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Proposal - BuyDash website: Easiest and fastest way to buy some Dash for Newcomers

LostInSpace

LostInSpace

Active member
Proposal URL: https://www.dashcentral.org/p/BuyDash
Update 2017-06-01: Even though we got 415 yes votes, the 334 no votes were way too high and it seems the masternode community is not interested enough in this idea. Would have been risky, yes, but I still think we would have found a way to make this useful for everyone. In any case we will probably revisit the idea some time in the future, most likely not as a non-profit, but as a pay-service to make this profitable for us and not just helpful for new users. For now we have to accept other work to pay the bills, it was quite expensive to push this idea for us and we lost all the time, dash and money invested.

Elevator Pitch
Making just the first purchase of Dash as easy and fast as possible. #DashPainPoint
BuyDashWebsite.png


Preamble
This proposal addresses the issue Amanda recently talked about in one of her new videos: US Residents Need Good Way to Buy DASH with Credit Card.
Instead of going through many steps and verifications Dash is directly and instantly sold from a storage to new users. Once storage runs low new Dash is added from the non-profit earnings and made available for new potential users. The service is completely automated, selfsustained and Non-Profit.

Pretty much everyone here got introduced to Dash the hard way. How to buy the first Dash? Most of us had to convert some BTC to Dash and understood Blockchain and Bitcoins already. There are now more ways to get Dash pretty easily if you have coinbase, bitpanda, changelly, wesellcrypto, etc., but even those are still very painful for new users: It still takes days or weeks to get approved in any big exchange or get trusted by any payment provider for any serious buy amount. We assume most users get lost in these early steps. Most future users will be even less technically versed and will still have a hard time getting into any cryptocurrency.

Dash is by far the easiest to get into for new users, it already feels pretty close to PayPal and thanks to InstantSend new users don't have to fully understand Blockchains or why you have to wait for confirmations. The only thing holding back new users is understanding why they would need Dash in the first place, where to spend it and the difficulties buying the first Dash.

Proposal
TL;DR: We have quickly hacked together a functional demo (tested on PC, Android and iOS): BuyDash is a simple website to solve this exact problem: Get new users easily into Dash by providing a pain-free way to buy their first Dash via Credit Card in less than a minute from nothing to a fully functional Dash wallet with some Dash in it. You can try it out and buy real dash (limited to $0.50-$5.00 for demo purposes) right now to see it working and getting Dash instantly with your credit card. We propose to put this on the official Dash.org website, e.g. Buy.Dash.org

Website shows a quick 1 minute video of the process working for completely new users (1 minute is all the time you need)

The website is a non-profit service with the only goal to make the first experience for new users easier and straightforward. All crypto currencies have this exact same problem, but Dash is in a unique position to make this on-boarding process easier. This is not intended to be another big buy service or exchange, the only purpose is to onboard new users and give them a nice and easier way into Dash. The whole Dash community benefits from new users and new money coming in the ecosystem, the Buy.Dash.org website will NOT benefit from this and stay non-profit.

