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P2P cryptocurrency exchange that doesn't hold funds

Help Topics

How to buy cryptocurrency

To buy cryptocurrency you need to have your own cryptocurrency wallet.

  1. Go to the "Buy bitcoins" or “Buy litecoins” section of the website by clicking the link at the top of the page.
  2. Choose an offer from the list, or use filters to find specific offers.
  3. Enter the amount of cryptocurrency, or the fiat currency equivalent, of the amount of cryptocurrency you want to buy.
  4. Choose a payment method from the list.
  5. Additionally, you have the option to create a comment, which your counterparty will be able to see after the contract is created.
  6. Click "Accept offer and create contract".
  7. Further actions depend on the type of contract:
    • Contract type 2-out-of-2: After the contract is created, wait until seller deposits cryptocurrency into the multisig escrow.
    • Contract type 2-out-of-3: After the contract is created, you must enter your payment password and wait until seller deposits cryptocurrency into multisig escrow.
  8. When you see that the funds are locked in escrow and the contract status is changed to "In progress", it is safe to pay the seller by sending money using his payment details. When you're done, click the "I've sent the payment" button.
  9. When the seller verifies the funds have arrived, he will then release the cryptocurrency from escrow to the cryptocurrency address specified in your trading settings or to one, that you’ve mentioned on the contract creating page.
  10. Your contract is now finalized.

What you should know

On the offer page, when you are about to create the contract:

  • Make sure you’re ok with the "Payment window" - which is the time within which both parties (you and your counterparty) must transfer the money, finalizing the contract.
  • Note "Average release time" for the seller - an average time for which this trader made a release from escrow in all his trades combined.
  • Note the number of confirmations needed to complete the contract - this is how many cryptocurrency transaction confirmations you will need to wait for, until the you can safely proceed with sending the payment.

Also:

  • When looking for an offer, you can make use of the filters, and see all offers in descending or ascending order, and filter them using various options.
  • If the contract status has changed to "Paid", you’ve sent the funds, but your counterparty does not want to release the cryptocurrency – you can start a dispute after the “Payment window” expires.

How to sell cryptocurrency

To sell cryptocurrency you need to have your own cryptocurrency wallet.

  1. Go to the "Sell bitcoins" or “Sell litecoins” section of the website, by clicking the link at the top of the page.
  2. Choose an offer from the list or use filters to find specific offers.
  3. Enter the amount of cryptocurrency, or the fiat currency equivalent, of the amount of cryptocurrency you want to sell.
  4. Choose a payment method from the list. To save your payment details for later trades, enter a name for the payment instructions, or you can choose an existing set of payment instructions from the list. You also have to enter or change your payment details (e.g. bank account number and/or other information required to make the payment through the selected payment method).
  5. Additionally, you have the option to create a comment, which your counterparty will be able to see after the contract is created.
  6. Click "Accept offer and create contract".
  7. Further actions depend on the type of contract:
    • Contract type 2-out-of-2: After the contract is created, you deposit cryptocurrency into the multisig escrow address. Сlick "Create payment password" and either "Deposit bitcoins" or ”Deposit litecoins” (after you have created the payment password) and you’ll be given an escrow address where to send the funds.
    • Contract type 2-out-of-3: After the contract is created, you deposit cryptocurrency into the multisig escrow address. Click "Create payment password" and either "Deposit bitcoins" or ”Deposit litecoins” (after you previously created the payment password), but in this case, you’ll be given an escrow address where to send the funds once the buyer has entered his payment password.
  8. When cryptocurrency is locked in escrow, wait until the buyer sends fiat to you.
  9. When the contract status is changed to "Paid", it means the buyer sent you the payment. You now need to make sure the funds actually arrived. After you verify this, press the "Release deposit" button, and enter your payment password to release the cryptocurrency to the buyer.
  10. Your contract is now finalized.

