Decentralized exchange Bitsquare crowdfunding campain now live!

[QuestionAuthority]

That's the way it works with OTC exchanges like bitcoin.de, they just act as escrow and an order book and I've never had a problem with it in over two years, some scammers try it but not often and if its not cleared in a week or so the coins are returned. Ymmv of course but 10k euro transactions are the point where banks are expected to have a look and make sure everything's legit and most users will be well below that. Not sure about the rest of the worlds but Fiador bank in Germany understand crypto's (bitcoin.de are connected to them in some way) and Germany's well up on it too so if the dinosaur's give any trouble in this part of the world there's at least one to move to.

I could see it working with a huge network of registered users bank accounts being drawn from all over the world for very small amounts per account. But if a large transaction hits a single U.S. account from several hundred accounts worldwide that would create questions and possibly an investigation. These controlled accounts would have to be from Bitcoin users, right? Are we all expected to link a personal bank account to use the service or are the accounts controlled by someone?

Idk, it took me half the day just to figure out where to download Lighthouse, didn't want to fight with git and java and thought the pictures just meant penguin friendly Bitsquare didn't want to play for the same reason as OpenBazzar, ports blocked by ISP.

The whitepaper's fairly detailed but not gone over it much yet:
https://bitsquare.io/bitsquare.pdf

Vids:
http://vimeo.com/getbitsquare/

Would be interested in hearing some details on methods of handling fiat too, and what sort of time the devs are able to devote to the project.

EDIT: Couple of others too, messaging and trust/unsuccessful trades? I'd imagine this could get spammed with fake offers even with the deposit.

It will be interesting to see if this ever happens. As it looks now, this has no chance of actually working while being decentralized.

[1714901259]

1714901259

[1714901259]

1714901259

[1714901259]

1714901259

[1714901259]

1714901259

[Kazimir]

I'd like to donate, but every single time I run the lighthouse installer, I get this:



I'll try again in a few weeks, hopefully the people over at Lighthouse are still developing on their software.

[DahRookie]

That's the way it works with OTC exchanges like bitcoin.de, they just act as escrow and an order book and I've never had a problem with it in over two years, some scammers try it but not often and if its not cleared in a week or so the coins are returned. Ymmv of course but 10k euro transactions are the point where banks are expected to have a look and make sure everything's legit and most users will be well below that. Not sure about the rest of the worlds but Fiador bank in Germany understand crypto's (bitcoin.de are connected to them in some way) and Germany's well up on it too so if the dinosaur's give any trouble in this part of the world there's at least one to move to.

I could see it working with a huge network of registered users bank accounts being drawn from all over the world for very small amounts per account. But if a large transaction hits a single U.S. account from several hundred accounts worldwide that would create questions and possibly an investigation. These controlled accounts would have to be from Bitcoin users, right? Are we all expected to link a personal bank account to use the service or are the accounts controlled by someone?

Idk, it took me half the day just to figure out where to download Lighthouse, didn't want to fight with git and java and thought the pictures just meant penguin friendly Bitsquare didn't want to play for the same reason as OpenBazzar, ports blocked by ISP.

The whitepaper's fairly detailed but not gone over it much yet:
https://bitsquare.io/bitsquare.pdf

Vids:
http://vimeo.com/getbitsquare/

Would be interested in hearing some details on methods of handling fiat too, and what sort of time the devs are able to devote to the project.

EDIT: Couple of others too, messaging and trust/unsuccessful trades? I'd imagine this could get spammed with fake offers even with the deposit.

It will be interesting to see if this ever happens. As it looks now, this has no chance of actually working while being decentralized.

You shouldn't make judgements without fully understanding the concept. That's just unfair.

Indeed, the whole project is quite complex and there's a lot to read. That is necessary to make it secure. The user experience will not reveal any of that. In fact, in a perfect trading situation, it's not more than a couple of clicks and at 1 point the wait for 1 blockchain confirmation.

