Startup CoinSafe has launched a free app and service intended for brick-and-mortar business owners who want to trade Bitcoin as part of their revenue streams without actually buying a Bitcoin ATM.
That is at least how the service is being framed on the company’s website.
The personal buying and selling of bitcoins is already widely available via Mycelium or Local Bitcoins, just to name two examples, so what makes CoinSafe different?
That question came up on Reddit on Monday, and CoinSafe CEO Michael Flaxman joined the conversation to answer that question.
“The main difference is that we're for businesses with a physical location,” Flaxman said. “There's no messaging, scheduling, or coordinating a place to meetup, which can be a real pain. Customers just show up at the store whenever they like. Being offline (and not anonymous) takes a lot of the sketchiness out of Bitcoin. It's also great for Bitcoin beginners since they don't need to install an app before they can buy their first bitcoin.”
BitPay’s new Facebook app, GetBits, plays up that “sketchiness” narrative, as well.
How CoinSafe Works
Flaxman further addressed the issue on Reddit as to how CoinSafe at least acts like an ATM:
“Stores set their own prices and then like BitPay, our software gives the customer 15 minutes to buy Bitcoin at that price - they have to pay cash to the cashier and optionally enter their info for a receipt. When a customer sells their Bitcoin to a store for cash, the price is locked in as soon as the valid transaction is broadcast, while the cashier is instructed to hold onto the cash until the BTC transaction is confirmed.”
CoinSafe also promotes its user interface:
“Ridiculously easy to use,” reads the app’s FAQ. “The cashier at your store using the app doesn't have to know anything about Bitcoin. It's designed so that both the cashier and the customer can be complete Bitcoin newbies, and it will walk them through everything. You don't have to worry about your cashiers running away with all of your bitcoins, double-spend attacks, if a Bitcoin address is valid, managing private keys, etc.”
CoinSafe’s FAQ also is careful to note that the company has no access to a user’s private keys, even when you give CoinBase API access to a wallet on Coinbase, Bitstamp or Blockchain.info.
“We encrypt all information while in transit to our servers and store credentials encrypted in our database as well,” the FAQ reads. “For security, we always recommend keeping low balances on third party Bitcoin sites. For larger amounts of Bitcoin, we recommend cold storage using Electrum or Armory. Remember that you always have absolute power to unlink a third party wallet from CoinSafe by revoking the credential.”