Using two-factor authentication on Localbitcoins.com

We've recently updated LocalBitcoins.com login process. While it's simplified and more clear, the previously omnipresent two-factor authentication code was obscured. But two factor authentication is still there, and stronger than ever!

Why two-factor authentication?

Security! Normal logins are simply something you know: you know your username and password.  Two factor login adds a new vector, such as something physical you have. This physical token could be a smart card, a dongle or a phone: all it needs to do is provide a way to prove its existence as needed. The simplest way is to generate a series of numbers based on a shared secret and the current time: any series of numbers is only valid for a short time, making it useless afterward.

 

How to use two-factor authentication?

Our two factor authentication process is based on Google Authenticator mobile application. It requires a smartphone (Android / iPhone) .

Once you have Google Authenticator installed, just point your browser to your profile edit page on LocalBitcoins.com (click your username after log in) and scroll down to the two factor authentication title. Open the Authenticator application on your mobile phone, choose Set Up New Account and scan the QR barcode code from your account page. Write down the secret key below the QR code and store safely, preferably separate from your main computer. The secret key can be installed on a new smartphone later, allowing you to continue logging in to LocalBitcoins.com.

That's all. Try it out by logging out and back in. After you enter your login details, you will be prompted for the Authenticator code at the moment. With the authenticator app punch in the code displayed.

If you have problems logging in with the Authenticator, just contact our support through feedback form.

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Tech Feed News Talks Bitcoin Regulation at Bitcoin 2013

Interviews include Buttercoin, Gavin Andresen, Patrick Murck (general counsel, Bitcoin Foundation), and Dan Friedberg (lawyer).

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Signing and verifying documents with Bitcoin

Digital signing system verifies that any document can be proven by to be signed by a certain party.

What's a digital signature?

Bitcoin comes with a way to sign any data. The private and public key pair Bitcoin itself is based on is needed for signing transactions, but they are not restricted to that. Of particular interest is signing documents.

The document signature can connect a specific Bitcoin address and a document together, proving that the Bitcoin address owner has personally approved the document. A signature looks like this:

IJ/17TjGGUqmEppAliYBUesKHoHzfY4gR4DW0Yg7QzrHUB5FwX1uTJ/H21CF8ncY8HHNB5/lh8kPAOeD5QxV8Xc=
 
Note that there is no whitespace in the signature.

LocalBitcoins.com uses Bitcoin to digitally sign its receipts

LocalBitcoins.com uses Bitcoin digital signatures for receipts that can be verified actually were written by Localbitcoins.com. We also have a convenient form for verifying any Bitcoin message without installing the Bitcoin software.

Let's follow through with an example. With the signature you can verify that LocalBitcoins.com's Bitcoin address 1Q1wVsNNiUo68caU7BfyFFQ8fVBqxC2DSc has signed, for example, the following message:

Localbitcoins.com will change the world

Changing the message, address or signature by just one letter makes the verification fail. Try it now on our online verification page!

Follow LocalBitcoins.com on Facebook, Twitter, Google+.

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Did Open Transactions Just Become a Legitimate Challenger to Ripple?

Last week, OpenCoin Inc. chief cryptographer David Schwartz was interviewed on the "Let's Talk Bitcoin" show. If you listen from 17:44, you'll hear his opinion on Open Transactions:

"In Open Transactions, nodes have to actively perform transactions, so you can't as easily have a public state of the network. So because the state of the [Ripple] network is public, if I want to make a payment to you, I can look at the exchange offers, I can look at the available liquidity in the network, and I can very easily find the cheapest path to make a payment to you.

In Open Transactions, I would have to go around to different servers and get quotes, and then the transactions can't really be atomic, they're working on it but they're not quite there yet, so if part of the transaction succeeds, and the second half fails, I can wind up with something that I was going to trade to pay you, but now I can't trade it, so I wind up with some asset that may be completely valueless... payments are atomic in Ripple, meaning the entire payment either succeeds or fails."

