Last Updated: 03 November 2019
We all remember the period when cryptocurrency had started gaining momentum, many folks were beginning to consider crypto as potential long term investment vehicle. As result, a lot of us made an initiative to turn our savings account into Bitcoin and other popular cryptocurrency. Bitcoin was named “digital gold”, and it was often compared to the value of real gold and to the fact that it also had to be mined. There were times when folks were taking out second mortgages to buy Bitcoin, and others were maxing out their credit cards. Nevertheless, when the market settled or some even call it crashed, things cooled down and went back to normal.
Although buying Bitcoin process still isn’t as straightforward as buying an ice cream, we’re surely making a steep progress toward bringing the future together by creating new ways to buy bitcoin. Buying cryptocurrency via bank transfer is considered a legacy approach. There are other methods of course like; credit cards and debit cards, mobile payment gateways like neteller, paypal, perfect money, skrill, webmoney, okpay and many more. Despite the growing demand for electronic payment gateways, folks around the globe are still used to paying with cash. Some of us realized the demand for buying bitcoin with cash, as result LocalBitcoins was founded.
LocalBitcoins allows bitcoin investors to make crypto purchases with cash as well as using other electronic options that I’ve just mentioned above. LocalBitcoins is a peer-to-peer exchangeplatform designed to connect buyers and sellers via secured escrow account or by setting up a person face to face meeting.
Localbitcoins was founded in 2012 by Jeremiah Kangas. Nikolaus Kangas is the company’s present CEO operating out of Helsinki, FInland. The popular Bitcoin exchange is currently operating out of 248 countries. Furthermore, the company make definitive claims about not accepting investments from the venture capitalists groups. LocalBitcoins politics represent decentralized environment, where people govern the business, opposed to adopting an opposite philosophy, where the upper hand is being given to the investors. The Peer to peer giant was built to give most of the control back to the people by letting the users dictate the rules of the trade. Throughout the human history, all trades were performed in person, where various goods exchanged hands. It appears that the founders decided to apply the same traditional core principles to the modern world. Nevertheless, before the start of the digital era, the trades were made in person, and many times the parties that were involved knew very little about each other. As result many times things went the wrong way. Unlike our ancestor partners in trade, we’re presented with an opportunity to learn about the person with whom we’re about to meet via LocalBitcoins digital user profile. Each profile clearly displaying user’s rating, feedback and trade history, so that we can either choose to accept the trade or deny. Most importantly, buying and selling cryptocurrency on LocalBitcoins is always free.
LocalBitcoins operates by charging 1% advertisement fees from the sellers. There are also 0.5% fee paid with every invoice.
THE ADVANTAGES OF LOCALBITCOINS
- Cash payments are widely accepted.
- The exchange operates in over 248 countries including US.
- Due to the decentralized structure, LocalBitcoins participates in those countries where others has been banned.
- The only P2P Bitcoin exchange platform made for securely swapping cryptocurrency in your local area as well as via escrow account.
- Bitcoin can be purchased with any local Fiat currency.
- The platform supports 2FA (two factor authentication) and login-guard for better security.
- The login-guard is made to send notifications if a login attempt is made from a new browser.
- PayPal is now being accepted as one of the payment methods.
- Absolutely no buying/selling limits.
- No identification authentication is required.
THE DISADVANTAGES OF LOCALBITCOINS
- The service isn’t available in Germany of the state of New York.
- High chances of fraud. There were many reports where people were being scammed by the fraudsters.
- If you have been scammed, you’re on your own. LocalBitcoins staff will not do a thing to get you refunded. There were many instances, when a seller received bank transfer, but had the transaction reported as unpaid.
- Coins except Bitcoins are unavailable for trading on LocalBitcoins. However, LocalEthereum has been made available for trading Ethereum.
- Many new users are bound to have problems with making the first sale or purchase due to trust issues and lack of rating.
- The transactions made using escrow account, may take longer to complete in comparison to traditional exchange platforms like Bitfinex or Coinbase, where the transactions to buy or sell are made almost instant.
The government regulatory compliance part doesn’t really relate to LocalBitcoins as institution, because of its Peer to Peer business structure, where folks are dealing directly with each other without an intermediary overseeing each transaction.
THE MARKET POSITIONING
Due to company’s unique business model, wide reach, anonymous approach and strong demand in places where others are restricted to operate, the global peer to peer Bitcoin leader gained its presence and popularity in over 248 countries.
Localbitcoins has most of its presence in Venezuela (12.2%), followed by United States (9.3%), UK (7.8%), also China (5.8%) & India (3.8%). Its known for operating in over 16000 cities worldwide.
Apparently the social media does not carry a big influence on the overall incoming traffic. Despite YouTube’s presence delivering positive signals, the overall traffic from social media begs for more.
REGISTRATION & SECURITY
The registration process on LocalBitcoins is very straight forward. Since the popular peer-to-peer exchange platform promotes anonymity, things like real name and address aren’t required to complete the registration. For verification purposes, a real documents proving the identity will be required to be submitted, however the LocalBitcoins Policy claims that the submitted information will not be willingly shared with the government agencies. In some cases if the seller decided to perform KYC, a two piece of ID along with selfie will be ask to be submitted.
When it comes to security, just like with many traditional bitcoin exchanges, the 2FA feature along with the login guard could be easily located under the user settings menu. The login guard prevents unauthorized entry to your accounts by sending out an alert when a login attempt is made from a new browser window.
THE LOCALBITCOINS FEE SCHEDULE
LocalBitcoins is the only peer-to-peer Bitcoin exchange platform without traditional fee schedule. However, a 1% fee is being charged to the seller upon completion of the deal. We can draw a basic conclusion that exchange fees are being charged, in fact even heftier in comparison to some of the bigger traditional exchanges like bitfinex, binance, coinbase etc… If a buyer chooses to pay with cash, an invoicing system needs to be used, where a buyer is being charged an additional 0.5%.
THE LOCALBITCOINS CUSTOMER SUPPORT
The support team is available for assistance 24/7, however users complain about lack of attentiveness and professionalism. Many support agents are not properly trained to assist with crypto related questions, as result off topic, idiotic answers are being given that piss many traders off. A LocalBitcoins team is also involved with hourly paid custom research projects. Rummers scream that, LocalBitcoins team’s participation in paid projects, leave very little room for addressing customer support issues. Many believe LocalBitcoins team is playing with fire by completely disregarding the growing customer support mess. As many of the traditional competitors continually gain community’s recognition and support, LocalBitcoins are slowly but surely moving in the opposite direction. I strongly believe that a company still has very strong potential, though change will not occur without an absolute management restructure.
Presently, LocalBitcoins is the only peer-to-peer exchange platform made for buying and selling bitcoins for cash. Although cash purchases still attract a significant globe wide crowd, the ongoing security issues are gradually damaging LocalBitcoins reputation. The growing number of various scam scandals downgrade the overall exchange’s trustscore, leaving less room for scam victims take a second chance. Although the deregulated part of the exchange’s structure may resemble the original Bitcoin’s philosophy, in reality it does not benefit the business in the long run.