Current Flow:
  • Before the first buy the user is directed to download a Dash client to create his first wallet (Jaxx on iOS, Dash Wallet on Android, Dash on Desktop, Web wallets, etc.)
  • Next the user can spend between $0.5 and $100 to get 0.004-1.0 Dash (limited to $5 for this demo right now, maybe we can increase the limit later, for now we want to keep it simple)
  • If the user has entered his new wallet address and paid the amount with his credit card, he immediately gets his Dash into his wallet (in about 1s thanks to InstantSend)
The Buy.Dash.org website feels and operates like coinbase.com, but just for Dash and without making any profit! All operations are completely transparent, every user can see what's going on, there are no hidden fees or tricks, all source code is open source and others are welcome to copy it and integrate it to their own services. Initially the 100 Dash from this proposal will be available on the website to buy. Once 80% are spent and the money arrived (currently the payment processor would pay out every 2 weeks), more Dash is bought at market price (cheapest price available or from miners in the future, which would be good for exchanges as less miners had to dump their Dash there if they want to sell it).
  • The new Dash will be available on the website and can be bought by any new user.
  • Any fees and overall chargebacks/deductions/etc. are displayed and distributed to all new users, if this goes to several 10%+, the service will probably not be very useful anymore and would have to close down (Fraud protection from the payment provider will help here)
  • Please do not compare this service with fully fledged payment providers or exchanges. This service is NOT for experienced users, the purpose is JUST to help new users. Once a user has already some Dash he should use other services. In later iterations the website will help pointing users to other ways to put funds into exchanges (Kraken, or coinbase and then Poloniex) and get Dash cheaply that way if they are interested and have the time to go through all that.
  • Please ask in the comments for details, especially credit card payment is a complex topic. Overall payment is a very complex problem and many have tried and everyone has their own solution to make a bit of money, but we think it is very bad for initial users to get tricked with way too high rates and fees just to make some big company richer.
The point of this service is to get new users excited in Dash and have a quick experience with all the greatest features of Dash like InstantSend and the nice community. Once Evolution is ready it would be nice if this all is integrated. If this proposal is successful we are willing to put more work into this and do ongoing support. Many more features are possible:
  • Currently Stripe is used for the demo, which has a 2.9% fee plus $0.30 flat, in europe we can get down to 1.4%+0.25euro, but the main market is US as most people have a credit card there, we will try to find better rates in the 1-2% range.
  • Payment via PayPal, Amazon, etc.
  • Easy usage for any other app, wallet, exchange, etc. via API
  • More automated, closer integration with exchange to acquire more Dash quickly
  • Sell Dash and get it back on your CreditCard, PayPal, etc.
  • Sell Dash and get bank transfer/SEPA, etc. (then buy.dash.org would function almost like an exchange, but for complexity reasons we would like to avoid that and just keep it simple)
  • Buying and Selling Dash alone would be a great use-case and showing people many things very easily:
  • Dash prices goes up, if you make a gift to your niece and she pays out to her credit card a month later, she will most likely have more money in $
  • It shows how easy it is to send someone some Dash and if they can’t find a use for it yet, they can easily sell it and use the money. And if they want to get back into Dash, they can easily acquire some coins again.
More details can be found on the BuyDash website about page.
Please be kind if the service is not as newbie friendly as possible, still has bugs or the fees are high for low $ amounts, this is what this proposal is all about. We only hacked together a demo and made it work in a few days, now the real work starts to make it rock solid, find good deals with payment providers to get down to 1-2% fees and help with marketing (hint: interview us Amanda ^^). All of this will cost time and money.

Costs
150 Dash: 50 Dash for the development and BuyDash website support and 100 Dash to fund the BuyDash service, these Dash will stay on the site and will be rebought once the payment processor pays the service. If the Dash price would stay unchanged this will always get back to 100 Dash, which new users can buy. In the future we might want to increase this funds, but for now 100 Dash should be good for a 2 week payment processor schedule and limiting every new user to 0.004-1.0 Dash.

We know that 50 Dash will only cover our basic costs, but we think this proposal has a future and we can request monthly proposal payments to improve the website and service in the future.
All development is done in the latest .NET Core ASP version and will be open-source. The website is 90% js, css and html, the backend (C#) is very thin and can be ported to any other development platform easily. Technical users can easily see the formulas used and see there are no tricks. As far as I know no other crypto payment providers have their full website open sourced.

Closing
By providing this free service we hope new users can be directed more quickly getting their first Dash. Dash is in the unique position to allow such a service, which would be impossible in all other cryptocurrencies (either no way to fund this, no InstantSend, no way to create a NonProfit service like this, etc.). Obviously other problems still have to be addressed like what new users will actually do with their Dash, which we will hope other proposals will address as well. We think this service alone will increase the value of Dash for everyone, but especially for newcomers. We are excited to work on this and many more things for Dash in the future, let's do it.
 
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I love this, I think it's great! I think, for anyone, buying their first crypto is a scary process anyway. The easier we can make it for them the better. Good work guys, I hope this proposal passes!
 
WOW! Big wow. Thanks especially for the video demo.

Some preliminary questions:

1) I'm assuming this service checks out legally on your end? (Looks like you all are based in Germany?)
2) I'm assuming your credit card processor would accept all purchases from United States IP addresses (though perhaps banning New York state, like many other companies already do)?
3) If no profit is made, how will you continue paying for your maintenance and hosting costs?
4) On your "about" page, you mentioned a contingency plan if you begin experiencing too much credit card fraud. Would you please share more details on that here?
5) If you're selling at spot price plus credit card fee only, I imagine you'll get lots of buys! How do you plan to remain stocked?
6) Looks like you've mentioned a buy limit of $100. So if a new person wants to buy $500 in Dash... would they just go through the process five times? And your service will allow this?

Thanks in advance for answering these questions. I'm very, very interested in the answers, and again -- great work on getting this put together.
 
Hey Amanda,

Thanks for the many questions.
amanda_b_johnson said:
1) I'm assuming this service checks out legally on your end? (Looks like you all are based in Germany?)
Click to expand...