Bitsquare will not allow very big transactions, there will be a hard limit. You can use your personal bank account or any other payment provider that offers a sufficiantly hard to reverse payment method. Nothing points at bitcoin if you don't put it in some message field.

Bitsquare does not handle fiat at all. Bitsquare is not even a company. Fiat is handled by the trading peers. A sends money to b, that is one of the most common things in the traditional banking system. In fact Bitsquare's no more than a self-sustaining p2p platform with a distributed dht offer-book and an arbitration system to handle disputes.

You won't have to trust a third party, that's the whole point of it: No single points of failure!

We have two full-time devs at the moment. That would change possibly if the funding is not successful. Remember the working alpha version is self-funded.

[k99]

If you are really interested how Bitsquare works please check out our official resources.
We have prepared all information from hi-level (videos, FAQ) to very detailed (whitepaper, related papers). If you have read that all and understood and there are still open questions please ping us on our mailinglist. You can find all resources easily on our webpage (https://bitsquare.io/).

[Kazimir]

You won't have to trust a third party, that's the whole point of it: No single points of failure!

Just one thing that I don't fully understand yet, can you explain this:

Suppose I want to buy 10 BTC on BitSquare. I see an offer from someone selling 10 BTC for $2500 and I accept it. I transfer $2500 to some bank account, and 0.1 BTC security deposit to some multi-sig address.

Now, nothing happens. I wait, I get no acknowledgement, no 10 BTC, no nothing. What do I do now to get my $2500 and 0.1 BTC back?

It's just a hypothetical situation, but exactly what mechanism prevents the above scenario from happening?

[QuestionAuthority]

You won't have to trust a third party, that's the whole point of it: No single points of failure!

Just one thing that I don't fully understand yet, can you explain this:

Suppose I want to buy 10 BTC on BitSquare. I see an offer from someone selling 10 BTC for $2500 and I accept it. I transfer $2500 to some bank account, and 0.1 BTC security deposit to some multi-sig address.

Now, nothing happens. I wait, I get no acknowledgement, no 10 BTC, no nothing. What do I do now to get my $2500 and 0.1 BTC back?

It's just a hypothetical situation, but exactly what mechanism prevents the above scenario from happening?

I think he just explained it can't do that. It's for very small transactions. I'm not sure it's fair to call it an exchange but I do see an audience for it.

[Kazimir]

I think he just explained it can't do that. It's for very small transactions. I'm not sure it's fair to call it an exchange but I do see an audience for it.

I'd say $2500 fits the "small transactions" label? Or at least it should, when we're discussing P2P Bitcoin trading.

[k99]

I think he just explained it can't do that. It's for very small transactions. I'm not sure it's fair to call it an exchange but I do see an audience for it.

I'd say $2500 fits the "small transactions" label? Or at least it should, when we're discussing P2P Bitcoin trading.

From th PDF, page 11:

Dispute
There will be a warning notifications to both traders at the middle of the timeout period if the
trade has not completed. As soon the timeout is reached the waiting trader who has not
received their payment can contact the arbitrator.
The waiting trader sends a request to the arbitrator with the contract attached and a description
of the problem.
The arbitrator has to find a fair solution and per contract terms will contact both traders and
perform any other contractually pre-determined due diligence.
After the arbitrator has decided in favor of one trader he will contact the winning party to sign a
new payout transaction where he takes the security deposit from the losing party as his dispute
payment and the bitcoin payment and security deposit will go to the winning party.
The winning party will have no costs. The losing party will lose his security deposit.
In cases where the problem was caused by external circumstances (e.g. bank has blocked the
transfer, etc.), the arbitrator will take half of each security deposits as his payment and refund
the rest back to the traders.
More details about the arbitration system can be found in the “Arbitration System” document.

https://bitsquare.io/bitsquare.pdf
https://bitsquare.io/arbitration_system.pdf

Thanks!

[Jace]

I couldn't get Lighthouse running on Windows. I installed it on Mac, downloaded the BitSquare project file, did a donation. It was there yesterday, but now I don't see it anymore..?

