Step-by-Step Guide to Buying BCH on Local Bitcoin Cash
When it comes to buying cryptocurrencies for fiat, many people will turn to a centralised exchange.
However, there are many problems that traders have with this option, chief amoung them is privacy. When you buy coins on a centralised exchange, you are required to identify yourself. This means that all of your trading activity is monitored and tracked.
Some of the most successful alternatives to this have been decentralised local trading solutions such as Local Bitcoins and Bitquick. We have seen a surge in activity on these platforms as traders have seen the benefits of anonymous trading.
Now there is an alternative that is available for Bitcoin Cash buyers. This is Local Bitcoin Cash and in this step-by-step guide we will go over a local BCH purchase as well as give you a short review of the exchange.
Let's jump in.
What is LocalBitcoinCash?
Local Bitcoin Cash is a crypto currency exchange platform designed for people to trade Bitcoin Cash (BCH) with others in their local area.
Users trade by primarily meeting up in person while there are also options for wires and escrow. Different locations and prices are listed for you to select which users to trade with, and the entire process is peer to peer.
The platform was launched on October 13th 2017 and aimed to follow in the footsteps of other successful local exchanges such as Local Bitcoin and Local Monero.
Not much information is provided about the founding team, but the sites structure resembles other local exchange platforms. This is no coincidence.
In the first release of Local Bitcoin Cash, a reddit user by the name of MobTwo posted in the Bitcoin Cash subreddit explaining that they tried to collaberate with Local Bitcoins. They decided to build this site out of frustration from the Local Bitcoins team not responding to their requests.
Guide to Buying BCH
For those of you who have bought cryptocurrency on a local trading platform before, the steps required are almost exactly the same. For those who are still new, below is a step-by-step guide to buying with Local Bitcoin Cash.
Create an account by entering an email and password, the site will then send you an email verification link.
Once your email is verified, login to your account to begin trading.
To use the exchange, first thing you do after signing up is deposit crypto-currencies into your account by going to the ‘Deposit’ page on the left hand side bar menu.
Select the amount of BCH you wish to deposit, and then click the deposit button to receive a wallet key to transfer the funds to:
Once you have decided how much you would like to deposit, you will be presented with the Bitcoin cash address that you should sent the funds to. The moment that there are a sufficient amount of confirmations on the network, it will register your payment.
On the left hand side bar, click ‘Fiat Exchange’ if you would like to exchange fiat money for Bitcoin Cash.
Once you get on that page, scroll down to see the various listings of people around the world selling Bitcoin cash for USD.
The listing shows where each person is located, the amount of BCH they’re offering, and the USD price they’re offering per BCH.
You can also search for a listing on top of the page by entering in the following info
- Whether you want to buy or sell BCH
- The country, state and city you’re residing in
- Sort by ‘Price’, ‘Trade From’, or ‘Trade To’
If you are interested in getting more information about a particular listing, click the ‘view’ button to go to the View Listing page:
The view listing page shows you the sellers User ID, how long ago they were last active, the currencies they are trading from and to, the price, country, state, city and trade terms (this particular trader wants to meet in person to make the exchange).
To get more information about the trader, click on their User ID to go to their ‘View profile’ page:
Here you can see if they have a nickname, if their email or mobile number is verified, the total trades or work completed, earnings, when their account was created, and last time active. All of this information can help you make a judgment call on whether to buy from this person.
Completing the Trade
Once you have viewed the seller’s profile, go back to the ‘view listings’ page. If you find the price is acceptable, enter the amount you are interested in trading (the seller has set a max of 0.4 BCH) and simply click the ‘Trade’ button. The seller will be notified to confirm the exchange rates before proceeding to the next step.
You can also message the seller by clicking ‘message’ on the previous page, or ‘message seller’ on the ‘view’ page.
Once you have initiated the trade, you will be directed to a confirmation page with a message on top saying:
You have initiated a trade. Once the seller has confirmed the exchange rates, an email notification will be sent to you for the next step
From here, you simply have to wait for the seller to respond and confirm if they want to move forward with the transaction.
In this case (and the majority of cases viewed on the site), the seller wants to meet up, which means the trade will be done by handing over cash to the seller, while the sellers BCH will be transferred in person using the recipients public key from their crypto wallet.
In the case of an Escrow transaction, the Bitcoin cash is automatically held separately from the seller’s Local Bitcoin Cash Wallet. If the seller does not release the required Bitcoin cash after confirming that they have received a payment from the buyer, the support team can simply release it to the buyer from the escrow account. Online fiat money payments are done through bank transfer, since debit and credit cards are not accepted on the site due to risk of fraud.