The payment is completely handled by Stripe, we worked with other payment providers in the past and the process is very simple, but the fees of those other providers have gone way up (at around 8% to handle all cases). This is why we have choosen Stripe for the demo, it is easy enough and the fees are pretty ok (1.4%+0.25 euro in europe, 2.9% in us+$0.30).

To get things up and running quickly I have used my own company Delta Engine GmbH, which is a legal entity and has already trust, ssl certificates, all the company infos needed, etc. We plan to create a sub company for this purpose in the future if ongoing development is required, it would be best to put this company directly in the us. We had a small office some years ago in the US, so we have some experience in that area, this would also save any converting from and to $ fees, but getting a business up and running in the US is probably too difficult from Europe, maybe it will just all stay here.

2) I'm assuming your credit card processor would accept all purchases from United States IP addresses (though perhaps banning New York state, like many other companies already do)?
Click to expand...

Currently anyone can buy Dash as long as he has a credit card that allows payment in USD (which pretty much every credit card does), the service works just fine from here in Europe as well. Each credit card statement shows the conversion from EUR to USD. However in Germany almost no one has a credit card, this is not the normal way people pay for stuff here, so in the future when we want to include more countries more payment options have to be added. Currently the focus is making it easy for US Customers.

3) If no profit is made, how will you continue paying for your maintenance and hosting costs?
Click to expand...
Either this is a one time thing and we just keep the servers up and running and the thing runs forever (the 100 Dash value in $ are preserved and rebought automatically).
Or if the Dash community likes us to improve on this, ongoing costs are paid through that. Most of the actual support work is done by the payment processor, which handles all requests. Hopefully none of it will get through to us, but even when we are pretty quick supporting many users (e.g. the SoulCraft games released with our engine have over 25 million users and you can imagine there are always issues somewhere of people paying for some In-Game Gold and not getting it, we have a good automated process for handling that as well).

4) On your "about" page, you mentioned a contingency plan if you begin experiencing too much credit card fraud. Would you please share more details on that here?
Click to expand...

Sure, basically this is a worst-case scenario as we have not had any fraud case ever with any payment provider (FastSpring, Stripe, Google, Amazon, Apple, Microsoft, etc.), but usually it was quite simple for us as payback is either not supported or handled by the payment provider before any money reaches us. Here we have different problem as the payment is instant and the Dash is paid out in a few seconds and we never can get it back. So if the worst happens and someone gets around the Fraud protection by the payment provider and around our checks and successfully can claim that he never received any product (again, I think this is impossible as we transparently will show all transactions directly on the website, but you never know with credit cards), then we are screwed as this will cost $15 per lost fraud case (or $5 for other providers and payments, but still a lot).

Let's say it never happens: No Fraud Fee will ever be applied, best case scenario.
Let's say it happens 1-2 times every month: A minor Fraud Fee ($15-$30 of $10000 is 0.15-0.3%) is applied to the remaining buyers until everything is equal again.
Let's say it happens 50 times or more: Then this service will not longer function well ($15*50=$750, the fraud fee would go up to 7.5%) and we either have to add more fraud protection, only allow verified visa, or find other ways around this issue. This is pretty much the worst case scenario, which I cannot envision, but we can at least plan for it.

5) If you're selling at spot price plus credit card fee only, I imagine you'll get lots of buys! How do you plan to remain stocked?
Click to expand...
We don't. It is a simple first come, first served service until we can restock after 2 weeks or the Dash Community decides to increase the pool. Let's see how well it is accepted and then we can still scale up, it is a nice problem to have if everything else works fine.

6) Looks like you've mentioned a buy limit of $100. So if a new person wants to buy $500 in Dash... would they just go through the process five times? And your service will allow this?
Click to expand...
This is still up for debate, I would say the maximum to "try out buying Dash" should be 1.00 Dash for around $100, here the fees are almost negligible and having spend $100 is a nice first try. After that we recommend users other ways to get more Dash. The service should NOT be used by existing users with wallets that have Dash already (pretty easy for us to check, but then again experienced users will have no problems creating new empty wallet addresses).

If the community wants us to increase the limits, it is no problem, in test mode we transferred all of the 10 available Dash with one buy, works just fine, but was way too risky for us, so we limited it to $5 for the demo until this proposal gets approved.

And since the whole thing is open source anyone can host it and put as many Dash at any price they want up :)
 
Tallyho said:
What about KYC/AML stuff? Is it not legally necessary with such low limits?
Click to expand...

Good question. Yes, this is a big issue, especially in the US where many authorities are against all kinds of money laundering. Luckily this is all handled by the payment provider (this is why their fees are sometimes so high), we do not collect any data, but the payment provider knows your email, IP, credit card, billing address, all kinds of fun. If you also provide it the payment processor will know your mobile phone number and we can also ask for much more data (we disabled pretty much everything for the demo to keep it as simple as possible). Maybe a valid address will be a requirement we have to do to comply with all the regulations.

