KYC

How to Anonymously Buy Bitcoin Online and in Person

24/02/2020 by Idelto Editor

Buying bitcoin is a bit like buying contraception: it’s a basic human right, you should be entitled to do so privately, and it’s nobody’s business what you plan to do with it. Whether you’re buying bitcoin to set aside for a rainy day or to expend immediately in a fit of passion, you shouldn’t have to broadcast your intentions to the world. Here’s how to obtain bitcoin without forsaking your anonymity.

Also read: How to Buy Bitcoin Anonymously

Mine, Earn, Exchange or Buy?

In 2020, you have four ways of acquiring bitcoin: mining, earning, exchanging, or buying. While anyone can mine bitcoin, only those with the dedicated racks of hardware can do so profitably. Thus, despite the lure of newly minted coins with no transactional history, mining is not a realistic way of obtaining bitcoin. Earning, typically through working for a crypto company, provides a more practical means of obtaining bitcoin, but isn’t remotely anonymous since your employer will have all your pertinent details, and may be obliged to pass these on to government agencies. Exchanging – that is, swapping goods or services for bitcoin – is a more practical way to get your hands on cryptocurrency.

You could set up your own bitcoin-only store, allowing you to sell physical and digital goods in exchange for crypto. With no fiat payment rails connected, you can run the website and accrue bitcoin without disclosing your identity. Naturally, you’ll need to have something that people desire sufficiently to part with their beloved bitcoin; think high quality merchandise, tasteful art, bespoke bitcoin jewelry, or genesis block-inspired posters. Of course you don’t have to set up your own website to sell goods for bitcoin; there are already dozens of online stores where you can become a vendor with no questions asked. Welcome to the darknet.

Despite what mainstream media would have you believe, not everything for sale on darknet marketplaces (DNMs) is illegal. Thus, you don’t need to break any laws in your quest to swap goods for bitcoin. In addition to legal paraphernalia of the sort found in head shops, DNM vendors sell medicinal items such as CBD oil. In truth, you can sell anything you can think of on the darknet; the only limits are your imagination and market demand. While selling on DNMs is one of the most anonymous ways to obtain bitcoin, it’s not the quickest or most practical. If you’re looking to acquire bitcoin in a hurry – be it to place a DNM order of your own or because the price of BTC is shooting up – you’ll need to buy it directly. Thankfully, there are still ways to purchase bitcoin anonymously, or at least privately i.e. without needing to undergo KYC, with the complete loss of privacy and risk of identity theft this carries.

How to Buy Bitcoin Anonymously in Person

There are two primary ways to buy bitcoin in person – that is, by leaving the house. One is to purchase bitcoin using a BATM – an automated machine that will let you swap fiat currency for cryptocurrency. Finding a bitcoin ATM near you is easy, and as a previous guide from news.Bitcoin.com explains, there are ways to purchase crypto from BATMs completely anonymously, if you don’t mind bending a few rules. Even if you’re a stickler for playing by the book, a BATM is typically more discreet than using a centralized exchange to acquire crypto.

The second option is to find a bitcoin seller willing to meet you in person for a cash deal. Filter search results on Localcryptos, Localbitcoins, or local.Bitcoin.com by area, and then message sellers to see if they’re willing to meet. Regardless of what the platforms’ terms of service say (LBC doesn’t permit in-person meets any more), many sellers will be happy to arrange a cash deal. Naturally, you’ll need to establish trust on both sides, and it makes sense to start with a relatively small purchase before building up to larger amounts as trust develops. Another way to sniff out local sellers is to attend bitcoin meet-ups in your area and crypto conferences. Also search on Linkedin for OTC sellers in your region. There’ll be some chancers and time-wasters to sift through, but once you find a reputable seller, you’ll have your own private supply of bitcoin on tap.

