LocalBitcoins

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LocalBitcoins is a bitcoin startup company based in Helsinki, Finland. Its service facilitates over-the-counter trading of local currency for bitcoins.[1] Users post advertisements on the website, where they state exchange rates and payment methods for buying or selling bitcoins. Other users reply to these advertisements and agree to meet the person to buy bitcoins with cash or pay with online banking. LocalBitcoins has a reputation and feedback mechanism for users and an escrow and conflict-resolution service. As of December 2013, LocalBitcoins has around 110,000 active traders with a trade volume of 1400–3000 bitcoins per day.[2]

Description[edit]

LocalBitcoins is a platform that allows you to securely and anonymously exchange bitcoin for cash or for another cryptocurrency. Service on a large scale, you can choose any of more than 8,000 cities in 224 countries around the world. On LocalBitcoins there are 75 currency pairs to exchange, including Bitcoin. All payments are processed instantly, and fees for the operations are minimal.

LocalBitcoins is a peer-to-peer bitcoin exchange, which enables users to buy and sell digital currency from each other using a variety of payment methods. This exchange is preferred by many users, as privacy is to a certain extent protected, because it does not require the provision of personal data or documents. You can also sell your bitcoins on LocalBitcoins. The service takes 1% of the Commission from the person who sells bitcoins, there are no additional commissions.

Since the hard fork that produced bitcoin cash, many individuals wondered if LocalBitcoins would compensate people with BCH if they held bitcoin there before August 1. Some even talked of threatening the company with a lawsuit because Localbitcoins didn’t mention a plan for after the fork. According to the company, BCH will not be supported by the organization, but they have sold the BCH balances and have credited users with BTC.

The startup details that the BCH held on Localbitcoins was sold and “credited to customers at its corresponding value.” All of the BCH funds left on the exchange were converted to bitcoin (BTC), and the company says open trades were also considered.

“Open trades that had any balance at the time were also taken into consideration, based on who received the Bitcoin after the trade was completed or closed,” explains Localbitcoins.

History[edit]

Getting started on LocalBitcoins - setting up wallet and account

LocalBitcoins was founded in June 2012 by Jeremias Kangas. He implemented an escrow system for the marketplace by the end of 2012. The website started generating revenue by early 2013.[3]

In April 2014, the company announced that it would begin mass-producing low-cost bitcoin ATMs. In the same month, LocalBitcoins suffered from a security breach, when 30 bitcoins (then worth US$15k) were stolen from its users.

In December 2014, the Federal Financial Supervisory Authority of Germany contacted LocalBitcoins about licensing issues, and LocalBitcoins ceased to operate in Germany. LocalBitcoins said that it had about 8000 people actively using the service from Germany at the time.

In February 2014, two men from Florida were charged with violating state money laundering laws for using LocalBitcoins. In April 2016, another two men from Louisiana, United States, a former chiropractor and his son, pleaded guilty to funneling money through an unlawful Bitcoin financial scheme. The men were using LocalBitcoins to advertise their services.[4]

In August 2015, LocalBitcoins ceased to operate in New York state because sellers would have to purchase a BitLicense from the New York State Department of Financial Services to remain in compliance with local financial regulations.

In August 2016, LocalBitcoins said that 1.35 million people from 249 countries were using its platform, and that the weekly volume of transactions was US$14 million.

In September 2016, access from Russia to LocalBitcoins was blocked by Roskomnadzor, the executive agency for telecommunications in Russia, after the finance ministry proposed criminalising the use of bitcoin. LocalBitcoins posted instructions for users on how to bypass the access restrictions.[5]

In September 2017, LocalBitcoins announced that it will be compensating the users for their 'Bcash Holdings" and also stated that it wouldn't be supporting users who were held with bitcoin balances at the time of the fork.

On 7 December 2017, new user registration was briefly paused, as the site experienced record traffic.

Solution overview[edit]

The website offers a service to facilitate the locating of other Bitcoin users can meet others for person to person trading of bitcoin. The site is suggested for casual traders seeking more privacy. The site uses an escrow system and the transfer of bitcoin is made after funds are received in the sellers account.

External Links[edit]

See Also on BitcoinWiki[edit]

References[edit]

  1. Why the Only Real Way to Buy Bitcoins Is on the Streets | Wired Enterprise
  2. Helsinki's LocalBitcoins Hits Up To €3 Million A Day In Exchanges
  3. Exclusive Interview With Founder of LocalBitcoins.com - Jeremias Kangas
  4. Arrests And Prosecutions Reveal Big Vagaries In Bitcoin Selling Regulations
  5. Russia's National Censor Blocks Access to LocalBitcoins. LocalBitcoins responded to the ban by instructing Russian users on how to bypass the censorship