What you should know

On the offer page, when you are about to create the contract:

  • Make sure you’re ok with the "Payment window" - which is the time within which both parties (you and your counterparty) must transfer the money, finalizing the contract.
  • Note "average payment time" for the buyer - an average time in which this trader made a payment in all his trades combined.
  • Note the number confirmations needed to complete the contract - this is how many cryptocurrency transactions confirmations you will need to wait for, until the buyer can safely proceed with sending the payment.

Also:

  • When looking for an offer, you can use the filters, and see all offers in descending or ascending order, and filter them using various options.
  • If you locked the cryptocurrency in multisig escrow, and didn’t receive the payment from buyer (and contract has not been marked as "Paid") you can cancel the contract and refund your cryptocurrency back to yourself, as soon as the payment window expires. If the contract status has been changed to “Paid”, you can start a dispute.

Contract types


What is a multisig escrow?

Escrow is a P2SH cryptocurrency multisignature address, which requires 2-out-of-2 or 2-out-of-3 keys to sign the transaction.

Each time a contract is created between two parties, Hodl Hodl exchange generates a unique multisig escrow cryptocurrency address. Seller then sends cryptocurrency from his wallet to this escrow, and while the cryptocurrency is locked in escrow, buyer sends fiat to the seller. Then seller releases cryptocurrency from escrow using his payment password, and the buyer receives the cryptocurrency in his wallet.


What are the different types of contracts at Hodl Hodl?

At Hodl Hodl, contracts differ by the number of keys to the unique multisig escrow, which is generated by Hodl Hodl for each specific contract. Types can be:

  • 2-out-of-2: This means, that escrow generated by Hodl Hodl during the contract, requires two keys to make a release from escrow - one belongs to the seller and the other key is Hodl Hodl's.
  • 2-out-of-3: This means, that escrow generated by Hodl Hodl during the contract requires two keys to make a deposit or release both to and from escrow - but in this case, one key belongs to the seller, one belongs to the buyer, and the other one is Hodl Hodl's key.

How do users obtain their keys to escrow?

User's key is generated in browser and gets encrypted by payment password that seller (in every contract type) or buyer (in the case of 2-out-of-3 contract type) create during their very first contract.


When are the keys used?

Escrow keys are required in the following possible situations.

Contract type 2-out-of-2:

  • Contract is canceled. In case the contract has been canceled and the cryptocurrency has been sent to escrow, seller can refund back to himself by entering the payment password - as Hodl Hodl will automatically sign the transaction with it’s key.
  • Contract is completed. If everything goes well in the contract, seller releases the cryptocurrency from escrow to the buyer’s cryptocurrency wallet by entering the payment password - and Hodl Hodl will automatically sign the transaction with it’s key.
  • Contract is disputed and administrator did not take sides. In this case, seller is able to release the cryptocurrency from the escrow to the buyer’s cryptocurrency wallet by entering the payment password - as Hodl Hodl will automatically sign the transaction with it’s key.
  • Contract is disputed and administrator has taken the buyer’s side. If buyer has won a dispute, then Hodl Hodl will never sign a refund transaction to the seller’s address from the escrow. However, releasing to the buyer’s cryptocurrency wallet will only happen if seller enters his payment password - and Hodl Hodl will automatically sign the transaction with it’s key.
  • Dispute is resolved in favor of seller. If the seller has won a dispute, then he can refund the cryptocurrency from the escrow back to his cryptocurrency address by entering the payment password - as Hodl Hodl will automatically sign the transaction with it’s key.