[Kazimir]

The waiting trader sends a request to the arbitrator with the contract attached and a description
of the problem.
The arbitrator has to find a fair solution and per contract terms will contact both traders and
perform any other contractually pre-determined due diligence.

But what would happen if I receive and hear nothing after I wired my $2500? Not from the seller, not from the arbitrator, nothing?

[DahRookie]

The waiting trader sends a request to the arbitrator with the contract attached and a description
of the problem.
The arbitrator has to find a fair solution and per contract terms will contact both traders and
perform any other contractually pre-determined due diligence.

But what would happen if I receive and hear nothing after I wired my $2500? Not from the seller, not from the arbitrator, nothing?

I'm not sure what you're trying to do here. This situation is very unlikely to happen. Bitsquare lowers the incentive for scammers as much as possible by a set of measures.

The arbitrator is a more or less randomly chosen person to solve cases where one trade participant is cheating. If you're not happy with the decision of the arbitrator (unlikely case of collusion between the arbitrator and the scammer) you can call another arbitrator. The case will be looked into and in case of collusion, arbitrator rights plus arbitrator security deposits (which is at least two times the trade volume) will be taken from the colluding arbitrator.

Again, all of this is very unlikely to happen because there are no real incentives for cheaters to do so.

[DahRookie]

I couldn't get Lighthouse running on Windows. I installed it on Mac, downloaded the BitSquare project file, did a donation. It was there yesterday, but now I don't see it anymore..?

I'm not sure what happened there. Could you please open an issue at the Lighthouse github: https://github.com/vinumeris/lighthouse/issues

Alternatively, you could donate to the address on our 'contribute' page: https://bitsquare.io/contribute/ . We might use donations from there to fill-up Lighthouse donations:

33KyHsPZcCqNVNaqK3jbx9aeubGaXgLgzt

Anyway, thanks for considering a donation.

[Carlton Banks]

Alternatively, you could donate to the address on our 'contribute' page: https://bitsquare.io/contribute/ . We might use donations from there to fill-up Lighthouse donations:

1BVxNn3T12veSK6DgqwU4Hdn7QHcDDRag7

You guys really need to make this funding campaign much clearer. I love this project, it has such a lot of potential, but I can't donate knowing that:

• You've structured the funding rounds in a way that could make the decision to donate regrettable
• You have at least 2 funding streams, and no explanation of how these two are accounted for in respect of each other

This would matter less if you were not asking for so much money. Surely it's better to try to encourage as many bold donations as possible?

[k99]

Alternatively, you could donate to the address on our 'contribute' page: https://bitsquare.io/contribute/ . We might use donations from there to fill-up Lighthouse donations:

1BVxNn3T12veSK6DgqwU4Hdn7QHcDDRag7

You guys really need to make this funding campaign much clearer. I love this project, it has such a lot of potential, but I can't donate knowing that:

• You've structured the funding rounds in a way that could make the decision to donate regrettable
• You have at least 2 funding streams, and no explanation of how these two are accounted for in respect of each other

This would matter less if you were not asking for so much money. Surely it's better to try to encourage as many bold donations as possible?

I think when you read the information published on our crowd funding page (https://bitsquare.io/crowdfunding/) it should be pretty clear. Use our official sources at primary information source.

The crowd funding works with Lighthouse and is an all-or-nothing model. 120 BTC is the goal and the campaign ends on 9th of february (midnight UTC 0).
The regular donation address on our webpage was always there and is independent from the crowd funding.

As people mentioned out in forums or reddit that the min. pledge of 0.175 BTC might be too hight for some people, they discussed some ideas with sub projects or using the regular donation address and sum that up to the campaign. I will see how it goes until the end of the campaign, and if it is the case that we miss the goal but would reach it with the donations at the regular donation address, I will move that money over to the campaign. But that is hypothetical and if you check the amount dontated at the regular donation address, it does not look like it has any substantial influence of the success of the campaign.

[Kazimir]

I'm not sure what you're trying to do here. This situation is very unlikely to happen. Bitsquare lowers the incentive for scammers as much as possible by a set of measures.