How to Buy Bitcoin Anonymously Online

If you’re looking to anonymously buy bitcoin without leaving the house, your best bet is to use a P2P exchange such as Localcryptos or local.Bitcoin.com. There’s a range of payment options available, from bank transfer to gift cards and Paypal, and your details will only be disclosed to the seller. If you’re keen to conceal your identity from the seller altogether, it’s conceivable to send funds from an account you control that’s not in your name; a Paypal business account for “Acme Trading” for instance, or a Venmo account that a kindly friend will allow you to use. For a rundown of the main P2P bitcoin exchanges, see this guide from news.Bitcoin.com.

Finally, there are rumors of individuals paying third parties – homeless; the unemployed; students – to complete KYC on their behalf, and then using their identities to obtain crypto debit cards. If such apocryphal tales are true, they would provide a means of purchasing cryptocurrency that cannot be traced back to its actual buyer. There are also rumors of readymade identities being bought on the darknet, and used in the same manner to anonymously buy bitcoin.

Bitcoin is protection – yes, contraception – against the unexpected. It is a safeguard against account seizure, a protection against black swan events, and a hedge during economic uncertainty. You owe it to your present self to acquire bitcoin and you owe it to your future self to do so as privately as possible. Your bitcoin is nobody else’s business. Don’t let anyone tell you otherwise.

What other private bitcoin buying methods can you think of? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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Currency.com Accused of Exploiting KYC to Withhold Customer Funds

18/02/2020 by Idelto Editor

Know Your Customer (KYC) and Know Your Transaction (KYT) are ostensibly deployed by exchanges to combat money laundering. In practice, these provisions are used as an excuse to surveil, cajole, and threaten customers, who risk losing funds if they are unable to meet the impossibly high burden of proof. An investigation by news.Bitcoin.com suggests that tokenized securities exchange Currency.com is complicit in such behavior.

Also read: 50 Cent, Talib Kweli, Snoop Dogg and Nas: Celebrities Who Could Be Bitcoin Millionaires

Locked, Stocks, and Two Smoking Barrels

“My funds are stuck on Currency.com. They say I need to prove origin of funds and are refusing to release them. Can u investigate?” So read the anguished Telegram message I received from a cryptocurrency trader last month. News.Bitcoin.com does not have a mandate to investigate hard luck stories; we are a news organization, after all, not customer support. However, I had a connection of sorts with Currency.com, having previewed the crypto-powered stock exchange in January last year and interviewed its CEO Ivan Gowan.

Knowing that KYC/KYT abuses are on the rise, and already possessing a Currency.com account, I decided to try and replicate the trader’s fate. What I found raises serious questions about the integrity of Currency.com and the entire ‘surveillance exchange’ industry upon which KYC is founded. Unable to meet the unreasonable demands arbitrarily thrust upon them, traders are being locked out of exchanges that have unblinkingly accepted their funds only to refuse to return them.

Know Your Transaction is the KYC of blockchain, a policy which places the onus on customers to prove their funds are clean. This is of course an impossibility, any more than a shopper can prove the cleanliness of the dollar bills in their wallet. As the February 17 Marty’s Bent newsletter noted, “in a world in which KYC/AML compliance is forced on everyone, individuals are presumed guilty until proven innocent.” As the following experience with Currency.com shows, surveillance exchanges will stop at nothing to seize their customers’ funds.

Currency.com Demands Proof of ‘Origin of Funds’

Following up on my Telegram contact’s tip-off, I deposited funds onto Currency.com on February 4. I wanted the sum to be high enough to trigger their compliance checks, but without losing all my crypto if the allegations proved true. In the event, I got my funds back – but not after more than a dozen withdrawal attempts, 20 customer support messages, and the submission of extremely personal information.

After depositing $1,500 of BCH onto Currency.com, I made a couple of trades just like a regular trader would. My account was in full working order, having completed KYC in January 2019, and while using the platform I received no alerts to the effect that my account wasn’t in order. Then, on February 13, I made a withdrawal request in BTC for my full balance, which remained around $1,500. A few minutes later, I received the following email message:

No explanation – just a straight out denial of funds. I’ve used cryptocurrency exchanges – including some extremely dubious trading venues – for eight years, and have never been denied funds with no explanation. I tried withdrawing to a different BTC address, in case Currency.com couldn’t handle bech32, but again received the same message. With no clue as to what could be wrong, I opened a customer support ticket, and that’s when things got really weird. According to Currency.com staffer M, “Your proof of funds has expired.”