Today, Open Transactions developer FellowTraveler claims to have found "the Holy Grail," which is to use Bitmessage to allow for discovery across federated servers, server-to-server wiring of funds, escrow based conversion of currencies across federated OT servers, and the ability to send any currency p2p, all of this done without the issuance of credit or using a "pre-mined" currency.

Well, I am not a developer, so, the question is, have they done it? Is it now just a matter of who brings their product to market first?

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The Bitcoin Trader Goes to San Jose!

Wow, what a weekend. To be honest, I wasn't sure exactly what (or when) I was going to write about the conference, because it really was a personal experience more than anything else.

That being said, IT WAS A HELLUVA WEEKEND!!

I didn't take any notes, at all. Except for the couple-dozen tweets I sent out over the course of three days (hope you were following!), and the dozen-or-so business cards I collected, I'm relying strictly on memory here.


People I met in real life for the first time:

- Arthur Britto, a long-time Skype friend and confidant and developer for OpenCoin: what an upstanding individual, just as I expected. Ripple's lucky to have him.

- My co-blogger, Hazek. We sat at the same table for 10 minutes, talking amongst the group, before we even realized who the other person was. He's my co-blogger FFS! I blame the name tags that had the uncanny ability to flip over to the blank side (note for next year's organizers, print double-sided name tags!)

- Jon Holmquist formerly of Coinabul and now of BitcoinStore: fortunately he didn't turn up for the poker game on Sunday, because apparently he would've wiped the floor with us. We tried to get him to say something bad about Roger Ver, but he refused! =)

- Brian Santos: just like he is online, super-passionate, energetic, and charismatic. Once I saw UpTweet on an iPad Mini, I was convinced that he was on to something. Thanks for getting the BBA together for lunch, and damn the staff for not giving us tables!

- Blaine-the-guy-that-let-me-sell-him-BTC-for-cash: I showed up to the conference with $7 USD, a bunch of BTC, and a credit card. While we were waiting for Dan the Comedian to begin his performance (I thought he was hilarious, by the way), Blaine sold me $20 for BTC, which gave me enough money for tips and other incidental expenses. We met up again at the Bitcoin Fund after-party on Saturday and had a great chat about all things Bitcoin.

Dan Nainan warms up the crowd on Friday evening.

- David Schwartz, chief cryptographer for OpenCoin. Probably the smartest guy I've ever met, and more importantly, he's able to articulate his brilliant ideas in such a way that we can all understand them. I spent an hour or two hanging out in front of the Ripple booth and he could easily handle any question thrown at him. I can't say I'm surprised, after reading his posts on the forums or in Reddit (JoelKatz is his handle).

- Alex Kravets and Vinnie Falco, a couple of huge Ripple enthusiasts (we had a lot to talk about).

- The Tropos guys, Jon, Mark, Andrew, Eric, as well as Carl, all on the bleeding edge of finance, and I think they know it.

- Jesse from Kraken (and Ogrr): We didn't get to chat much (thanks for the nachos!), but you could definitely feel the vibe that him and his team was putting off that entire weekend; they know they're on to something big.

- A couple of the people behind Satoshi Square in NYC (sorry I forgot your names!), who recently found themselves in the media spotlight after holding an open-air Bitcoin exchange in New York

- Jerry, a guy who works in the construction business, and just wanted to know what this Bitcoin thing was all about.

- Frederic from Hong Kong: thank you for listening to my drunken Ripple promoting.

- Ludvig, known for the various funds and passthroughs that he manages. I bought my first Casascius coin from him. We go way back, so I was glad to meet him in real life for the first time. I don't think he was old enough to drink the Satoshinis.

Thanks to Satoshi Dice, we all had a good buzz on.

- James of VPS: super-nice guy who unfortunately got caught in between his investors and a disgraceful company called Butterfly Labs. I truly believe he has his investors' best-interests in mind.

