[ANN] LocalBitcoins.com - a location-based bitcoin to cash marketplace

[AlexNeto]

How do you sort ads in the list?

[kangasbros]

How do you sort ads in the list?

Distance from the location either determined by IP address or entered by the user. Also can be directly some URL:

https://localbitcoins.com/country/<countrycode> for example:
https://localbitcoins.com/country/US
https://localbitcoins.com/country/DE etc

https://localbitcoins.com/location/<countrycode>/<location> for example:
https://localbitcoins.com/location/US/New%20York/
https://localbitcoins.com/location/DE/Berlin/
https://localbitcoins.com/location/DE/Graefestrasse%2077,%20Berlin/ <- Room 77!

Or by zipcode:
https://localbitcoins.com/zipcode/FI/00100/

[AlexNeto]

Ok, but how one ad (or user) get higher priority in the listing then other? Who get on the top?
I though that depends of number or confirmed trades, but seems not only. What is the algorithm?

[theymos]

I feel like a handful of people could basically ruin the entire site by constantly creating new accounts and offering to buy/sell Bitcoins but then not showing up to trades. This attack doesn't cost anything other than a bit of time. LocalBitcoins would then be very difficult to start using because no one would ever trust users without previous trades. Is there anything in place now or planned to prevent this?

[giszmo]

I feel like a handful of people could basically ruin the entire site by constantly creating new accounts and offering to buy/sell Bitcoins but then not showing up to trades. This attack doesn't cost anything other than a bit of time. LocalBitcoins would then be very difficult to start using because no one would ever trust users without previous trades. Is there anything in place now or planned to prevent this?

Even trades and ratings are free to fake.

[kangasbros]

I feel like a handful of people could basically ruin the entire site by constantly creating new accounts and offering to buy/sell Bitcoins but then not showing up to trades. This attack doesn't cost anything other than a bit of time. LocalBitcoins would then be very difficult to start using because no one would ever trust users without previous trades. Is there anything in place now or planned to prevent this?

Even trades and ratings are free to fake.

Not really on localbitcoins.com. Only the trades which have used the localbitcoins transaction/escrow feature can gain reputation/feedback. Also we keep now also track of the trading volume of inviduals, and this is shown on the public profile (not exactly for privacy reasons, but if it is under 25 BTC, 25-150 or above 150 BTC).

On the other hand we have gotten lots of feedback that leaving feedback without using the escrow/transaction should be possible. On the other hand, all kind of one-time accounts, crappy ads, etc are a problem already. If we allow leaving feedback without any kind of confirmation that a trade has actually occurred, it would probably turn the system even more worse.

I'm familiar with the same problem as theymos - this is why I changed my trading policy. I used to go to meetings all over the town, now I only go to meetings near my workplace on daytime (cafes within few minutes walking). It works somewhat ok because my work place is pretty near the center of Helsinki.

I don't really have any good solution for this yet figured out.

[giszmo]

I feel like a handful of people could basically ruin the entire site by constantly creating new accounts and offering to buy/sell Bitcoins but then not showing up to trades. This attack doesn't cost anything other than a bit of time. LocalBitcoins would then be very difficult to start using because no one would ever trust users without previous trades. Is there anything in place now or planned to prevent this?

Even trades and ratings are free to fake.

Not really on localbitcoins.com. Only the trades which have used the localbitcoins transaction/escrow feature can gain reputation/feedback. Also we keep now also track of the trading volume of inviduals, and this is shown on the public profile (not exactly for privacy reasons, but if it is under 25 BTC, 25-150 or above 150 BTC).

As far as I remember the escrow works without fees, so where does it cost a scammer to fake transactions?

To be honest I don't totally trust lb to not loose my bitcoins so I traded more than 150BTC with people I met there without using the escrow. I now have a list of people that I can contact for future trades without even touching lb. I know I might damage lb or my own profile on lb by not acting as planned but loosing 100BTC is not an option. I only do in person trades and it always works like that:
We meet, we chat, we go to a cafe, we show cash, we send the bitcoins and after the first or second confirmation pass the cash. If the business gets more hectic some day and chatting 20minutes with some stranger about bitcoin becomes annoying, and lb is in business much longer, I guess your escrow (or any other well known green address) will help streamline the process.

On the other hand we have gotten lots of feedback that leaving feedback without using the escrow/transaction should be possible. On the other hand, all kind of one-time accounts, crappy ads, etc are a problem already. If we allow leaving feedback without any kind of confirmation that a trade has actually occurred, it would probably turn the system even more worse.

lb for me is a listing of potential scammers that I have to be very very careful with when doing a trade. The escrow as the only thing that adds value to the actual transaction is of no value to me. Any green address would do as I do in person trades and these work by sending the bitcoins first anyway.
If you want to add value to using lb, you could take deposits. Merchants could be listed also by the deposit they put into lb. This deposit would get a 2 weeks delay when withdrawing it, so a merchant scamming others would risk his deposit in case these others can proof to you that they were scammed. Sadly this requires trusting you to not run with the money but multisig can help. The funds will be released as soon as both your and my sig confirm the return of the funds. If you refuse to sign (usually for 2 weeks but on dispute this can be extended indefinitely), these bitcoins essentially get destroyed. I would favor this over you holding the bitcoins putting you into the position of holding many many bitcoins to potentially "loose" although this way the victim can not be paid with such funds.

[kangasbros]

As far as I remember the escrow works without fees, so where does it cost a scammer to fake transactions?

There is 1% fee from the advertiser side on succesfull trades. The contacter side is feeless.