What Is Proof of Funds?

The customer support response (edited to fix English) continued:

“In order for your trading account to operate properly in future, we kindly ask you to provide us with the documents that confirm the origin of funds you used for transaction conduction within your account on Currency.com.

As a confirmation of the origin of the funds you can provide:

– documents for inheritance;

– documents confirming the sale of real estate and crediting the proceeds to the account;

– a document confirming the fact of purchase of shares, bonds, securities;

– the contract under which money was received for the performance of certain services;

– contract for obtaining royalties;

– lease agreement (for receiving the rent);

– the contract under which the debt is returned;

– decision / protocol on dividend payment;

– bank statement, registration in the prescribed manner;

– deed of gift and etc.”

I don’t know about you, but I’ve never purchased cryptocurrency using my inheritance. Noting that the message had requested proof of funds for my “trading account to operate properly in future,” I thought I may have spotted a loophole. “You didn’t have any trouble accepting my funds two weeks ago without asking any awkward questions,” I responded. “So I’m sure you won’t have any trouble releasing them. Kindly do so immediately. I’ll be able to provide additional documents in future should I have cause to use Currency.com again.”

Currency.com were not to be bowed, however, even when I pointed out to M that it was she who had set up my interview with the company’s CEO a year ago. Even though my funds had been lawfully obtained, I had no way of proving as such – no one does – so to show Know Your Transaction for the farce that it is, I submitted a bank statement displaying a transaction that looked like it might pass as a cryptocurrency purchase.

My “proof” was accepted without question, but still my funds remained locked up. Currency.com were clinging onto that $1,500 for dear life.

Currency.com Moves the Goalposts

While I awaited the release of funds, I submitted a series of questions to Currency.com for a proposed news.Bitcoin.com article on the matter. Upon quizzing them on their KYC/KYT policy, I was told: “We reserve the right to verify your compliance … at any time within your use of the service, in particular by the following means: (a) requesting a documentary confirmation of the source of origin of funds, the title of property to them as well as the rights to external accounts.”

I asked: “How are customers meant to prove the source of their funds using, as per the suggested list, “documents for inheritance, documents confirming the sale of real estate and crediting the proceeds to the account” etc, when in many cases it is impossible to prove the source of cryptocurrency, especially when it has been earned or gifted?” Currency.com replied:

When the client’s funds were obtained as a gift, the client can provide us with their withdrawal/deposit history in order to prove the origin of funds, and if the funds were earned, the client can provide us with their trade history (for example from different platforms).

My trade history on other platforms is none of Currency.com’s business, and even if provided would prove nothing about how I originally obtained my funds. Currency.com also sent me a wall of text from their terms and conditions that boils down to “if our onchain analysis software flags any of your transactions as suspicious, we can hold onto your funds and there is nothing you can do about it.” For the record, the deposit I made into the exchange did not come from a mixer, and the withdrawal was into a new bitcoin address with no transactional history.

At this stage in proceedings, Currency.com performed a sudden volte-face and issued the following proclamation:

All this time they were locking me out for not providing proof of funds, and it turns out it was proof of address they needed all along. It’s a simple mistake that anyone could make, and then drive home over the course of half a dozen messages.

Proof of Address Is Not Enough

I had provided proof of address 13 months earlier upon signing up for Currency.com. As anyone who has used a centralized service, be it a bank or an exchange, knows, it is not a requirement to prove one’s address on an annual basis. Nevertheless, Currency.com were determined, and I was determined to see how many hoops I would have to jump through to appease them. I submitted the following document, with my bank details and address clearly shown, and only my account balance blacked out because my net worth is no one’s goddamn business. I was wrong.