Contract type 2-out-of-3:

  • Contract is canceled. In case the contract has been canceled and the cryptocurrency has been sent to escrow, seller can refund the cryptocurrency back to himself by entering the payment password - as Hodl Hodl will automatically sign the transaction with it’s key. Buyer is not be able to make a release from the escrow - as Hodl Hodl will not sign such a transaction.
  • Contract is completed. If everything goes well in the contract, seller releases the cryptocurrency from escrow to the buyer’s cryptocurrency wallet by entering the payment password - and Hodl Hodl will automatically sign the transaction with it’s key. Buyer is not be able to make a release from the escrow - Hodl Hodl will not sign such a transaction.
  • Contract is disputed and administrator did not take sides. In this case, seller is able to release the cryptocurrency from the escrow to the buyer’s cryptocurrency wallet by entering the payment password - as Hodl Hodl will automatically sign the transaction with it’s key. If the administrator hasn’t resolved a dispute in favor of any user, neither buyer nor seller will be able to make a release or refund from the escrow - Hodl Hodl won’t sign such a transaction.
  • Dispute is resolved in favor of buyer. If buyer wins a dispute, then he can release the cryptocurrency from the escrow to his cryptocurrency address by entering his payment password - as Hodl Hodl will automatically sign the transaction with it’s key. In this case, seller will not be able to refund the cryptocurrency from the escrow - as Hodl Hodl will not sign such a transaction.
  • Dispute is resolved in favor of seller. If the seller has won a dispute, then he can refund the cryptocurrency from the escrow back to his cryptocurrency address by entering the payment password - as Hodl Hodl will automatically sign the transaction with it’s key. In this case, buyer will not be able to release cryptocurrency from the escrow - as Hodl Hodl will not sign such transaction.

What does Hodl Hodl’s transaction signing process look like?

Client gets raw unsigned transaction and when payment password confirmed, the transaction gets signed with decrypted user's key right in user's browser. Then Hodl Hodl signs the transaction with it's key on server side and broadcasts it to the blockchain.


What are the fundamental differences between the two contract types?

Besides the differences explained above, we’d like to shed light on the fundamental differences between the two contract types and why they both exist at Hodl Hodl.

2-out-of-2: Initially, Hodl Hodl exchange provided an opportunity to trade using only 2-out-of-2 escrow, because it’s a more secure option for trading, due to the following - the less keys the escrow has, the lower the chance of fund loss. But in this case, buyer doesn’t have any control over the funds locked in the escrow, and in the case of him winning a dispute, he can do nothing unless seller is willing to release the funds.

2-out-of-3: After Hodl Hodl saw a demand in these types of contracts, we have implemented escrow with three keys. Demand was due to the fact that buyers want to have at least some control over the funds locked in the escrow. Despite the advantages of this type of contract, be aware these contract types are a less secure option for trading despite the advantages, since the more keys the escrow has, the greater is the chance of fund loss.

Ratings and reviews


What is the rating system and why do we need one?

The rating system shows if your counterparty is trusted by other traders. It shows whether he is fulfilling his obligations to other parties, whether he makes the payment fast, and whether he is responsive, etc. The Rating system is a useful tool for traders - it is information about how the trader behaved in the past and a reason/incentive to continue to act properly in the future. Each review on Hodl Hodl consists of two parts: a rating given by the reviewer and an optional comment.


How is the rating for each user calculated?

The rating for each user is calculated as an arithmetic average of all ratings given to that user by other traders.


When can I give another trader a review?

You can leave a feedback about your counterparty after successfully completing the contract or after a dispute has been started.


Is it required to leave a comment with the review?

No, it is not, but it is crucial for your convenience and confidence: it is very important for traders to not only see the rating, but also understand what kind of issues or advantages a particular trader has.

How does Hodl Hodl ensure security


Multisig escrow

Hodl Hodl ensures traders safety by providing a unique multisig escrow for each contract created on our exchange. The cryptocurrency remains locked in the multisig escrow (P2SH) address on the blockchain.

In order to release cryptocurrency, two keys are needed - one which belongs to the seller, one belongs to Hodl Hodl exchange, and (in case the contract type is 2-out-of-3) another belongs to the buyer. Such a system ensures that both buyer and seller are protected from scams. The seller is not able to have cryptocurrencies refunded from escrow without both Hodl Hodl’s key and the buyer’s approval, and the buyer is not able to receive cryptocurrency unless the exchange signs the release transaction with its key, and the seller signs it with his key.


