Bitcoin buy and sell website

Bitcoin Questions and AnswersCategory: General questionsBitcoin buy and sell website

Malcolm Gonsalves asked 1 month ago

Last updated on April 22nd, 2018 at 06:18 pm

HI friend,
I need to start a buy sell bitcoin website like localbitcoins.com, the only doubt i am having is where do i store the BTC as an escrow service provider.
I mean is when someone wants to sell a BTC he/she needs to login the website, then he/she needs to transfer their BTC to the selling website, after that they are allowed to post a advertisement with their pricing on the website. Meanwhile the BTC is with the website i.e. for example my company, my doubt is where do i store it and how do i keep it secure. Okay after the advertisement is live on the website, a XYZ person comes checks and if he/she likes they confirm the rate, then a chat starts within the seller and buyer. And once the fund are transferred the BTC is released by the escrow service.
The point is how to store BTC, where to Store, How to store multiple customers coin
which wallet hot, cold wallet or is there any other options

1 Answers
Steven Hay answered 1 month ago

Hi Malcolm,
 
This is probably something you’d want to hire an expert for – if you’re holding other people’s money you need to make every effort towards security.
 
Usually I recommend hardware wallets for holding private keys but that won’t be the complete answer in your case. You’ll also need certain software developed to link your exchange and the hardware (or other) wallet. Of course, you need to keep customer funds in separate addresses and have a very good database on your side of who owns what. That database is probably a much bigger and easier target for hackers than your actual Bitcoin wallet…
 
What most exchanges do is to hold the majority of funds on a cold wallet and only have a small fraction of funds in a hot wallet connected to the internet. As you’ll be acting as an escrow agent, I think you might not need to follow this approach as you should be settling trades soon after they’re opened, and as quickly as possible.

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