“Unfortunately, this document is not suitable, because on the previous screenshot you’ve used some graphics editing,” I was informed. “We kindly ask you to provide us with a different document without using graphics and photo editors.” This request made me uneasy. I had no desire to disclose my bank balance to a Belarusian customer service operative, who already had all my personal documents, which could hypothetically be acquired by Eastern European identity thieves.

Mildly frustrated at this juncture, I replied: “You’re quite right. The document has been blatantly edited to conceal my account balance: it’s common practice for people to do so when submitting verification documents, because it avoids the need to broadcast their net worth to the world, preventing them from becoming a target. However, in the interests of full transparency and getting my funds back, here is the same statement with balance intact,” adding:

If there’s anything else you’d like to know – mother’s maiden name; account passwords; balance of all bitcoin wallets; seed phrases – please let me know and I’ll do my utmost to comply.

And at that, my funds were finally released. While there is nothing to suggest that Currency.com were seeking to steal them, or those of the trader who suffered the same fate, the experience was unsettling. “These [KYC] laws are in place to control the little man,” ranted Marty in his Feb 17 newsletter. “Forced to send their most intimate data to insecure databases that are highly prone to being hacked. We’re talking date of birth, home address, social security numbers, bank account information, pictures of passports and driver’s licenses. All sent to be hacked and sold on the Dark Net to people looking to commit identity fraud. Or worse, find someone they want to harm.”

Marty signs off with a warning shot to the Currency.coms and their blockchain analysis cronies: “Those who build companies to de-anonymize bitcoiners to appease a corrupt, overarching and dying system should be publicly shamed. They are middlemen out to make a profit, they are enemies of freedom in the Digital Age, and they are most certainly enemies of Bitcoin.”

Do you think some exchanges enforce excessive KYC? If so, why? Let us know in the comments section below.

Images courtesy of Shutterstock.

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You Can Privately Cash out Bitcoin on These P2P Exchanges – for a Premium

11/02/2020 by Idelto Editor

Using P2P exchanges to cash out bitcoin provides privacy, but it comes with a premium – a price premium, to be precise. Whether you’re buying or selling crypto on these semi-decentralized platforms, be prepared to take a hit on the market price. If you’re planning to sell bitcoin on the leading peer-to-peer platforms, here’s what you can expect to receive below the spot price.

Also read: How Often Are Top Privacy Coins and Mixers Actually Used? – A Look at XMR, DASH, and ZEC

Privacy But at What Price?

On centralized cryptocurrency exchanges, the spot price for digital assets is set by thousands of traders simultaneously executing buy and sell orders. On P2P exchanges, those numbers run into the dozens at best, and single figures in some cases. With each buyer adding their own fee to ensure the trade is profitable, you can expect to receive anywhere from 1-15% below market price. To determine the typical premium commanded by P2P exchanges, news.Bitcoin.com checked the best price offered for payment by bank transfer on six platforms: Bisq, Hodlhodl, Localbitcoins, Localcryptos, Agoradesk, and local.Bitcoin.com. Here’s how they stacked up.

Bisq

Bisq is an open source application for buying and selling BTC and other cryptocurrencies. Using it requires installing the Bisq desktop client and connecting to Tor. The additional steps required to trade on Bisq account for its limited usage; the platform averages just 2-3 trades a day.

Bisq users start off with a trading limit of 0.01 BTC but this can be raised once another trusted peer has signed your account. In practice, this means you’ll encounter lots of small sell orders on the site. If you’re looking to liquidate large amounts of BTC, Bisq really isn’t the place. When visiting Bisq, news.Bitcoin.com was able to sell BTC at an average of 7% under spot price, but the order size was limited to 0.08 BTC and required two trades.

Agora Desk

Agora Desk is a P2P exchange for BTC and XMR with a mediocre reputation. The complaints it fields appear to be mostly targeted at the price premium, rather than due to any intrinsic flaws in the site. Available on the clearnet and darknet, Agora will let you cash out quickly and easily, but expect to receive 10% under spot for your coins.

