- What is Bitcoin?
- What is Bitalo?
- Who runs Bitalo?
- What is the general problem with Bitcoin security?
- Why is Bitalo an integrated Service?
What is Bitcoin?
Bitcoin is a new form of decentralized currency. Visit bitcoin.org for more information.
Who runs Bitalo?
Bitalo.com is operated by Lamium OY, a finnish company. If you want, you can read more about us.
What is the general problem with Bitcoin security?
To access bitcoins, a private key is required. This is a secret number that allows bitcoins to be spent. Every Bitcoin address has a matching private key, which is usually saved in a so called wallet of the person who owns the balance. The private key is mathematically related to the Bitcoin address, and is designed so that the Bitcoin address can be calculated from the private key, but importantly, the same cannot be done in reverse.
Why is Bitalo an integrated Service?
Bitalo offers multiple services in one website, we will extend it to more services in the future, but as of now we have available:
Bitalo is proud to offer a highly secure exchange service based on timed transactions that provide you a secure escrow for trading. While both parties can under normal circumstances trade completely freely without the possibility for Bitalo to intervene in the trade and get access to the bitcoins, Bitalo can intervene for dispute resolution only after the expiry of a pre-signed timed transaction to decide for the resolution of a conflict for either side based on provided payment evidences. Since we require full user verification for trading, dispute resolution will be handled effciently and securely.
Now you can not only store and exchange bitcoins on Bitalo. If you own specialized equipment, you can also participate in issuing Bitcoins to the network and mine Bitcoin directly to your secure wallet!
- How does Bitalo work?
- How do I sell bitcoins on Bitalo?
- How do I buy bitcoins on Bitalo?
- Is it possible to cancel a transaction?
- How do I deposit money to Bitalo?
- Does Bitalo itself sell/buy coins?
- Does Bitalo take any commission?
- Why you do not offer Paypal as payment option?
- Who covers the transfer fees?
How does Bitalo work?
Bitalo functions in a similar manner to a stock market. Members can place offers and purchase for a certain price. However, Bitalo is a decentralized service and therefore we do not take any money deposits. We just provide a highly secure platform using so called multi signature wallets so you can safely find your peers to trade with while Bitalo provides an escrow service for bitcoins so that the buyer can be sure that he/she receives their coins even if the seller changes his mind. Of course, if both parties agree, it is possible to cancel transaction.
How do I sell bitcoins on Bitalo?
Selling bitcoins is only possible with a fully verified user account. For this purpose you need a confirmed EU bank account (or in case this is not possible an actual utility bill / passport copy).
Only buyers that have at least one matching payment method with yours will be able to bid on your offers. For example, if you live in Germany and you only accept local wire-transfer you will only be able to sell to people who are able to pay you by a domestic (in this case - within Germany) wire-transfer. Foreign wire-transfer means that you accept payments by bank transfer from any country.
In order to be able to sell BTC on Bitalo you need to deposit them on one of your secure online wallets. Each secure online wallet has a unique deposit address which you can find in the wallet section. You do so by simply sending any amount of BTC onto this address. Currently Bitalo requires 2 confirmations in order for the transfer to get acknowledged. Also, our site engine scans the wallet every 2 minutes, so it is possible, that you will have to wait for another minute or two after the second confirmation for the funds to show up in your account balance. However, even before that you will be able to see the transfer as unconfirmed under Account History in the Funds section.
Once you have the coins on your account you can create a sale offer. To do so, go to the Offers menu and create a new Sale (Ask). Below there is an explanation of the fields:
1. Offer type: whether you want to buy BTC or sell BTC. Should be set to Sell.
2. Amount: the total amount of BTC you want to sell.
3. Currency: the currency you want to be paid in.
4. Price per 1 BTC: how many of the selected currency units you want to get for 1 bitcoin.
The total field shows how many of the selected currency units you will receive for the total amount of BTC you want to sell.
Once you click the "Create offer" button, your offer appears in the Market section for everyone to see. Once this happens, the relevant amount of your BTC (i.e. the amount of BTC you put on sale) gets frozen with Bitalo (you can see them under your account balance as frozen). This is to ensure that you do not try to sell more bitcoins than you actually have and also that you will not be able to withdraw your bitcoins while they are put on sale. At this stage you still have the right to unfreeze your coins by cancelling your offer (go to Offers and click Cancel button for the relevant offer).