- Gavin Andresen: introduced myself to him in the elevator for five seconds (damn those were some fast elevators at the Marriott!). Thanked him for his contributions and dedication.

- Athony Di Iorio and the Bitcoin Alliance of Canada: I went to the first Canadian Bitcoin meet-up after the conference ended on Saturday and I met up with some fellow Canadians who were in San Jose. Unfortunately I let myself get dragged away to talk business with another group, but there was an excellent turn-out and I had some fruitful conversations with my fellow countrymen!

- Ed of BitBrew: First there was Alpaca Socks, then there was BitBrew. It was awesome to meet one of the "old school" Bitcoiners at the after-party. He said, "everyone knows the Bitcoin Trader!" Unfortunately, not really, but thanks for making me feel like a celebrity for half a second.

- All the crazy guys who were at the poker game on Sunday, including Mike, who's like the George Clooney of Marriott rewards programs.

- Adam Harding of BIPS: Another awesome Canadian and great guy. You probably saw him working his booth for most of the weekend.

- Vitalik Buterin: the almost super-human writer for the Bitcoin Magazine, copies of which I saw in people's hands all weekend.

- Henry Brade: the Finnish Bitcoin juggernaut that often commented on my blog posts over the last couple of years. Like everyone I met at the conference, an enthusiastic, intelligent, and driven individual that will make (even more) of a name for himself in the Bitcoin sphere.

And the list goes on and on; my apologies to anyone I didn't mention. To those of you who gave presentations or sat on panels that I didn't get to meet up with, it was just as awesome to see you guys in the flesh, promoting the future of payments.

Like I said at the beginning of the post, for me the conference was an intensely personal experience. It wasn't about the booths or the presentations, but the people, and finally making the leap from virtual to tangible.

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Bitcoin News Bits - May 13th, 2013

I get quite a few emails from people looking to promote their products, services, events, and sites. Unfortunately I don't have the time to get back to everyone in a prompt manner, but I can assure you that all of your emails are read and I always take the time to check out your sites.

Here are the latest and greatest:

Pocket Rockets Casino - A new Bitcoin poker room (there are actually a bunch of new ones as of late) just opened up, called "Pocket Rockets Casino." They went live on April 16th. It's a great browser-based poker experience that just needs some players to get the ball rolling, which is usually the first big struggle for any poker site. They appear to be running some decent promotions to get bums in the seats, so be sure to check them out!


Silk Road - WhoisHostingThis.com put together a great infographic that questions the dependency of Bitcoin on Silk Road, and whether Bitcoin can survive without its most infamous service. Personally, I think if Silk Road disappeared, there would be another Silk Road ready to take its place. The bigger question being asked here is, "will anonymous transactions continue to be a mainstay of the Bitcoin economy?" I don't think there's any doubt about that.

Ripple Giveaway - If you were lucky enough to sign up to the Ripple email list prior to May 9th, then some free Ripples (XRP) are headed your way! Nobody knows how many are going to be given away this time around, but I'm going to venture a guess and say 1000ish to each person.

CoinCliff - Are you *still* staring at Bitcoinity or Clarkmoody, watching every Bitcoin trade? Well, stop! Get CoinCliff for Android (iOS coming soon) instead and set a variety of configurable alarms to let you get back to living your life again! By the way, if you've been staring at Bitcoin prices over the last week, you're more patient than I am.

The Bitcoin Catalog - Until I read The Bitcoin Catalog, I wasn't aware of how many Bitcoin sites existed that I hadn't even heard of; there are lots! The Bitcoin Catalog does a beautiful job of listing hundreds of Bitcoin-related sites, and would look great on a coffee table or in a waiting room. Be sure to take a look at the online .pdf version as well.

Inside Bitcoins (July 30th, NYC) - All eyes are focused on the Bitcoin 2013 conference, kicking off in San Jose this Friday (yours truly will be there). As a result, I bet most of you aren't aware that another big conference is planned just over two months later, on the east coast in New York City! "Inside Bitcoins" will take place at the New Yorker Hotel, and Charlie Shrem will be there to preach the good Bitcoin word!

