Below you'll find answers to the questions we get asked the most about Coinffeine
Coinffeine is an application that allows you to buy and sell bitcoin peer-to-peer, in exchange for fiat currency. Coinffeine is unique in that it has automated order matching and execution, analog to the experience provided by centralized exchanges, whilst you remain in control of both your bitcoin and your fiat currency, much like in decentralized exchanges, this way bringing together the best of both worlds.
In essence, Coinffeine builds upon one of bitcoin’s value proposition, that you can be your own bank, so that you can now, as well, be your own exchange.
The Coinffeine desktop application embeds a bitcoin wallet and, at the same time, allows you to control your own account at a bank or payment processor via API. With the application, you can place bitcoin buy or sell orders.
Your orders are received by servers running Coinffeine’s trading protocol, which publicize them to all Coinffeine users.
Coinffeine’s trading protocol permanently looks for matches and, when it finds one, it locks the bitcoin amount to be exchanged plus a safety deposit, on the seller side, and a safety deposit only, on the buyer side. It then breaks down transactions into multiple steps where, step-by-step, the seller puts at the disposal of the buyer the amount of bitcoin equivalent to the fiat currency he/she is going to receive on that step, and the buyer transfers fiat currency to the seller, with no intermediary custodian at any point. Once the fiat currency part of the transaction is complete, for the bitcoin part of it both the safety deposit and the amount to be exchanged is unlocked on the buyer side, and only the safety deposit is unlocked on the seller side.
Throughout the whole process, the protocol employs game theory to disincentivize that users disengage in the trade and, if this occurs, it interrupts the transaction and it unlocks the amount of bitcoin paid for, on the buyer side, and the safety deposit of only the user that remains engaged. The safety deposits of the user who disengages is paid to the bitcoin network in the form of miner fees.
For all of this to work, Coinffeine only integrates banks or payment processors where transfers among users are irreversible.
First and foremost, you will need to download and install Coinffeine.
Additionally, you will need to have an account at one of the banks or payment processors that Coinffeine has developed an integration with, and you will be required to configure the API to control your account from the application.
Our User Manual details how to link your account at a bank or payment processor with Coinffeine.
We have developed the integration with one payment processor, Advanced Cash. Advanced Cash is an excellent complement to Coinffeine. It offers many funds top-up and withdrawal methods at favourable rates, multi-currency wallets and free, irreversible transfers among its users, among other features.
You will need an account at Advanced Cash in order to buy and sell bitcoin with Coinffeine. We are grateful for all accounts opened using our referral link.
In principle, we are able to activate all fiat currencies supported by the banks or payment processors we have developed an integration with. Having said this, we prefer to open a trading pair only once we are able to anticipate sufficient liquidity. For the time being we have only activated the BTC/EUR pair.
You may expect the activation of other fiat currencies available at Advanced Cash in the near future. Currently, those are USD, GBP, RUB, KZT, UAH and BRL.
Transfers among Advanced Cash users are free, so that peer-to-peer fiat currency transactions triggered by Coinffeine as counterpart for bitcoin buy or sell orders, have no cost.
Advanced Cash has, nonetheless, fees for topping up or withdrawing funds. Find them here: Advanced Cash Fees.
Advanced Cash has relatively low limits in the amounts that can be topped up or withdrawn in un-verified accounts. These limits are significantly raised once an account is verified.
For more details, please refer to the “Getting started and verification” section of Advanced Cash FAQ.
For the time being, we have set up an arbitrary transaction limit of 1,500 EUR per order. We plan on raising this gradually and, eventually, lifting it completely. There are, however, no limits to the number of orders that can be placed.
Obviously, whatever limits you may have with your bank or payment processor account apply to your trading with Coinffeine as well.
In any event, users willing to buy or sell a large volume of bitcoin may find that the depth of the market is not high enough to fulfil their full orders at current market prices. Coinffeine S.L. has an OTC desk that assists in these cases. Enquiries can be sent to firstname.lastname@example.org.
There are two costs associated to transacting with Coinffeine:
It is important to note that, to find you a counterparty, Coinffeine’s trading protocol uses not the price stated in your order, but this price plus the due costs, for sell orders, or minus the due costs, for buy orders. As a result of this:
In any case, Coinffeine’s trading protocol always ensures that you pay no more than what you state in your orders, when you buy bitcoin, and that you receive no less than what you state in your orders, when you sell.
Coinffeine’s trading protocol will match orders against as many suitable counterparts there are and are required. In case there were not enough counterparts to fulfill the total amount of an order, this will stay open for the remaining part until there are new suitable counterparts, or until it is canceled by the user.
You have the option to cancel an order as long as it is not being matched.
If only a partial match is found, after the exchange is done the order will return to the order book for the remaining volume, which allows for the cancellation of what is left of it. In that event, the order will show as overall cancelled, and looking it up will show the history of successful exchanges for it.
Whilst the fiat currency side of the transaction is instantaneous, the bitcoin side of it will need to be confirmed in the bitcoin blockchain by the miners. Coinffeine sets miner fees at a level that helps ensure high priority for its processing by the bitcoin network, so that all transactions can be confirmed, if no problems occur, within the mining of two blocks (one for locking, and one for unlocking the funds). A block is mined in the bitcoin blockchain every 10 minutes on average.
In centralized exchanges orders “live” in central servers, they enter the order book as soon as they are posted, and they remain in it until they are either executed or cancelled.
With Coinffeine orders reside in the application, so it is imperative that your computer is on and the application is running for orders to be matched and executed. We also recommend that you de-active the automatic standby mode of your computer when running Coinffeine.
In the event that your application goes offline for whatever reason:
The bitcoin wallet embedded with Coinffeine is generated upon the first installation of the application, and it is stored at a user’s folder, different to that of the application.
Private keys are therefore stored at your device, so that you are solely responsible for their security and backup.
Whilst you do not need to provide any personal data to download, install or use Coinffeine, every instance of Coinffeine has a unique identifier. Coinffeine S.L. keeps registers of orders and trades, that include this identifier, mainly to be able to provide customer support.
On the other hand, all banks and payment processors, like Advanced Cash, must comply with AML regulations that require of KYC procedures.
It is important to note that, with Advanced Cash, users are able to see the account number and email address of their trade counterparts. This information is also available to Coinffeine S.L., which keeps it along with the register of trades.
In any case, Coinffeine S.L. cannot in any way identify any person with the information that it stores.
Even though transactions are conducted peer-to-peer, our servers host Coinffeine’s trading protocol, which is responsible for matching orders and supervising their correct execution. It is therefore possible that trading may suffer downtimes, if our servers are down or unreachable for whatever reason. In the event that our servers were offline:
In any event, because you are in control of your bitcoin private keys and your account at the bank or payment processor integrated with Coinffeine, the unavailability of Coinffeine’s servers would never have an impact on your access to your fiat money and your bitcoin.