Looking for a bitcoin cash exchange where you don’t have to worry about the Man getting all up in your business? Local Bitcoin (localbitcoin.com) may be right up your alley!
What is Local Bitcoin?
Local Bitcoin, (that’s how they stylize it, with a capital “B”) is a peer-to-peer site where you can find other BCH users who are interested in trading BCH for local currencies via a blind escrow smart contract. Note, that ‘BCH’ is the symbol for bitcoin cash, not bitcoin.
Now, something to keep in mind, is that bitcoin and bitcoin cash are two related, but different things. The differences between the two go beyond the scope of this review, but if you would like to learn more, just click on this link. But let’s move on!
With Local Bitcoin, they completely skip the KYC process of forcing you to prove your identity before you use their services.
Is Local Bitcoin Anything Like LocalBitcoins?
While the biggest difference is that LB only deal with bitcoin cash, (see above), there are some other differences as well that one may or may not notice. Check out this table taken directly from their site.
Are There Any Fees?
Along with that table we can also see from the bottom exactly what their fees are. It’s a little small and hard to read so we’ll talk about it. They charge the person that wants to buy BCH 0.75% and the person that wants to sell BCH 0.25%. That’s really not shabby at all whether you’re buying or selling compared to many other exchange sites.
How Do You Buy BCH at Local Bitcoin?
Very simple here. Once creating your account, you would simply click on the “Browse” tab at the top of your page and you would be taken to a page with some options at the top, nice and clear for your needs. We’ve got tabs to sort by –
- Buy or Sell
- Deposit Method
- Popularity or Price
When sorting by Deposit Method, you will be shown all sellers that are willing to trade for a particular method. We would list them all here, but there’s actually quite a few options for you to choose from. 34 in fact as this is being typed. Among the most popular choices are
- Bank Transfer
- Cash (by mail or in person)
and so many others. (When buying large amounts of bitcoin cash, we do not recommend meeting some stranger in person or sending cash in the mail, but that’s your decision!)
Once sorting these menus to your liking you would just click on the box to the right where you are taken to a page with some more useful information for you. Check out the following image and we’ll talk about what that information might be.
- This is the trade amount where you would enter in the amount of BCH you’re looking to buy.
- Sometimes this box will not be here. When looking at the previous page, you can see how many trades this seller has made in the past. In this case, this isn’t a bad message despite the red color. They’re just letting you know that user is new, that’s all.
- This box also doesn’t show up all the time, just when a user may not be available right away and you may have to wait a bit to get a response from the user.
- After entering the amount you would like to buy you would click this button at which time communication is opened between the 2 users.
- The Terms of Trade – Always pay close attention to this one if applicable. This is where the buyer could potentially put whatever terms they want you to follow for a trade, for example, “will trade for gift cards, but only from the following stores…” or something of the sort.
How to Sell at Local Bitcoin
This will work out pretty much the same as the buying part as seen above, the only difference is that you will choose “Sell BCH” on the browse page.
Now, in the name of honesty, this author has a little BCH but isn’t looking to sell it, so I haven’t tried this out, but it all looks pretty straight forward.
How to Withdraw Your BCH
Just take a look at the top of any page on the site and you’ll see the “Wallet” tab. Clicking that takes you right on over to exactly what you would think it would.
You would be given the address to ship your BCH over to whatever software wallet or external hardware wallet you use and there you go!
What Countries Are Allowed at Local Bitcoin?
To be honest, there probably is a list somewhere of countries that just aren’t allowed for whatever stupid reason. However, if there is one written down anywhere, we cannot find it. This is not ideal, but go and try to use them. If you cannot get in, well, you may fall under one of those!
How’s the Security?
This is what most people need to know –
“There are a number of precautions taken by Local Bitcoin developers when designing the platform. Here are the most important ways you are protected:”
- End-to-end message encryption
- Messaging forward secrecy
- Financial forward secrecy
- Signature system
Now, if you’d like to know a more, technical explanation, there is a pretty good read available on their site under the FAQ’s section, but be forewarned, it is a little on the long side!
What Exactly is a “Blind Escrow”?
Despite the autonomy of the term, blind escrow is a good thing and here’s exactly how that works.
When someone puts BCH in escrow that they want to sell, they are creating an on-chain Bitcoin Cash transaction. The transaction contains two relevant outputs:
- Escrow output – This output can be spent by either the buyer or seller.
- Fee output – This is the fee portion of the trade. If the trade is unsuccessful, the fee can be reclaimed by the seller; if the trade is successful, the fee will be swept by Local Bitcoin.
Both outputs are P2SH addresses generated from Script templates developed by Local Bitcoin. For those that are truly technical minded, both of these scripts are available for you to take a look at if you really want to over on the LB site.
Awesome. What does that mean?
To “dumb-it-down” as much as we can for the non-tech folks, that essentially means this –
Dave wants to sell some bitcoin cash. By putting the amount he would like to sell in escrow, he is essentially putting it back onto the chain where he can’t touch it. A script then breaks this into 2 pieces. One piece is then put up for the buyers to take a look at and decide if they would like to buy it. The other is the fee charged by LB. This is how they make their money.
Both pieces of the bitcoin cash are now “locked” by script for a lack of a better term.
Now Lisa comes along and wants to buy some bitcoin cash. She agrees on the price listed and goes to the purchase page and does so. Only now is a script written that “unlocks” one of the 2 pieces of BCH, but only on her end. Lisa gets her BCH, Dave gets his money. Now the second piece is unlocked, that’s the fee for LB. Everyone wins!
Pros & Cons
Types of Verification
When creating an account, you will be asked to verify an email address. That’s it!