Once a buyer is found for all or some of your coins, you have no right to unfreeze them anymore and they get locked (frozen) for good. On completion, each offer becomes a TRANSACTION and from now on you can see it under the Transactions menu. A "Send Coins" button will be active for this transaction. This button is used to send your frozen bitcoins to the buyer. It is VERY IMPORTANT that you do not use this button BEFORE you receive the money. By clicking this button you CONFIRM that you received the money and you SEND the coins to the buyer permanently. This process is IRREVERSIBLE and Bitalo will not be held responsible for any BTC loss if you do this before receiving the payment.
Once your sale offer gets matched with a buy offer, both you and the buyer receive an e-mail with instructions on how to proceed further (meaning contacting the other party to discuss the payment method). You can also set a default message for your buyers from the Account section. This message will be attached to the standard e-mail content.
How do I buy bitcoins on Bitalo?
In case your account is new you can only buy a very limited amount of bitcoins from verified sellers. (So called pool coins). This is a security mechanism to prevent "fake buy offers" from unconfirmed users.
You can confirm your account by adding a passport copy / utility bill in your account section to remove the limit.
If you go to the buying module, only sellers that have at least one matching payment method with yours will be able to bid on your offers. For example, if you live in Germany and you only accept local wire-transfer you will only be able to buy from people who are able to accept a domestic (in this case - within Germany) wire-transfer. Foreign wire-transfer means that you are willing to pay international wire-transfer to any country.
Since Bitalo does not accept money deposits, you do not have to have any funds within the market to start buying. However, as described above you cannot do any trading above a spefici limit before we verify your account. This process is necessary to avoid nasty/fake offers and protect the sellers.
Once you have been verified as a verified buyer, you can create a purchase offer. To do so, go to the Offers menu and create a new Purchase (Bid). Below there is the explanation of the fields:
1. Offer type: whether you want to purchase BTC or sell BTC. Should be set to Buy.
2. Amount: the total amount of BTC you want to purchase.
3. Currency: the currency you want to buy the coins with.
4. Price per 1 BTC: how many units of the selected currency you are willing to pay for 1 bitcoin.
The total field shows how many units of the selected currency you will pay for the total amount of BTC you want to purchase.
Once you click the "Create offer" button, your offer appears in the Market section for everyone to see. At this stage you still have the right to cancel the offer (go to Offers and click Cancel button for the relevant offer).
Once a seller is found for the whole or some amount of coins you want to buy, your offer (or part of it) becomes a transaction that you can now see under Transactions menu. Once this happens both you and the seller receive a message with instructions on how to proceed further (meaning contacting the other party to discuss the payment method). During this time the seller's coins remain with Bitalo and he/she will be unable to do anything with them other then sending them to you. Once the seller gets the payment, he/she will then release the coins and they will appear in your Bitalo account balance.
Is it possible to cancel a transaction?
Yes, it is, however you should not do this unless you have a VERY good reason (e.g. your bank is unable to send the payment to the seller's bank). Also, you cannot cancel the transaction by yourself, but you can request the other party to agree to cancel it. To send a cancellation request to the other party go to your Transactions and use the "Cancel transaction" button for the relevant transaction.
You will be asked to type in the reason for cancellation, that will be then mailed to the other party of the transaction. If they deem your reason fair, they will cancel the transaction. Otherwise the only way to cancel it is to email Bitalo. Please remember: buying coins is not a game, these are real people you deal with and by putting an offer out there you give your word that you will fulfill it. If you abuse the Cancel option your account will more than likely be suspended and you may be banned from the exchange.
Why you do not offer Paypal as payment option?
Due to bitcoins being virtual it is nearly impossible to negotiate with Paypal if the buyer requests a charge back from you after receiving the coins. While we do our best to stop scammers from joining this market, you are using Paypal at your own risk. Bitalo strongly advises all users against using Paypal and will NOT be responsible for any loss caused by Paypal charge backs. That said, we will do our best to assist you if you are a victim of a Paypal scammer.
- Are my bitcoins safe with Bitalo?
- Is my password secured on the Bitalo database server?
- Is using Bitalo safe?
- What do you provide to keep my account secure?
Are my bitcoins safe with Bitalo?