Localcryptos

Localcryptos, recently reviewed by news.Bitcoin.com, is the daddy of P2P exchanges when it comes to liquidity, with $126K of crypto shifted in the last 24 hours. On Localcryptos, you can sell BTC or ETH at just 4% under spot price.

Localbitcoins

Localbitcoins.com (LBC) doesn’t really belong on this list since it introduced KYC, which defeats the entire point of cashing out P2P. Nevertheless, it is still a P2P exchange, and a dominant one at that. In testing, it was possible to cash out BTC at just 0.5% under spot for orders over $750, and 1.5% under for smaller sales. There’s a lot to fault with LBC, but you can’t fault that tight spread.

Hodlhodl

Hodlhodl’s best achievement is orchestrating the Baltic Honeybadger conference, though it also serves as a reasonable P2P exchange. The best offer available on the site is 3% under market price, which isn’t bad at all.

Local.Bitcoin.com

Local.Bitcoin.com is a BCH-only P2P exchange. When filtering for U.K. buyers, offers start at just 0.5% below the spot price for bitcoin cash. For the U.S., however, it’s a different picture, with the best offer for bank transfer coming in at 6% below spot, and limited to $200 of BCH. When other payment methods are selected, though, it’s possible to sell large amounts of BCH in the U.S. via Cashapp or Skrill for just 3% below spot.

And the Winner Is…

If you’re using a P2P exchange to cash out crypto to cover everyday expenses, you’re already a winner. However, if you’re seeking a P2P platform solely on price, your best option is Hodlhodl at 3% under or Localcryptos at 4% under. (LBC technically provides a better price, but the KYC hit means it isn’t worth it.)

In third place is local.Bitcoin.com (-0.5-6%), followed by Bisq (-7%) and Agora (-10%). For some bitcoiners, however, the additional privacy provided by the latter two markets may justify the price premium. And remember, if you don’t like the price being quoted, there’s nothing to stop you from creating your own ad on a P2P exchange, naming your price, and waiting for the buyers to come to you.

What P2P exchanges do you recommend? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

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There’s No Such Thing as Tainted Bitcoins

06/02/2020 by Idelto Editor

All bitcoins are created equal. But in the eyes of blockchain forensics firms, some bitcoins are more equal than others. If these companies are to be believed, coins that have been used in criminal transactions are ‘tainted,’ destined to be forever linked with nefarious activity. The reality, however, is far different, for ‘taint’ is solely in the eyes of the beholder – and most beholders aren’t Chainalysis.

Also read: Chainalysis Report Sheds Light on Darknet Markets and the Need for Onchain Privacy

Tainted Coins Are All in Your Mind

It’s long been known that freshly minted bitcoins can command a premium because there is no transactional history attached to them. If you want true onchain anonymity, mine some coins and then lock them away. The fewer times those coins turn over onchain, the fewer clues there are pointing to their current owner. The notion that coins might acquire taint, however, that makes them undesirable – or potentially even unlawful – to receive is a wholly subjective phenomenon. It’s one thing to flag a particular wallet address as being associated with phishing or hacking, as many block explorers do, but quite another to flag assets that pass through such wallets as being indelibly associated with criminality.

Should cash be permanently marked if it has EVER passed through a criminal’s hands?

This is happening to thousands of cryptocurrency users. @Chainalysis KYT flags a Bitcoin deposit as suspicious, provides no evidence or appeal, then the exchange steals the funds.

— dark.fail (@DarkDotFail) January 29, 2020

Just as offense to a risqué tweet is taken not given, the same is true of ‘taint’ when applied to coins. It is an interpretation rather than an inherent characteristic. Despite this, blockchain forensics firms and their surveillance partners are desperate to advance a narrative that certain UTXOs are sullied through their past association with illicit deeds. By the same reasoning, that $20 bill in your wallet is tainted because three transactions ago, it was robbed from a 7/11.