I think I understand the basics, especially how there is an incentive for both buyers and sellers to NOT try and commit fraud or cheat (as it would only *cost* them money). But I'm trying to pinpoint how or where the trust factor comes into play.

If I want to buy bitcoins, I accept an order, and wire my USD or EUR, to whom or where do I wire it? Directly to the seller, or to an unknown intermediary? If at any point the arbitrator controls my wired funds and/or our security deposits, how can we (both me and the seller) be sure the arbitrator doesn't disappear with my fiat?

The arbitrator is a more or less randomly chosen person to solve cases where one trade participant is cheating. If you're not happy with the decision of the arbitrator (unlikely case of collusion between the arbitrator and the scammer) you can call another arbitrator. The case will be looked into and in case of collusion, arbitrator rights plus arbitrator security deposits (which is at least two times the trade volume) will be taken from the colluding arbitrator.

Ah, OK, I didn't notice that before, that's good. But who or what controls his security deposit, or where does an arbitrator send his security payment to?

Thanks again, trying to get BitSquare's security mechanism as clear as possible.

[newIndia]

I have a Q regarding how bitsquare operates. I was checking the website & the whitepaper. The basic functionality is well explained in the following image...



But, it is an ideal situation. What happens when...

1. Without sending the FIAT, Alice claims that she has sent it ?

2. After receiving the FIAT, Bob claims he has not received it ?

If there is no manual intervention, then who will make these decisions ? There must be an escrow and by using that escrow, we are eventually back to that centralized structure. I think LocalBitcoins or similar escrow based exchanges will be far more trusted than a BitSquare.io escrow, because their business is trust and their identities are known, which is not the case for anonymous escrows of BitSquare.io .

[k99]

I'm not sure what you're trying to do here. This situation is very unlikely to happen. Bitsquare lowers the incentive for scammers as much as possible by a set of measures.

I think I understand the basics, especially how there is an incentive for both buyers and sellers to NOT try and commit fraud or cheat (as it would only *cost* them money). But I'm trying to pinpoint how or where the trust factor comes into play.

If I want to buy bitcoins, I accept an order, and wire my USD or EUR, to whom or where do I wire it? Directly to the seller, or to an unknown intermediary? If at any point the arbitrator controls my wired funds and/or our security deposits, how can we (both me and the seller) be sure the arbitrator doesn't disappear with my fiat?

The arbitrator is a more or less randomly chosen person to solve cases where one trade participant is cheating. If you're not happy with the decision of the arbitrator (unlikely case of collusion between the arbitrator and the scammer) you can call another arbitrator. The case will be looked into and in case of collusion, arbitrator rights plus arbitrator security deposits (which is at least two times the trade volume) will be taken from the colluding arbitrator.

Ah, OK, I didn't notice that before, that's good. But who or what controls his security deposit, or where does an arbitrator send his security payment to?

Thanks again, trying to get BitSquare's security mechanism as clear as possible.

You do the Fiat transfer directly to your trade peer via online banking or whatever method you choose. Similar like LocalBitcoin.
The Bitcoin is held in 2of3 MultiSig. Keyholders are both traders and an arbitrator.
The security deposit of the arbitrator is held in a 4of6 MS. Keyholders are the "supreme court" arbitrators which are the arbitrators with the highest reputation (not anonymous, higher security deposit, many cases solved successfully). If an arbitrator colludes or does not meet defined quality standards, he will lose all his security deposit, which is in any case much more what he can win when trying to cheat.

If you are interested in more details please read our whitepaper and the related papers about the arbitration system and risk analysis or check out the videos.

[DahRookie]

I have a Q regarding how bitsquare operates. I was checking the website & the whitepaper. The basic functionality is well explained in the following image...

But, it is an ideal situation. What happens when...

