[revcbh]

We have been audited by independent security professionals and will continue to undergo frequent security testing (both code reviews and adversarial testing). I'll try to make the results of that more public, since you obviously shouldn't just take my word for it.

To protect against losses we're working to get insurance for deposits setup, but it's not in place yet. We're also looking at the possibility of letting people maintain custody of their coins if they don't need realtime trading. Proof-of-reserve is also planned soon to guarantee that all accounts are fully funded.

Right now, the vast majority of coins we control are in cold-storage wallets that require 4+ people to access, with most of the rest in cold-storage wallets that require 2 people to access. Only a very small amount is in a hot wallet. We're working with a partner to add custodial multi-sig to our hot wallet (and maybe cold wallets) so that even if someone compromises our machine, there's an external signatory which will be able to prevent transactions from processing.

You're right to be cautious. Even though I keep most of my bitcoins on Buttercoin, in general I wouldn't recommend that anyone use a centralized service for long-term storage. We know that people will do that though, so our security has to be up to par. Hopefully the features we roll out over the next 3-6 months will create enough transparency that you can trust us.

[simonebrunozzi]

I like your openness. What's your role at Buttercoin? Also, how do you differentiate from Coinbase?

[revcbh]

I'm one of the founders/CTO.

Our main difference from Coinbase is that we have an order book and real-time trading. Coinbase is great for people that want to buy some bitcoin at a fixed price and don't mind waiting a few days to get them. We focus more on businesses and traders that need to buy and sell bitcoin in real time. Adding USD is also very fast with us, usually 1 or 2 days. I think that's slightly faster then Coinbase, or was last I checked (unless you add a credit card for instant buy with lower limits). It doesn't matter as much in Coinbase's model, since they're fronting cash to lock in a price.