LocalBitcoins is the Bread and Butter of Peer to Peer Bitcoin Networking, But Faces Challenges Too
When It Comes to Operating on LocalBitcoins, P2P Traders Find Themselves In “A Lion’s Den”
Localbitcoins has been a reliable source of purchasing cryptocurrency for users for quite a while, which is where the focus usually is. However, the experience of the traders does not often get much attention. In a recent news article from Bitcoin.com, the media outlet spoke with multiple traders to gauge their experience as well.
One trader from Australia, who has been in operation for “a few months” on the platform, wished to remain anonymous but expressed that their company required about 40 hours of work a week. The company had to use pooled savings to start up, and all individuals are still required to hold work outside of trading to meet their financial needs. Though the company, which has two other traders, offers trades through their own website, the majority of the trades involving their company occur through Localbitcoins.
The trader expressed that the beginning experienced that the trader had resulted in the loss of “a lot of money to scammers,” though they blame it on their own over-trusting of users. They added that malicious actors have caused the trader’s bank accounts to be frozen multiple times, which resulted in multiple scams.
Realistically, the trader sees Localbitcoins as “a lion’s den” and that anyone who wants to jump on the platform should first “get god trading.” Considering how prominent the criminal presence of Localbitcoins is, the trader hopes that it will soon be “controlled” during the launch of anti-money laundering/counter-terrorism financing policies. He added that a major challenge is “bank hostility” for Localbitcoins traders.
Bitcoin Babe’s MJ has already been on the Localbitcoins platform for about five years as a one-woman operation for 105 hours a week. There are both face-to-face and online trades available, and MJ has made a point to take multiple security precautious when trading as the latter. These trades often take place in public areas with significant security, like banks. She has also spoken with friends and family to make sure that they are aware of where she is and how long she will be there, in the event that anything happens.
Even though MJ also performs trades on private websites and other P2P websites, Localbitcoins is the platform used for the majority of their transactions. In fact, MJ believes that at least 95% of the trades happen on their platform. Still, MJ says that the benefits of using Localbitcoins “has been drying up lately,” and that the ultimate goal is to get away from P2P platforms entirely.
The regulatory climate in Australia for cryptocurrencies is hardly friendly or organized. MJ says that the Australian Transaction Reports and Analysis Centre (AUSTRAC)
“really rushed into things without a proper assessment of the market and community.”
As MJ sees it, the framework is more about trying to get a small policy to fit a broad range of concerns in bitcoin and cryptocurrency exchanges. As a result, there are multiple traders and small businesses that are leaving the whole crypto industry behind, due to the “cost of regulation.” Furthermore, MJ said that the lack of “punishment or repercussion” for tradition while unregistered simply allows these traders to continue their bad actions.