Yes, absolutely. We are the first exchange that actually implemented multi-signature wallets. It means that any hackers even the site administrators CANNOT access your bitcoins, as you need to confirm every single time when your bitcoins are moved. This is achieved by using two private keys for each of your wallets. Your private keys are fully encrypted with your password before sent to our servers and even we, the administrators, can't decipher them. Unless the website code is changed, there is practically no chance that your coins get lost or stolen. Also your encrypted wallet and our database is first backed up, encrypted and then copied to an external location on a regular basis.
Is my password secured on the Bitalo database server?
Yes. If fact, your password never leaves your browser in plain text. We simply don't know it. This is possible by utilizing Secure Remote Password protocol, developed by security experts at Stanford University.
Is using Bitalo safe?
Yes. All communication between you and our servers is encrypted using secure socket layer technology (SSL/TLS). Even using public WiFi's traffic between you and Bitalo is not readable by anyone else - be it casual script-kiddie or goverment officials.
What do you provide to keep my account secure?
Bitalo offers the following security features:
Two Factor Authentication
Bitalo has a mandatory two-factor authentication via SMS or MePIN application. This is required for the case that your computer is compromised. Since MePIN can be setup completely on a external device like your Ipad or your mobile phone you can safely set up your Bitalo account on a fully compromised computer.
Bitalo has furthermore foreseen a rescue plan for extreme circumstances like the whole website goes offline, Bitalo refuses to relase bitcoins or the complete database is erased. For this purpose you can enter a secure (e.g. offline) bitcoin address that only you can access. Bitalo will pre-sign a transaction that you will receive by email and can redeem it at any time independently from the existence of Bitalo. This is a highly secure method, since even when the backup transaction is stolen by a hacker, all the hacker can do is, to redeem the bitcoins to your address
At Bitalo you do not depend on the reliability of a third party. Since we use real addresses, you can verify the correctness of your balance at anytime by simply viewing the public blockchain. There is absolutely no need for third party audits to prove that your bitcoins exist.
- I didn't receive my activation email, what's wrong?
- Why do I have to verify my Bitalo account?
- Why do I have to set up a two-factor authentication before I can deposit coins?
- How do I verify my account?
- How long does the verification process take?
- What is special about Bitalo's Multi-Signature Architecture?
Why do I have to verify my Bitalo account?
The main reason for which the verification process is there is to protect our users against scammers. Because of the fact that, unlike other exchanges, we do not take money deposits in, it is very easy to bid on coins and then not pay for them. Even though you will not be able to get any coins this way, you are causing hassle for the sellers and slow down the trading process. Thus, we need to make sure that you are a trustworthy person before we allow you to trade.
Why do I have to set up a two-factor authentication before I can deposit coins?
Security is a big concern for us, so we want to make sure that NO ONE can steal your coins. As your PC might get compromised with malicious software at any point in time, we require you to set up a two-factor authentication so that, even when any hacker gets your password, he cannot steal your bitcoins, because we will ask for a one-time token each time someone wants to move your funds.
What is special about Bitalo's Multi-Signature Architecture?
In contrast to the single-key model, multi-signature Bitcoin wallets use multiple keys to access the bitcoins. Keys can be created by or distributed among multiple parties, and multiple keys can be required to send bitcoins. This enhances security while maintaining ease of use.
Bitalo's security concept: Bitalo uses multi-signature wallets that consist of TWO keys to access bitcoins.
A) Your Key which is generated in your browser outside of the remit of Bitalo
B) A Bitalo Key which is generated on the Bitalo server.
To send bitcoins, the following steps are taken:
- the Bitalo server creates an unsigned transaction
- your browser reads the unsigned transaction and your encrypted user key
- your browser decrypts the the user key using your passphrase
- your browser signs the transaction with the unencrypted user key
- the half-signed transaction is sent to the server
- the server signs the transaction with the Bitalo key
- you confirm the transaction with your two-factor authentication
- the server publishes the transaction to the Bitcoin network
This allows users to easily send transactions while also allowing a maximum level of security.
Since Bitalo only holds one key out of the two required ones, it cannot send your bitcoins without explicit confirmation. Even in scenarios where a hacker or malicious site administrator would like to steal bitcoins, the attacker would be unable to access your bitcoins, since he can only see the encrypted key. This is state-of-the art bitcoin security and provides far better security than traditional single-key wallets that are used by most bitcoin websites.
Similarly, the security model also extends to the user's computer. If an attacker manages to fully compromise the your computer, thanks to proper two-factor authentification it is not possible to confirm the transaction, unless the two-factor device (like the mobile phone) is also compromised at the same time.