Wtf?? Apparently you are not allowed to do what you want with your bitcoin once you own the keys. Fortunately that’s not how Bitcoin works, but the level of chain analysis here is alarming. What is a correct response? @MartyBent @matt_odell @vandrewattycpa pic.twitter.com/BhMDThLHGc

— Ronald McHodled (@RonaldMcHodled) January 28, 2020

Blockchain forensics software can map the number of ‘hops’ a transaction is removed from one suspected of being criminal, such as an exchange hack. Proving that those coins are still in the hacker’s control, and haven’t been sold to an innocent third party, however, is virtually impossible.

Ain’t No Taint in These Coins

As the site 6102bitcoin.com notes, a tainted coin “is only such because the address of the scammer is known to the analyst. Suppose that the analyst doesn’t know this vital piece of information, would the coin still be tainted? It should be clear that the degree to which coins can be classified as tainted depends on the level of information available to the person doing the classifying.”

Despite the fact that bitcoin cannot be intrinsically tainted, that hasn’t prevented KYC-kissing companies from discriminating on those grounds. As a result, bitcoiners using these firms are unable to send and receive coins through mixers with impunity. For so long as cryptocurrency gatekeepers flag coins as pure or dirty, users will be forced to jump through hoops in order to appease them.

One of the great ironies about the taint game is that to clean one’s coins involves passing them through a mixer, only to be discovered having used one is to risk having your funds frozen by centralized exchanges. Because there is no practical way for bitcoiners to verify how coins that come into their possession were used in the past, they are powerless to contest forensics software that decrees their UTXOs to be ‘dirty.’

In Dr Seuss’s “The Sneetches,” half of the creatures on an island have a green star on their bellies that marks them out as privileged. Then an entrepreneur named Sylvester McMonkey McBean shows up with a machine that can add and remove stars at will. Pretty soon, the islanders can’t tell who had stars to begin with and who didn’t.

Even for bitcoiners who don’t use centralized services, increasing the fungibility of one’s coins is desirable. If everyone routinely used mixing services such as Coinjoin and Cashshuffle, blockchain forensics firms would lose the ability to flag all such transactions as suspicious. The more coins that pass through mixing machines, the harder it will be for anyone to discriminate.

Do you think ‘taint’ is a genuine classification that can be applied to bitcoins? Let us know in the comments section below.

Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

Images courtesy of Shutterstock.

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Localcryptos Lets You Cash Out BTC P2P – Minus the KYC

28/01/2020 by Idelto Editor

Localcryptos Allows You to Cash Out BTC P2P – Minus the KYC

If you’ve ever had a sudden need for fiat while all in crypto, you’ll understand the difficulty of cashing out without KYC-ing away your identity and that of your unborn children. Localbitcoins is now an AML hellhole, Bisq is great if you’re happy to wait two days for a trade, which leaves what exactly? Localcryptos.com. That’s what.

Also read: A Bitcoin War Is Brewing Over KYC

What’s the Deal With Localcryptos?

Before its rebrand, Localcryptos (LC) went by the name of Localethereum. Launched in Australia in 2017, the platform’s addition of BTC support in late 2019 made a name change inevitable. Just as Localbitcoins.com (LBC) was raising its shutters, ejecting traders who’d been with it for six years through draconian KYC, Localcryptos swung open its doors and welcomed in the misfits whose only ‘crime’ was to desire to swap magical internet money for filthy fiat in privacy. LC haven’t minced their words in describing their main competitor, LBC, as “centralized, custodial and a far cry from private.”

Localcryptos Lets You Cash Out BTC P2P – Minus the KYC — Stats displayed on localcryptos.com on January 27, 2020.

The Finland-based LBC, to be fair, didn’t want to KYC all their customers away to Localcryptos; blame EU regulators and the jackboot stomp of AML legislation that crushes all who stand in its path. Still, when you can’t even make it past the login screen of Localbitcoins to export your trading reputation into Localcryptos due to KYC notices that literally stop you in your tracks, there’s something very wrong. KYC is a cancer on society and the world would be a better place without it.

