We have kept a small 2'X4' wood bin in my basement for about 3 years (blog link
). It's worked pretty well. We recently stepped it up and built a flow through style bin out of some cheap plastic containers(blog post
). So far the worms seem to be going nuts! I can actually hear them moving when I open the top.
I think you could have a bin outside, but in the summer you would need to be careful they do not get too hot, and make sure they have some ventilation holes for drainage.
Let us know if you have any additional questions.