WalletRSS - Looking for a way to track your Bitcoin transactions without opening your wallet? Check out WalletRSS and get real-time transaction info sent to the RSS applications that you already use!

BitcoinPaperWallet - One of the most secure ways to create a Bitcoin wallet is to do it on paper and store it safely. Keep in mind that no method is fool-proof, but BitcoinPaperWallet has done an amazing job of providing a free design for anyone looking to print their own paper Bitcoin wallet. Follow the additional security instructions for additional peace of mind.

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I was offered $550 to say that "Ripple is a Scam."

I received an interesting message in my bitcointalk.org inbox today. It said that a user going by the name of 'TradeFortress' was paying forum members 5 BTC to edit their posts in this thread to say that, "Ripple is a scam."

This is the exact text he wanted each user to post:

"Ripple is a scam! Ripple is a get rich quick scheme for it's creators, a private for-profit company. It is NOT open source. It is CENTRALIZED, akin to PayPal rather than Bitcoin. For more info, visit RippleScam.org."

Ironically, in the earlier days of Bitcoin (2010, 2011, and well into 2012), the same accusations were spread about Bitcoin. Bitcoin was a "Ponzi-scheme," "pyramid scheme," "scam," etc. The same Bitcoin supporters that fought these accusations tooth and nail are now saying the same thing about Ripple.


Ripple is led by Jed McCaleb (founder of MtGox, eDonkey) and Chris Larsen (e-loan, Prosper.com), both successful businessmen who do not have an interest in sullying their good names.

Arthur Britto, Stefan Thomas, and David Schwartz are major contributors to Ripple's development, and all played an active role in Bitcoin's early successes.

OpenCoin, the company overseeing Ripple, has already raised venture capital from firms led by the co-founders of PayPal and Netscape. These firms do not invest in scams, but in companies with unique ideas that will turn a significant profit if successful.

Ripple will only be successful if it's able to provide its users with the ability to send quick, cheap transactions to anyone, anywhere in the world, using any currency. Its intended goal is to let users do just that, in their currency of choice, as easy as it is to send an email.

Some Bitcoin users, like TradeFortress, are afraid of the idea of a central organization driving the development of such a capability. They think that if anyone is in charge, and if that anyone might turn a profit, then it's not in the best interest of anyone to use their service. Some Bitcoin users, like TradeFortress, are adamant about this, to the point that they're willing to pay out thousands of dollars worth of Bitcoin to get their message across. Ironically, a very large percentage of Bitcoin users are hoarding Bitcoins to do just that, turn a profit. Profit is fine for them, as long as it's just for them.

If Ripple is a scam, and its users are unable to take advantage of Ripple's services as advertised, then Ripple will quickly disappear as another failed business. If the fact that a centrally organized team is driving the development of a product equates to "scam," (this is the main argument) then pretty much every product and service you've ever used is also a scam.

You've probably heard that large websites like Reddit and OKCupid are now accepting Bitcoin. The fact of the matter is, they're not accepting Bitcoin at all. They're actually accepting US dollars. Reddit and OKCupid are using the services of a company called Coinbase that instantly converts Bitcoin payments into US dollars for a small fee. Reddit and OKCupid don't want Bitcoins because they can't pay their employees or their bills with Bitcoins, but they can do that with US dollars. In other words, large corporations aren't interested in Bitcoins themselves, but in the savings that can be had by using Bitcoin as a value-transfer mechanism, or protocol.

Similarly, Ripple is a protocol for sending money, but with Ripple you don't have to buy a digital currency like Bitcoin to get your money from A to B. You can send USD, EUR, CAD, AUD, whatever you wish, and as more Gateways come online, more currencies will become accessible. As long as you have a very small quantity of Ripples (XRP) in your account (just one or two dollars worth), you'll be able to complete thousands of transactions. This is Ripple's main advantage over Bitcoin, and why a lot of Bitcoin users are afraid of it.

