day?

[mewantsbitcoins]

yes, just checked. my mistake.

maybe it should be 40/2 weeks then

[error]

Last time I checked, most of PayPal's internal fraud detection took place within the hour after the transaction. And while they send an email in the case of such a suspicious transaction, I don't recall whether anything comes across the API. In any case, if it came down to it, I'd be willing to wait an hour versus not having the service at all.

[mndrix]

Thank you all for the suggestions and comments.  I agree that near-instant Bitcoin sales help the community.  I'm not sure I'd be working on Bitcoin if the old Bitcoin Gateway hadn't been open the night I read Satoshi's paper.  I'll do what I can to keep the site open.

The current plan is to reduce the purchase limit for first-time buyers back to approximately $20 (essentially what mewantsbitcoins suggested).  That was the limit when I started, but Bitcoin appreciation has pushed it closer to $40 recently.  I'll also be changing the purchase limits for returning customers based on the chargebacks I've seen.  There will also be some behind-the-scenes changes which I can't describe in detail.

error, PayPal does report chargebacks through their API.  I'll keep the 1 hour window in mind. Thanks.

I also plan to enhance integration with the #bitcoin-otc web of trust, for those who want to participate.  I think the WOT makes many exciting Bitcoin projects possible.  If it were strong already, my work at CoinPal would be much easier

[mndrix]

CoinPal is open again for trusted customers.  If you bought Bitcoins from the site more than 7 days ago, you fall into that category.  Of course, beta testers and those with OTC ratings are trusted as well.  I'm still planning to reopen to the public later today.

[dacoinminster]

Being able to quickly and easily buy bitcoins is essential to their success, but the seller in such an enterprise is a HUGE fraud magnet.

Here's some other ideas:
 - Transfer the coins in installments, i.e. 10% of your order per hour
 - Bigger fees for first-time buyers
 - Add donation addresses to your forum post signatures and web pages so we can help support this essential service
 - Consider everyone a scammer until proven otherwise!

On Jan 7th, after some prodding by email, mndrix gave me this donation address, which I assume is still valid: 15VmbbyvpZQk7P4Vs7EvzYrGbtKTnW1f27

Obviously don't send anything there until he confirms it.

[mndrix]

CoinPal is open to the public again.  The donation address dacoinminster presented is correct.  I've put it in my signature in case others are inclined that way.

The only publicly visible change is that new customers can purchase only 20 BTC their first week.  After the first week, it goes up to 40 BTC.  After that, the old purchase limits apply.

[Meni Rosenfeld]

- Bigger fees for first-time buyers
 - Consider everyone a scammer until proven otherwise!

These are a bit problematic for a service supposed to be an easy entry point for newcomers.

The donation address dacoinminster presented is correct.

I don't mean to imply dacoinminster is untrustworthy, but it's good practice to quote such things for preservation.