As part of this proposal we will speak to the enterprise support of Stripe and figure out a good deal with them. Hopefully things are not as complex since being a Non-Profit usually helps getting around these issues (e.g. funding wikipedia or donating to a political campaign is easier than actually selling products and making a profit).
 
Having run similar services for much less liquid (as compared to Dash) game currencies like Linden Dollars, I think you are MASSIVELY underestimating the level of fraud you will experience once the scammers find out, they will drain your hot wallet daily. I suggest you add a step, like phone verification, to mitigate this. Also, it may be good to make the max say 5 USD per day. Lets the client get their feet wet with Dash but will not attract scammers as quickly.

Still, love the idea if you can make it work, got my vote.

Pablo.
 
fible1 said:
Having run similar services for much less liquid (as compared to Dash) game currencies like Linden Dollars, I think you are MASSIVELY underestimating the level of fraud you will experience once the scammers find out, they will drain your hot wallet daily. I suggest you add a step, like phone verification, to mitigate this. Also, it may be good to make the max say 5 USD per day. Lets the client get their feet wet with Dash but will not attract scammers as quickly.

Still, love the idea if you can make it work, got my vote.

Pablo.
Click to expand...

Thanks for the helpful words, would you be interested to chat once we get this approved to get your useful input? My brother also had some experiences with Linden Dollars and exchanges, good idea to ask him about fraud as well.

We probably have to take a deeper look into verification, maybe something like this makes sense:
$0.5-$15: No verification needed (fee is pretty high and this is not really worth it to get cheap Dash)
$15-$50: Basic verification (valid phone, sms pin must be entered)
$50-$500: 3D, Visa Verified, etc.

Anyone interested, these are the basic fraud prevention tools already used by the demo site:
https://stripe.com/docs/radar
https://stripe.com/docs/radar/risk-evaluation
 
LostInSpace said:
Thanks for the helpful words, would you be interested to chat once we get this approved to get your useful input? My brother also had some experiences with Linden Dollars and exchanges, good idea to ask him about fraud as well.

We probably have to take a deeper look into verification, maybe something like this makes sense:
$0.5-$15: No verification needed (fee is pretty high and this is not really worth it to get cheap Dash)
$15-$50: Basic verification (valid phone, sms pin must be entered)
$50-$500: 3D, Visa Verified, etc.

Anyone interested, these are the basic fraud prevention tools already used by the demo site:
https://stripe.com/docs/radar
https://stripe.com/docs/radar/risk-evaluation
Click to expand...

Sure, happy to help any way I can. Just drop me a line.

What I would do if I were you, given that this is meant to get users feet wet only, is to limit daily buys to a low amount, like 5 USD. Say 15 USD for phone verified users.

Given this is not a business, I would not even think about 50-500 range; at this range you will need a fraud professional to set up your system. You have to realize that PayPal, Stripe, Amazon, etc. will make you eat the charge back EVERY TIME. I was once had a guy charge back 4k USD even though I had a copy of this guys drivers license, passport, utility bill, and a photo of him with the passport and a signed authorization letter. PayPal could not have given a fuck less; they even refused to review my evidence and I had to eat the charge. Stripe, etc. will have the same policy.

When I started my business I used to think I could mitigate fraud by verifying accounts, etc. that helps you weed out scammers, but once they get through, no amount of verification or documentation on your side will stop your payment processor from reverting the charge. I don't mean to scare you but that is just how it is; since you are doing this as a not for profit, the risk is not even worth the effort.

Feel free to reach out to me any time you want.

Pablo.
 
fible1 said:
Sure, happy to help any way I can. Just drop me a line.

What I would do if I were you, given that this is meant to get users feet wet only, is to limit daily buys to a low amount, like 5 USD. Say 15 USD for phone verified users.

Given this is not a business, I would not even think about 50-500 range; at this range you will need a fraud professional to set up your system. You have to realize that PayPal, Stripe, Amazon, etc. will make you eat the charge back EVERY TIME. I was once had a guy charge back 4k USD even though I had a copy of this guys drivers license, passport, utility bill, and a photo of him with the passport and a signed authorization letter. PayPal could not have given a fuck less; they even refused to review my evidence and I had to eat the charge. Stripe, etc. will have the same policy.

When I started my business I used to think I could mitigate fraud by verifying accounts, etc. that helps you weed out scammers, but once they get through, no amount of verification or documentation on your side will stop your payment processor from reverting the charge. I don't mean to scare you but that is just how it is; since you are doing this as a not for profit, the risk is not even worth the effort.