Reputation system

Each trader on Hodl Hodl has a reputation and public history of trades, so before you engage in a contract – you can protect yourself by finding out information about your counterparty. You can read more about the reputation system in the "Ratings & Reviews" guide.


Limits system

We apply limits to users for the sake of improving your overall experience, specifically your safety and comfort level when using our exchange.

Our exchange offers many features, and each feature could potentially become a target of any of the well known spam & scam cases in the crypto-community, so we have taken the necessary steps to reduce this possibility so that unfair users cannot harm you, and user limits help protect users.

You can find out more information about limitations in our FAQs section.


Dispute resolution system

Whenever you have problems during the contract, both parties are each able to start a dispute if they cannot resolve issues on their own.

Once a dispute has been started, the support manager will study the case, and give you further instructions in order to resolve dispute.


Two-Factor Authentication

Hodl Hodl exchange provides you with the opportunity to use an advanced level of security - Two-Factor authentication.

When you sign in to your Hodl Hodl account, Two-Factor Authentication requires you to have access to your phone, as well as your username and password. This means that if someone obtains your password, they still won’t be able to sign into your account because they don't have your phone.

To enable 2fa, go to "Edit your profile" in your profile, click on "Two factor authentication", and then follow the instructions.


Trusted devices

As additional level of security, Hodl Hodl allows you to set up this feature - trusted devices.

After turning on this security feature, every time a new device attempts to access your account, you’ll immediately be sent an email containing a unique code, which you’ll have to enter on Hodl Hodl in order to access your account. Otherwise your account cannot be accessed from a new device.

To enable it, click “Edit your profile” button in your profile, mark the checkbox “Only confirmed devices” and save changes.

What to do in case of a dispute?


What is a dispute?

A dispute is a special status of the contract which indicates to both parties, as well as the site support managers, that there are issues both parties are unable to resolve.


How does it work?

A dispute is started when either a buyer or seller clicks on the "Start a dispute" button. A Hodl Hodl support manager will contact both parties within 10 hours, and provide further instructions how to resolve dispute in the contracts’ chatroom.


How can the support manager help?

The support manager will evaluate the situation by analyzing all facts, and by listening to both parties. Then the support manager will make a decision, which, depending on the contract type, leads to different results:

  • Contract type 2-out-of-2: Administrator will decide whether to allow a refund of cryptocurrency back to the seller, or to let the cryptocurrency remain locked in escrow. In this case, Hodl Hodl exchange has no way of releasing the cryptocurrency to the buyer without the signature from the seller. Thus, even if the support manager takes the buyer’s side, the support manager will not be able to assist in releasing the cryptocurrency (making the trader’s reputation an important consideration prior to creating the contract).
  • Contract type 2-out-of-3: Administrator will decide whether to allow a refund of cryptocurrency back to the seller, or to allow the buyer to release the cryptocurrency to his wallet address.

What happens to the cryptocurrencies while contract is being disputed?

Cryptocurrency remain locked in multisig escrow.


When can one start a dispute?

The dispute can be started once "Start a dispute" button appears on the contract. This can only be done when a contract has a certain status, for example, when the payment window is expired and contract status is "Paid" - buyer can start a dispute. When status of contract is “Paid” - seller immediately can start a dispute.


Does it affect my reputation if the contract is being disputed?

Yes, the counterparty may review you while the contract remains disputed.

Risks and precautionary measures


How do I find out more about user before trading?

You can check the user’s profile before trading, here you’ll find:

  • Information about their reputation, and reviews of this user;
  • Statistics from his previous trades;

Reputation and reviews are critical, since they are feedback from his previous trades, you can learn about the experiences of people who have done trades with this person before (their previous trading partners/counterparties).

Also, important to know his trading statistics. For example, on the user’s profile, you can see how many trades he’s done before, and etc.


Who are "Verified" traders and why it is safer to trade with them?

