Beginner starter package buying option suggestion (no BTC in possession)

It’s great that people want to start with Bitcoin and even more following the principles of decentralization which bitsquare is based on. The biggest obstacle however to participate in bitsquare as beginner with no BTC is that you need BTC to buy BTC on bitsquare. This requires these beginning users to still use another provider, such as an exchange. E.g. for a European this means you still risk being taken up in central database for Bitcoin users. Mostly however, it is a pain in the ass you first need another way of obtaining Bitcoin.

Introducing: Starter Package

: Overview

  • Beginner Buyers (BB) can buy bitcoin on bitsquare without having any BTC (package of 0.015 BTC or whatever value)
  • Sellers can ask a bit more than the current market value for selling 0.015 BTC

: How does it work
0.015 BTC from a seller is locked away, with the seller paying 0.0015 BTC (creating + taking offer) and a security deposit of 0.02 BTC. This 0.015 BTC is called the starter package. The difference compared to normal is that this starter pack is locked away without a BB having showed interest. The seller can ask more than the market as an incentive to provide a starter package.

: Beginner Buyer BB shows interest
A BB has the option to show interest in any of the available (or cheapest) starter package. The 3 scenarios that can happen are:

  • The BB never transfers the money and doesn’t report a claim to the arbitrator that something went wrong. So nothing happens.
  • The BB transfers the money, the seller confirms having received it and the arbitrator releases the 0.015 BTC to the BB.
  • The BB transfers the money, but the seller claims having nothing received. If the BB can provide proof he/she indeed transferred, nothing happens yet, but the starter package is tagged as not trust worthy (meaning the seller always has an advantage in being believed). Then a 2nd BB tries to buy this starter package. If the same happens again with the seller claiming to have nothing received and the package already marked as not trust worthy, the seller is believed to be not trusthworthy and therefore both BB1 and BB2 are deemed right. The arbitrator takes the 0.02 BTC, gives 0.015 BTC to BB1 and the locked 0.015BTC goes to BB2.

: Conclusion
Beginner Buyers (BB) can obtain Bitcoin without having any Bitcoin yet, while still following the principles of bitsquare. Both seller and BB have advantage in entering this trade.


Thanks for your suggestion.

There are some problems to add zero cost offers. The offer fee is needed to protect the network against spam and market manipulation. zero cost offers would open an attack vector.
The security deposit is needed to avoid that a user is not following the process. Without that the other peer lose time and the arbitrator does not get paid.
To add completely new models (like your suggestion) would add a lot of work as the trade process is the core of the app and pretty complex.

There is some other idea to add a micro credit market. So people can meet there make or take offers for lending BTC with interest rate and the borrower need to proof his reputation by that what the offerer of the loan requests (e.g. social media account, id verification,…). So it is up to both parties to agree on amount, interest rate and tools for proof of reputation.

So that model would be completely separate from the exchange.
I am just not sure if there is real demand for that. most newcomers have friends who can borrow them small amount of BTC.
If it is nto securely designed you end up giving away money for free (Faucets) or just get too much troubles.

I think the best is that we offer here in the forum a section for people who are willing to lend tiny amount of BTC to newcomers. They can arrange out of band to get in contact and check if the other is trustworthy. If that model works and has demand we know at least that the micro credit idea would be used as well.

I’m not hinting at zero cost offers. Instead the person offering this starter package covers for the expenses (offer fee, taking fee and 2x security deposit) of the beginner buyer. The arbitrator does get paid, because of the double security deposit. In my exam it is 0.005 for the arbitrator, but you could put the security deposit on 0.025 to make it the standard 0.01 BTC for the arbitrator.

Also I don’t think it is an incentive for spammers, because 2 Beginner Buyers (BB) need to accuse the same seller of fraud, which only results in €5 / $5 for the BB after having going to the manual process of submitting evidence.

Sorry I was very busy and did not read well enough your post.

The arbitrator should never be active part of the trade, only if something goes wrong. Otherwise the arbitrator will become the escrow.

