Bitcoin gets a somewhat bad reputation in the press with it being described as dirty money for criminals and Russian tax-dodging billionaires (who used it to get their money out of the Cypriot banks). Therefore if you are looking to give it a go and don’t want to be tarnished with this kind of dodgy reputation it is important to find a more legitimate way to trade in it. With that in mind companies such as German based may offer a way forward. It also claims to have more than 220,000 users, although I have yet to see anywhere near this number of active participants.

Why use appears on the face of it to be a cleaner market place than some of the others which are around. Indeed it’s main advantages are that it is registered in Germany and works with Fidor Bank which is also based there. This means that it is at least partially regulated by the German authorities. Other advantages include that they do not hold your money as all trades are conducted “over the counter” (or peer-to-peer). As a result payments are made directly between market participants (bank to bank) meaning that does not hold your cash. However, they hold your Bitcoins in an escrow account; meaning that the seller must actually hold them in order to sell them. uses a third party auditing firm to check of the coins it holds on behalf of customers are in its possession. Once you are fully identified as a user you can download this report and check it yourself. It was last undertaken in 2014.

Features only offers simple buying and selling, there are no derivatives or other complex instruments. You either place a buy or sell order or respond directly to an advert. If you purchase via an advert you pick the one you want, indicate how many coins you wish to buy then within a set period of time you must mark the transaction as paid. Once the seller receives the money they acknowledge this and the coins are released. You must mark a purchase as paid within a set number of hours or you risk getting black marks. Selling is also straight forward you can either sell directly to a person who already has an advert or list your coins for sale. In both cases the other party (buyer) must respond within a set number of hours, issue payment then you release the coins on receipt of the cash. The  minimum purchase or sale is just 0.1 Bitcoins which makes it very easy to dip your feet in the water.

The only downside of the system is that it can take several days for a buyer to receive funds, this increases over weekends and bank holidays. Therefore if you are an active trader this delay can mean you lose some opportunities. There is one option round this and that is Fidor Bank in Germany who offer a so-called “express trade” system where if both parties use them then payment is cleared and the coins are released instantly. For now this option is only available to German residents but it would certainly improve the experience.

Trusting Others

All participants in the market are rated bronze, silver or gold. Their status depends on the number of trades and positive responses from others. In addition after a certain volume of trades traders must go through an identification procedure in order to be able to continue to use For this you need to provide identity papers and get them witnessed by a lawyer or financial institution. You must  pay a small fee for doing so. It remains to be seen how effective this process is but it should mean that the participants can be easily traced in the event of anything going wrong.

You can also specify your minimum trust levels when trading with others this can include being gold, silver or bronze, which country their bank is registered in or even if you will only accept transfers from within the same banking group. To date I have undertaken quite a lot of transactions and had no problems with trust.


From a security point of view you can add on two factor authentication for example by using Google Authenticate on your phone. There is also a fifteen minute auto logout in case you do nothing and a list of previous login attempts (successful or otherwise).

Like any exchanges which store some coins online there is a risk that a hacker could make off with them. However, promise that your coins are stored away from the Internet’s prying eyes. Also it is very quick and easy to transfer your bitcoins either to your own local wallet or to another online place.


The overall cost is 1% which is absorbed equally by the buyer and seller (0.5% each so it is reasonably cheap). Other costs to be aware of are those of your bank who may charge for transferring money. There are no fees for joining and the only fixed fee comes when you have to complete the identification process. This helps make the barrier to entry small.


Trading or investing in bitcoins is not something you should probably do to make a profit. The price is so volatile that you would have to be mad to gamble your fortune on it. However, if you are aiming to take the plunge makes buying and selling bitcoins quick and simple. The trust system also improves confidence plus it has links to a registered German bank.

Should you try it? I’d say yes, so far it has been the easiest and quickest way I have found to get into the world of Bitcoin.

A note about Bitcoin

As for Bitcoin itself, I am not sure if this is anything more than hype and indeed it has more than it’s fair share of eccentric followers. That aside though it represents a very good way to get funds to people in countries where banks and governments are corrupt (Zimbabwe for example). Also the underlying technology (blockchain) is an excellent way of allowing fast, low cost transfers of small amounts of money between friends and family members across countries with different currencies. In essence it could become the “friends and family” currency. More on this in a future article.

In the longer term I am hoping that there is more oversight of Bitcoin exchanges in particular to prevent the kind of dirty money image that it currently has. However, such regulation should not be put in place to simply prop up the current financial services sector. After all UK banks have paid billions in fines for drug money laundering, mis-selling insurance products, fixing interest rates and manipulating currency markets it would therefore seem strange to hand over Bitcoin to them! Just keep in mind that the UN itself said that during the 2008 banking crash $350bn in dirty money made it’s way into the banking system in London, New York and other major financial centres. I am sure that to date Bitcoin has come  nowhere near to this amount in such a comparatively short space of time…

About Rod McCall

Rod McCall is a researcher in the field of human-computer interaction in areas such as augmented reality, mobile gaming in-car systems and virtual environments. He has a passing interest in economics after not being entirely convinced by the rubbish presented as fact during lectures on that particular subject while at uni.
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