It’s better to trade with “Verified” traders, since they’ve already provided all the requested information about themselves to Hodl Hodl, with the aim of becoming more reliable traders on the exchange.

Why should I use First-trade limit?

Since an important part of offering trades involves you receiving requests from new users - you can limit the potential damage they could do to you, by setting a first trade limit. This feature limits your first trades with users, to the exact amount you set. Also, offers with first-trade limits are less attractive to fraudulent buyers.


Why is it unsecure to release cryptocurrency before payment is received?

Never release cryptocurrency in favor of the buyer if you haven’t received the payment, even if the trader is reliable “Verified” and “Trusted” with a great reputation, since no one can be held responsible if the funds never arrive. In other words, release the cryptocurrency in favor of the buyer only if you have already received the funds, otherwise, you would only have yourself to blame.


Which payment methods can I use?

To buy or sell cryptocurrency, you can only use payment methods supported by our platform. You should be aware of any and all risks associated with each payment method you consider.

Note: these risks only exist if you’re selling cryptocurrency, since the buyer is protected by the escrow system, and the seller doesn’t have an opportunity to make a chargeback, or any illegal actions with cryptocurrency.

To best protect yourself, it’s a good idea to research your desired payment method, read its “Terms & Conditions” and to research and learn about other user experiences before using the payment method yourself.


What does risk level mean?

On the “Payment methods” page you can find a table with all the payment methods available at Hodl Hodl (with more to come). In the table, there is a particular column “Risk level”, which is explained below:

  1. Risk level: "Low".
    This means that the payment method is safe to use, and it’s irreversible or nearly impossible to reverse. Trading with these payment methods do not require precautionary measures.

  2. Risk level: "Medium".
    Using this payment method means there is a chargeback risk. Also, your account on the payment system may be suspended/blocked at any moment if the service provider claims to detect any suspicious actions. When trading with these payment systems, it’s advised to use special precautionary measures, in other words, proceed with caution.

  3. Risk level: "High".
    A serious risk level exists with these payment methods – it’s easy for a chargeback to occur. It could be done in hours, days or even months after the trade. Also, there is a high possibility that service provider will ask you for extra identification to receive or send the payment, and there could be an extended delay in your trade because of this (for example, using Payoneer payment system). Your account with the payment system may be suspended or blocked at any moment if the company claims to detect any suspicious activities. Therefore, when trading with these payment systems, it’s advised to use special precautionary measures.

  4. Risk level: "Unknown".
    Hodl Hodl didn’t make a research for these payment methods and do not have any information to share with you. You should make your own research before using payment method with risk level “Unknown”.

Which precautionary measures can I use?


If you want to use risky payment method, avoid fraud, and protect yourself as much as possible, you should consider the following advices:


How to choose secure payment method?

If you want to use a risky payment method - it is best to familiarize yourself with it:

  • Read the Terms & Conditions.
  • Learn from other user experiences.
  • Find out how the payment method provider regards cryptocurrencies, how do they treat cryptos?

This is necessary because when you use a risky payment method - your account can be suspended/blocked if the provider doesn’t like something, you could be asked to pass a verification process or to provide additional information, such as what kind of payment you’re making and the source of your funds. The main problem with risky payment methods is that it’s easy to do a chargeback (you - as the seller, release the coins, and after that, the buyer reverses his payment back to himself).

Please also be aware that some “Low risk level” payment methods also carry risk. For example, bank transfers (SEPA, SWIFT, National wire transfers, etc...) could be flagged, with the associated accounts and transactions temporarily froze if the bank suspects an unauthorized person has gained control of a user’s credit card or bank account. This would be done as a bank security or fraud prevention measure. In this scenario, you could receive a transfer from a stolen source, and it could result in your account being suspended, and the money being charged back, after a lengthy criminal investigation.

To avoid this situation, you can ask your counterparty to provide an ID document and match the name on their ID with the sender's account name.


If you have other questions, please contact us via