But the purpose of this article isn’t to bitch about KYC – there are plenty of other news.Bitcoin.com articles that do that. Rather, it’s to review Localcryptos.com from the perspective of a cryptocurrency user wanting to swap BTC for fiat. I used the site a couple of times this month to cash out, and found LC to be better than LBC in virtually every way, from the clean user dashboard to the escrow and reputation system. As a 2013 OG of LBC, switching my affiliation didn’t come easy. But after a couple of effortless trades on Localcryptos, I was sold. Bisq is great for selling XMR, and local.Bitcoin.com for BCH. But for BTC and ETH, Localcryptos has got it locked down.

A Bitcoin Beginner Makes Their First Trade

If you found your way around Localbitcoins okay, you’ll moonwalk through LC. To make sure, though, I enlisted the help of a friend who we’ll call Patrick. Patrick is new to crypto, and until this review was commissioned, had never sent a bitcoin transaction in his life. I instructed him to send some BTC from his Wirex account to Localcryptos and record his experience of losing his bitcoin virginity, adding “If there’s anything you’re unsure of while doing it, ask, but try and figure out as much of it as possible yourself.” Here’s what he had to say:

“Pretty simple process, really. After creating an account, confirming my email and sending some BTC from Wirex to my Localcryptos wallet, I was good to go. I hit the “Sell Bitcoin” button on the homepage, chose my preferred payment method (bank transfer), location (UK) and currency (GBP), then got a list of sellers along with the number of trades they had performed and the rate they were buying at. I chose a user with 3,000+ trades and 100% positive feedback and initiated the trade. Now, I had to fund the escrow account and send the trader my bank details, using an encrypted chat.”

“It took about 25 minutes for the funds to reach the escrow, then the seller advised that he was transferring the agreed amount to my bank. After quickly logging into my banking app and verifying that the GBP was there, I hit ‘Release Escrow’ and that was it.”

Cash Out Your Coins, Keep Your Privacy

Patrick’s experience of using LC sounds effortless. But in the interests of full disclosure, I should note that he did reach out to me during the process for some guidance. In fact, he sent me a dozen questions over Telegram, adding “sorry for the bombardment of questions, it’s just not obvious and I wanna do it right.”

In the event, Patrick did everything right, and successfully completed his first crypto-fiat swap with minimal intervention on my part. Most of the areas where he was uncertain pertained to Bitcoin’s architecture, rather than UX failings on behalf of LC. That said, Localcryptos could still do more to help beginners out here. The first time you send bitcoin, in this case to a Localcryptos wallet, it’s not clear that the transaction requires additional blockchain confirmations before the funds can be moved into an escrow account and sold.

That was Patrick’s main sticking point; a 25-minute wait for BTC to confirm, with no information as to why his funds were unmoveable. My main complaint with Localcryptos is that there’s no ability to select your entire wallet balance at the push of a button. As a result, it’s common to set up a trade, realize you’re a few satoshis or vitaliks short of the total amount, and be forced to cancel the deal or send additional funds from an external wallet. This minor gripe aside, Localcryptos gets a thumbs up from me – and a nod from Patrick who’s now leveled up his crypto knowledge and found a convenient way to cash out when he’s strapped for fiat.

Localcryptos is light on regulations, letting you cash out without enduring laborious and invasive KYC – at least for now. What’s more, the platform utilizes noncustodial escrow, favoring smart contracts for ETH transactions and P2WSH for bitcoin. At no point are your funds custodied sitting on a centralized server. As with bitcoin P2P platform Bisq, and bitcoin cash marketplace local.Bitcoin.com, users retain their private keys, immunizing them from the fallout resulting from a hack or security breach. P2P exchanges that let you keep your privacy while selling your coins are a luxury in today’s surveillance society. Use them while you still can.

What’s your favorite non-privacy-invasive way to convert coins to fiat? Let us know in the comments section below.

Images courtesy of Shutterstock.

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