1. Without sending the FIAT, Alice claims that she has sent it ?

2. After receiving the FIAT, Bob claims he has not received it ?

If there is no manual intervention, then who will make these decisions ? There must be an escrow and by using that escrow, we are eventually back to that centralized structure. I think LocalBitcoins or similar escrow based exchanges will be far more trusted than a BitSquare.io escrow, because their business is trust and their identities are known, which is not the case for anonymous escrows of BitSquare.io .

You should really read the white paper.  It addresses all of your worries and is a quick read. Regarding 1. and 2. the decentralized arbitration system steps into place. LBTC uses centralized escrow and holds funds.

[newIndia]

I have a Q regarding how bitsquare operates. I was checking the website & the whitepaper. The basic functionality is well explained in the following image...

But, it is an ideal situation. What happens when...

1. Without sending the FIAT, Alice claims that she has sent it ?

2. After receiving the FIAT, Bob claims he has not received it ?

If there is no manual intervention, then who will make these decisions ? There must be an escrow and by using that escrow, we are eventually back to that centralized structure. I think LocalBitcoins or similar escrow based exchanges will be far more trusted than a BitSquare.io escrow, because their business is trust and their identities are known, which is not the case for anonymous escrows of BitSquare.io .

You should really read the white paper.  It addresses all of your worries and is a quick read. Regarding 1. and 2. the decentralized arbitration system steps into place. LBTC uses centralized escrow and holds funds.

I have read the whitepaper indeed and then only asking Qs. Moreover, this is not first time I'm asking Q regarding Bitsquare.io or OpenBazaar as both of them have the same escrow dependency. Every time people actually tend to skip these Qs and point at the whitepaper which really does not address this issue.

My point is simple: As long as you have escrow dependency, you are not decentralized and trustless like Bitcoin network. Both Bitsquare.io or OpenBazaar are trying to give people a flavor of decentralized and trustless network, though in reality they are relying on a faulty trust system like BitcoinTalk's DefaultTrust.

[k99]

I have a Q regarding how bitsquare operates. I was checking the website & the whitepaper. The basic functionality is well explained in the following image...

But, it is an ideal situation. What happens when...

1. Without sending the FIAT, Alice claims that she has sent it ?

2. After receiving the FIAT, Bob claims he has not received it ?

If there is no manual intervention, then who will make these decisions ? There must be an escrow and by using that escrow, we are eventually back to that centralized structure. I think LocalBitcoins or similar escrow based exchanges will be far more trusted than a BitSquare.io escrow, because their business is trust and their identities are known, which is not the case for anonymous escrows of BitSquare.io .

You should really read the white paper.  It addresses all of your worries and is a quick read. Regarding 1. and 2. the decentralized arbitration system steps into place. LBTC uses centralized escrow and holds funds.

I have read the whitepaper indeed and then only asking Qs. Moreover, this is not first time I'm asking Q regarding Bitsquare.io or OpenBazaar as both of them have the same escrow dependency. Every time people actually tend to skip these Qs and point at the whitepaper which really does not address this issue.

My point is simple: As long as you have escrow dependency, you are not decentralized and trustless like Bitcoin network. Both Bitsquare.io or OpenBazaar are trying to give people a flavor of decentralized and trustless network, though in reality they are relying on a faulty trust system like BitcoinTalk's DefaultTrust.

The decentralized arbitration system works in a way that everybody can become an arbitrator. To avoid collusion or misbehaviour the arbitrator need to pay in a high security deposit to a 4of6 multisig. Keyholders are surpreme court arbitrators. Surpreme court arbitrators are those with the highest reputation. Reputation is derived form higher security deposit, many solved cases and real life ID. Traders select a number of arbitrators which the are willing to accept. You can only trade with another who has at least 1 arbitrator in common. If there are more in common, selection is done in a unswayable way, to avoid additional to the protection from sec. deposit collusion risk.

More details can be found here:
https://bitsquare.io/bitsquare.pdf
https://bitsquare.io/arbitration_system.pdf
https://bitsquare.io/risk_analysis.pdf

https://bitsquare.io/blog/bitsquare-arbitration-system/
https://bitsquare.io/blog/bitsquare-protection-mechanisms/

Hope that helps.