To apply your idea to the current system it would be that the 2of3 MS deposit tx will be funded by the seller only who will pay the funds normally required by the buyer (0.0112 BTC).
The take offer fee has also a not so obvious protection mechanism beside that the trading fees are revenue sources (now for the arbitrator, later for the Synergetic cooperation).
If the taker does not need to pay any fee he could harvest the offerers personal information which will be exposed in the last step in the trade process after the taker fee is paid and before the deposit get finished. Those data are the bank account data in case banks are used as payment method and carry usually the name of the offerer. So if we would allow the taker to take offers without fee payment they could build a manipulated version of the software and stop the take request after they received the bank details in that step of the handshake.
That might be a more theoretical risk atm, but better to care about such. Once Bitsquare becomes more relevant there might be a more realistical risk for that. Of course the taker fee is also not a perfect protection but it drives up the costs. Additionally we have other protection (network level blocking)…

And beside that it will never be secure and it might be that we need to stop it because people start to abuse it. The taker would have zero risk and nothing to lose (people are lazy and careless). Again probably not a problem yet, but once the platform is more relevant you need to count with more troubles…

But beside that conceptual point it would require a bigger change in the trade protocol and I don’t want to change/add here anything if it is not heavily needed, simple to limit risks and effort. It is the core of the app.

I find it much easier to solve the problem by outsourcing it to a micro credit market, which - if there is demand - would be another feature of the platform.

As you have probably seen already that I started a thread for offering such a credit for newcomers.
I assume in reality there will not be much demand for that. But we will see.

Another idea is to add some kind of Reputation tokens (@mepistol has some ideas in that direction) which can be earned by providing proof of reputation and can be used as collateral for lending.
No concrete idea how that could look like but there might be some way…

How about an account holding a small fund of btc held somewhere in the nw, say a wallet specifically for this purpose, funded by the one-sided fees for these initial transactions, that is only used to allow new users to acquire enough btc to then be able to make a trade. The fiat accrued could be held in some bank account(s) owned by the nw and sold to established nw users or on an exchange.

This method
.doesn’t require involvement of other users (during the actual transaction, that is, and otherwise only those who are wanting to buy fiat after the fact)
.could be fully automated,
.would be limited to the fiat and btc amounts necessary to entry into the nw, I.e. the total of a deposit plus a normal tx fee, plus the fee for this first tx,
.would not require deposits like a normal tx, just an appropriate fee structure.


I think that however you shuffle it the simple fact is that if a person has nothing to lose, they don’t have a reason not to try to cheat the system. If you want to make a trade without placing something to lose, other party has a reason not to trust you unless you send your funds first, in which case you have to trust that other party to follow the deal. You can place people (arbitrators) in between, but than you just change who you have to trust. This is the beauty of Bitsquare, funds are locked in a 2of3 multisig, so no one is fully trusted, you have to reach an agreement or the Bitcoin network won’t accept the payment.

This is why Bitsquare exist in the first place, it isn’t a trustless system, but more of a framework to set who you trust to be impartial in the trades he doesn’t fully control. And if the person you set to trust misbehaves and asks for a bribe, you can go in a biding war in order to insure he gets nothing of a bribe and loses both customers, and as conversation has to be public key encrypted, a party he offered to bribed by can blackmail him, so he can lose all his customers.

The true trust here is all about the multisig as a crucial part to limit the damage and a quick and reliable framework(software) that will adapt to such actions.

Also, I’m not really comfortable giving my bank details to anyone except an established, trusted company/institution/system.

But does fiat get locked the same way as Crypto?
That’s not how I understand it, though I could be wrong.

No. Fiat is only sent directly to the other trader. There is no way to lock it without breaking decentralization.

See, that’s why I laugh when anyone talks about risk for the crypto seller to a fiat buyer.
This is something that would really be groundbreaking if only someone could come up with a way around this, i.e. that fiat gets treated like crypto at least for fiat-crypto exchange.