Even Roger Ver, a.k.a. "Bitcoin Jesus" has to pay his supply chain to keep the Bitcoin Store running, so he can't use Bitcoins either. Roger Ver doesn't accept Bitcoin, he accepts US dollars from BitPay. If even Bitcoin Jesus isn't interested in Bitcoins themselves, then why not let customers use their local currencies from the get-go and take out the Bitcoin middleman? If the same, or even greater savings can be had with a better protocol, then why not use Ripple?

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As always, do your due diligence, and come to your own conclusions. I can assure you that Ripple is not a scam, but I can't guarantee that it isn't a threat to Bitcoin.

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Ripple is now a Tsunami!

Just like that, Ripple's market cap now exceeds that of Bitcoin. There are a lot of people asking just what the heck is going on, and of course, trying to figure out if this is just another digital currency bubble.

Taking into consideration the total number of Ripples (XRP), that is, 100 billion, and the current exchange rate of approximately 70 XRP/USD, the XRP market cap is $1.43 billion USD. Bitcoin's market cap is currently $1.30 billion USD.

Clearly the XRP exchange rate has been influenced by the limited supply of XRP. The question is, how many are actually "floating" and how many have been locked away by OpenCoin and the founders?


We do know that the founders have retained 20 billion XRP, and that OpenCoin controls 80 billion XRP. Of that 80 billion, 50 billion are being "given away," though how that is happening is a bit of an unknown. It's likely that giveaways like the one we saw on the bitcointalk.org forum are the exception and not the rule. OpenCoin is probably paying developers in large lots of XRP to help build Ripple's infrastructure and applications.

Six days ago, someone put together a spreadsheet that lists all non-zero Ripple accounts and their XRP holdings. From this list, we can make some educated guesses:

There are 99.25 billion XRP in the top 55 accounts, with the smallest one holding 40 million XRP. These are likely OpenCoin holdings or those of major investors. We can safely assume that none of these coins are in circulation.

There are another 17 accounts with exactly 10 million XRP that, again, are not likely in circulation. That brings the total number of "institutionally held" XRP to 99.42 billion.

The total number of XRP that are actually being bought and sold right now is therefore in the 500 million range. At 70 XRP to the USD, they would be worth just over $7 million USD, a realistic estimate of how much fiat and BTC has been deposited into Ripple.

Account number nine on the spreadsheet is of great interest, as it appears as one of the nine billion XRP accounts, but one that has been drawn down by 1.421 billion XRP. What is this account being used for? Perhaps for actual giveaways, or for selling Ripples to re-sellers such as BitStamp or xrptrader.com.

Sources tell me that, in the same vein as what has been happening with Bitcoin, Chinese investors have shown great interest in Ripple, and are responsible for a non-trivial fraction of the recent rise in XRP valuation.

So what is Ripple actually worth? As a protocol, it has Bitcoin beat hands down. Remember that most merchants do not accept Bitcoin directly, instead, they use services like BitPay to instantly convert Bitcoins to fiat. A good portion of Bitcoin's utility is as a protocol, not as a store of value. We will probably see much of Bitcoin's protocol-driven business move into Ripple as additional gateways, like the soon-to-be open Kraken, come online. If Ripple's "Federation Protocol" gains traction, we could very easily see a market cap in excess of $10 billion USD within a year.

Remember that Ripple's key investors have connections to PayPal and Dwolla, and will want to bring them on as Ripple Gateways. Such a move would boost Ripple's valuation well into the stratosphere, leaving Bitcoin behind as a beta-version afterthought.

Expect to see some interesting discussion, debate, and hopefully some big revelations at this year's Ripple... err... Bitcoin Conference in San Jose in two weeks. With the drama surrounding CoinBase and MtGox, and the explosion of interest in Ripple, the timing couldn't be better.

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