Feel free to reach out to me any time you want.

Pablo.
Click to expand...
Great advice. Payment processors are really the scum of the earth.

We used to attempt to fight our chargebacks, but then realized it was a lost cause. The dangerous part with a low transaction fee could be the fixed $20-30 CB fee, but at least you're not losing more than $15 worth of Dash on top of that. $15-25 seems like a decent amount for someone to play around with at first.
 
At first glance your site looks like a great idea, similar to the idea I had in the past and everybody thinks it great, and it kinda looks like you solve all the problems Amanda mentioned in her video.
And now your saying this (same things I kept adding in my plan)

We probably have to take a deeper look into verification, maybe something like this makes sense:
$0.5-$15: No verification needed (fee is pretty high and this is not really worth it to get cheap Dash)
$15-$50: Basic verification (valid phone, sms pin must be entered)
$50-$500: 3D, Visa Verified, etc.
Click to expand...

And before long, all you have got going for you is a slick design, and you got all the same KYC/AML as all the other exchanges.

I mean no offence to you or to masternode owners, but speaking from experience this is exactly where things will go to. The only real way around it is the way localbitcoins.com works (I have traded about 4500 different people their, one of the biggest LCB trader in my area if not biggest), do it has its problems as well especially do the fact with frauds and so forth, and it actually went in the wrong direction by solving them by again with AML/KYC policy's


On a personal note, I still have the idea how to combat that offering a better product localbitcoins has:
by use of a better intuitive design
by use of a more complex user rating system
Automated suggested user amount limitations
No intend of fraud information delivery system

I never got it off the ground mostly do the need for competent, trustworthy people that where to expensive for me to hire.
 
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The philosofers coin said:
At first glance your site looks like a great idea, similar to the idea I had in the past and everybody thinks it great, and it kinda looks like you solve all the problems Amanda mentioned in her video.
And now your saying this (same things I kept adding in my plan)



And before long, all you have got going for you is a slick design, and you got all the same KYC/AML as all the other exchanges.

I mean no offence to you or to masternode owners, but speaking from experience this is exactly where things will go to. The only real way around it is the way localbitcoins.com works (I have traded about 4500 different people their, one of the biggest LCB trader in my area if not biggest), do it has its problems as well especially do the fact with frauds and so forth, and it actually went in the wrong direction by solving them by again with AML/KYC policy's


On a personal note, I still have the idea how to combat that offering a better product localbitcoins has:
by use of a better intuitive design
by use of a more complex user rating system
Automated suggested user amount limitations
No intend of fraud information delivery system

I never got it off the ground mostly do the need for competent, trustworthy people that where to expensive for me to hire.
Click to expand...
Let's keep in mind that this is a $20,000 proposal. It fills a need. It's low risk. It's worth it. Vote yes.
 
dashdisciple said:
Let's keep in mind that this is a $20,000 proposal. It fills a need. It's low risk. It's worth it. Vote yes.
Click to expand...

Thanks for your nice words, when we created it, the proposal was around $14000 ($4500 for the development, $9500 for funding the service for new potential Dash users), but Dash likes going up up up ..
 
@LostInSpace Please reach out to me. I can put you in contact with a company that has solved the fraud problem. ALL the big credit card guys on the Bitcoin purchase sites use the same company (or are switching to them) including Coinbase. They know what they're doing... former PayPal risk analysts on their team. My email is [email protected].

Unaddressed, the fraud issue will quickly bankrupt this service or the credit card companies will blacklist your service very very quickly. You are massively underestimating the challenge associated with this aspect of the service.
 
Ryan Taylor said:
@LostInSpace Please reach out to me. I can put you in contact with a company that has solved the fraud problem. ALL the big credit card guys on the Bitcoin purchase sites use the same company (or are switching to them) including Coinbase. They know what they're doing... former PayPal risk analysts on their team. My email is [email protected].

Unaddressed, the fraud issue will quickly bankrupt this service or the credit card companies will blacklist your service very very quickly. You are massively underestimating the challenge associated with this aspect of the service.
Click to expand...

Thanks for the help, I wrote you an email. Obviously we are coming from a different field (gaming and free to play) and we never planned to directly handle credit cards or fraud ourselves, but instead find another service that will provide this more securely and more trustworthy. The goal was to make the whole process easier, we don't know what we would have ended up with, but we thought the BuyDash site we quickly put together in a few days was a good start and was working fine already. In any case, we accepted other well paying crypto currency related work and are happy to stay in the field.
 
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