[kangasbros]

To be honest I don't totally trust lb to not loose my bitcoins so I traded more than 150BTC with people I met there without using the escrow. I now have a list of people that I can contact for future trades without even touching lb. I know I might damage lb or my own profile on lb by not acting as planned but loosing 100BTC is not an option. I only do in person trades and it always works like that:
We meet, we chat, we go to a cafe, we show cash, we send the bitcoins and after the first or second confirmation pass the cash. If the business gets more hectic some day and chatting 20minutes with some stranger about bitcoin becomes annoying, and lb is in business much longer, I guess your escrow (or any other well known green address) will help streamline the process.

Btw just to add, we have no problems people not using our transaction/escrow feature. I think our business strategy as "freemium" - free to use site, but there are additional features which cost money.

The trust issues are understandable. However I would like to say that we are not in any way anonymous, but a registered company in Finland (and I'm pretty public figure myself as the head of the company).

[savetheinternet]

I haven't been following the discussion here so maybe I missed some talk about this, but is there now no way to tell who left you what feedback? This isn't really a big issue, but I don't see why you would remove that.

Great site! Thanks!

[Grinder]

How about at least purging old ads once in a while? I still see the ads that I responded to with no reply more than 3 months ago. It almost feels like some kind of twilight zone. Several ads for my region, but my messages are always is just being ignored, and now I've pretty much given up. Most of them have text that seem too localized to be fake, so I'm not sure if it's just because nobody wants to trade with me.

[kangasbros]

How about at least purging old ads once in a while? I still see the ads that I responded to with no reply more than 3 months ago. It almost feels like some kind of twilight zone. Several ads for my region, but my messages are always is just being ignored, and now I've pretty much given up. Most of them have text that seem too localized to be fake, so I'm not sure if it's just because nobody wants to trade with me.

Hmm weird, if the accounts are not active for one month, the ads should be removed. I'll research the case. If you want to help, send me the ad ids by private message.

[giszmo]

Maybe use the reply times of users and publicly show the average or median reply time.

The trust issues are understandable. However I would like to say that we are not in any way anonymous, but a registered company in Finland (and I'm pretty public figure myself as the head of the company).

There is always the plausible deniability when you got "hacked" and the daughter that got cancer kind of urgency. Sorry but bitcoin is designed to have you get away with any scam. When I feel like you are earning 100€/day I wouldn't feel save if there were 300.000€ laying around on your servers. If you earn 1000€ per day with 100.000€ on your server, I would feel very confident that you would not risk loosing that business through neither a fake nor a real hack.

[kangasbros]

There is always the plausible deniability when you got "hacked" and the daughter that got cancer kind of urgency. Sorry but bitcoin is designed to have you get away with any scam. When I feel like you are earning 100€/day I wouldn't feel save if there were 300.000€ laying around on your servers. If you earn 1000€ per day with 100.000€ on your server, I would feel very confident that you would not risk loosing that business through neither a fake nor a real hack.

I realize the risks and issues, I have been pretty long involved with bitcoin.

The original question was, if you should trust us, and the answer seems to be no. We are not advocating trust towards us in a way or another, if people think that we are trustworthy they can use our services if they want.

We understand that there is possibility for business models which require less trust than escrow & commission (for example green addresses and multisig escrows), but I don't believe in the viability of these at least in the short-term. Our focus and mission is to enable bitcoin economy for the newcomers and newbies. Most of these don't know what is a green address, or multisig, and probably don't care either.

In fact, we removed the "bitcoin address" option from the contact form because it was causing us constant support questions. People didn't understand what the bitcoin address meant, some put the wrong address there etc. We try to make the processes simpler and streamlined so that some day my grandma could by her first bitcoins via our service.

[Stephen Gornick]

updated the 2-factor authentication to production. Works with google authenticator.

From the site:

Important notice
Always write down your authentication key! You will not be able to log in to your account in case you lose your mobile device.

So let's say I didn't print (or write down) the secret/authentication key and did lose my phone.   Is the loss of access to the account permanent (i.e., funds gone forever)?   

Please consider offering the ability to give an exit address where there is a sane method of recovery if both my phone and the securely-stored authentication code is lost.
 - http://en.bitcoin.it/wiki/Exit_Address

[kangasbros]

So let's say I didn't print (or write down) the secret/authentication key and did lose my phone.   Is the loss of access to the account permanent (i.e., funds gone forever)?

Please consider offering the ability to give an exit address where there is a sane method of recovery if both my phone and the securely-stored authentication code is lost.
 - http://en.bitcoin.it/wiki/Exit_Address

Thanks for the idea again, I will implement it.

I have been thinking also about auto-withdraw-address or more optimal would be auto-withdraw-master public key so that it would offer better privacy.

[AlexNeto]

Bug:

Working with "Escrow" - I receive my own messages to email, but not buyer's.

[kangasbros]

Bug:

Working with "Escrow" - I receive my own messages to email, but not buyer's.

Thanks for the report, will fix ASAP!

[giszmo]

Bug: I just saw my contact #4080 claiming we were discussing a 56000€ deal. That's not my league. I had it configured to be a 56000CLP deal and as I added € deals later, it must have changed the old CLP deal.

[kangasbros]

Bug: I just saw my contact #4080 claiming we were discussing a 56000€ deal. That's not my league. I had it configured to be a 56000CLP deal and as I added € deals later, it must have changed the old CLP deal.

Hi, should be fixed now. Thanks for reporting. The bug caused for some old ads to show wrong currency, if the advertisement currency is changed.