A deep dive into LocalBitcoins.com the Bitcoin marketplace.
LocalBitcoins.com is a peer-to-peer service that allows people to connect with each other to buy and sell bitcoin ‘in person’. This term ‘in person’ is a broad term that doesn’t necessarily mean that the transacting parties have to be in the same geographical location or space-time continuum. Though it is not to say that they can’t. First of all, this is wonderful and sticks to the esprit de corps of the Bitcoin world. The advantages of this are immense. You should know that unlike online exchanges, there is no waiting period. Your bitcoins are released instantly after the exchange.
However, I feel strongly that there are things that you need to know: One, exchanging in person provides more protection of personal information since one doesn’t have to share delicate private information as you would do so to online exchanges. Additionally, meeting with strangers to exchange money is not safe, if you haven’t a clue on mitigating the risks associated with it. It is also possible to transact on LocalBitcoins with traditional payment methods like your bank account, paypal and even mobile money.
There are some basic things that will help guide you in starting up and thriving with LocalBitcoins, which are:
While like any other money-related platform, you need to sign up for account. It takes just a few minutes for a very ‘present-minded sign-up’, all that is needed is a password, username, and email. Now what I mean with ‘present-minded sign-up’ is a high-level of caution and detail-orientation when signing up to anything, especially when it comes to money. Then what you need to know next is that there are several methods to buy or sell bitcoins on LocalBitcoins.
The easiest way is contacting people who have already posted ad (Yes, people do post ads ascribing to it the amount of BTC that they are selling or buying and at what rate). Once you understand that,go ahead and click on the Sell or Buy tab at the top of the page, whichever you are engaging in, and this will send you to a page with numerous people looking to transact. One can customize what they are looking for subsequently, but they start you off with bids and asks from people in your local area. Once you locate a trade that interests you, click on the ad and let them know how much you want to sell or buy. For instance, if you are selling bitcoin, you will need to fill in your LocalBitcoins wallet with the amount you wish to sell, before you are able to contact the buyer. Notably, buyers don’t need to load any bitcoins.
Afterwards, through LocalBitcoin’s chat function, you can arrange where to meet (if you must) and what time to do the exchange. After deciding on a place and time, head to the place at the correct time and location. The person exchanging bitcoins will need to sign into his LocalBitcoins account, and click on the trade, accessing their dashboard. There are several ways to do it, but the person who will be selling his bitcoins will need to need to release the bitcoins when they are exchanged for cash. Post-transaction, cash or bitcoin, the parties involved can go the their separate ways.
One can never err on the side of caution with regard to money. Fortune favors the prepared, being prepared, and being knowledgeable on the pertinent details can deter criminals from ever attempting to thieve from you. Don’t be an easy target. Thinking about this: meeting at night, when visibility is lower and less people around, is a bad idea, unless you hack it don’t do it. The best time to meet is during the daylight, around the noon hour. You should be aware that it might be difficult to meet at this time for some folks during the weekdays, that is why the weekends were invented. Not just for debauchery and all-manner of hedonism, but also for the prudent conduct of business.
The security of the location is very important, and obviously, wifi is a must or a strong internet connection (Better get those bundles if things will run smoothly, not to mention good network coverage). It could be popular spots at a mall, such as ArtCaffe, Java, or Subway, whichever. Even better is when one of these locations has or is adjacent to security guards. Shopping malls usually have security guards. Those ‘askaris’ could save your bitcoins/cash. And this is blatant as the noon-sun, when picking where to sit, try to pick a spot that gives both of you plenty of space. A table between between both of you is the best, which allows both participants to feel comfortable.
It is recommended to head to the location a little bit early (run some recon and canvas the joint). Sign into your LocalBitcoins account on their phone or laptop, and be ready to release the bitcoins. It is important not to send the bitcoins until the physical exchange. Show the person you are exchanging with that are ready to release the bitcoins. The fiat being exchanged should be counted and placed on the table. Check the bills to see if they are counterfeit bills. If they check out, release bitcoins and take the cash. It is important that you able to tell fake bills, if not, get to knowing them.
It is contra-indicated to stick around in the area after the exchange. Even if you do not have cash on you, it best to avoid any curious ‘look-arounds’ that may cause problems. On top of that, you should leave by some means other than walking – bike, car, taxi, or bus. This will ensure you will not be hassled or rob by anyone who saw the transaction.
Chiefly, make sure the bitcoins being held in your LocalBitcoin’s wallet are safe. LocalBitcoin’s is a hot wallet, which means it’s security can be compromised. A hot wallet is a bitcoin wallet that is hosted on the web. The opposite of hot wallets are cold wallets, which are stored offline and have more security. One point of order you should note is that the LocalBitcoins wallet is actually less secure than regular hot wallets because you will regularly be connected to public wifi while logged in. So don’t keep all your eggs in one basket, only have the amount of bitcoins that you need for the transaction in the wallet.
Please ensure that you use LocalBitcoin’s 2-factor authentication. It is one of the simplest ways to make your account secure. 2-factor authentication uses apps like Authy or Google Authenticator. These apps sync up with your LocalBitcoins account, so when you log in you will have to provide a second code, other than your password. This code is a randomly generated and a temporary string of numbers provided by an 2-factor authentication app. You will need to type in the 2-factor authentication code and your password each time you log in. It is almost impossible for hackers to get the 2-factor authentication code because it is randomly generated, and different each time. This adds a much needed layer of security.
A lot more people continue to use LocalBitcoins globally with the amount of volume generated. For instance, on the 14th of January 2017, the volume stood at a weekly average of $22 million with the Kenyan relative figure being at Kenya Shillings (Kshs) 5 million.
If you are starting out on bitcoins, it is a great place to sharpen your skills. You can visit LocalBitcoins here.
Disclaimer: This opinion piece should not be construed to be financial advice, it is a technical review of the LocalBitcoins platform. The reader is advised to do their own due diligence on safety, economic model and local regulatory compliance before utilizing this platform read disclaimer.