Other Unique Features
Local Bitcoin Cash not only allows you to exchange dollars and other crypto currencies for BCH, you can also earn BCH by searching for and applying to various job postings where you get paid in BCH (so basically like a Craigslist marketplace in addition to an exchange).
Once you have found a job listing that looks appealing to you then you can click through to see the requirements and project spec.
You can view a variety of jobs and apply by simply naming your price and explaining why you’re suitable for the job.
Likewise, you can post jobs on the site that pay in BCH.
Benefits of Local Bitcoin Cash
There are a number of benefits that come with trading on local bitcoin cash.
Meeting Local BCH Traders
This is obviously one of the most self evident. Using Local Bitcoin Cash gives you the ability to meet up in person to execute an exchange. This allows BCH enthusiasts to meet fellow Bitcoin cash users in their local area. This is something that centralised exchanges can not facilitate.
Optional Transaction Fees & Escrow
There are also no transaction fees and the operators charge a small optional fee in order to fund the ongoing hosting of the site. There are also escrow transactions which mean that you can feel slightly more comfortable with the exchange for larger values.
These escrow transactions are instant as long as both parties have sufficient balance.
No Limits & Private Communication
As the exchange is not centralised, there are also no trading limits. You can trade as much as you want with your counterparty. If there are any errors in the transaction, then there is a refund wallet address in case.
If you wanted to communicate with the other party, then there is the direct messaging system. This is encrypted with advanced protocols to make sure that no third party can listen in on your conversation.
Customer Service & Language Support
There are open lines of communication through the Local Bitcoin Cash sub reddit. There is also a customer support option through the contact page of website.
What is also quite impressive is that the website has being made multilingual and there are a number of language options (including, Chinese, Hindi, Japanese and Korean).
While there are a number of benefits from local trading and local bitcoin cash, there are some concerns that we had.
While you may enjoy the benefits of local BCH trading, the legal status of using a Peer-to-Peer service such as Local Bitcoin cash is not clear. For example, in the USA there are restrictions on being an unlicensed money business. There have been a number of Bitcoin traders who have been charged for this.
There is also not too much transparency in the way of traders on the platform. There is no information that is given apart from nicknames and number of trades completed. This may be intimidating for users in an initial meeting.
Limited Instructions & Transparency
For the newer users, there are not that many instructions about how to complete the wire transfer or escrow. It would be more beneficial if the website administrators put this information in the FAQs.
There is also not that much transparency of the website administrators. While the admin would prefer to remain anonymous, it is more comforting from the perspective of the user to know that there are actual people behind the site.
However, when taking a look at their contact page we can see that they have given a location in Singapore as their address.
Given that the website was created out of necessity with lack of communication by Local Bitcoins, the user interface is still rather basic. Unless the Local Bitcoin Cash team is to start charging a fee on the transactions, it is unlikely that they much cosmetic work will be done on the site.
Is it Safe to Use?
Local Bitcoin Cash definitely has a way to go before it can become a more reliable source for trading BCH. However at the moment it solves the fundamental problem of getting access to more BCH in a localized, relatively efficient and cheap manner.
Despite options to trade using Escrow or Bank transfer, most sellers choose to meet in person, showing that the site still needs to gain the trust of people who are weary of making transactions online.
The site has been expecting to have a user ratings / trader reputation feature for a few months now, but it doesn’t seem like those features have been implemented. Having some sort of more comprehensive review score for traders might give users more comfort when it comes to making exchanges using Escrow or Bank transfers. I’m sure many would prefer this over meeting in person, if not for the security concerns.
As always, you have to exercise caution when meeting offline or trading online with strangers. It is even more so in this case since the main purpose is to exchange funds with users who have not had to verify their identity, further adding to the lack of trust.
Do not trade any more personal information than is necessary to execute the transaction. Perhaps just give your email address instead of a phone number if you are meeting in person.
Although the meet up option may help strengthen local Bitcoin Cash communities, it still seems like a very manual process that shouldn’t be necessary to trade a currency built on decentralized trust.
However until local Bitcoin Cash can perfect its trader reviewing process, and perhaps implement KYC requirements, face to face meet ups may continue to be necessary.
While there are a number of factors that the local trader should consider, one of the most important is the potential legal implications from trading on an exchange like Local Bitcoin Cash.
Moreover, as trading volumes continue to grow on local bitcoin cash, we are likely to see way more scrutiny come its way by the likes of government authorities. We have also seen this at Local Bitcoins as they have started to institute KYC in the wake of legal issues that have been raised about the service.
Either way, until that time it seems that Local Bitcoin Cash is a reasonable choice for local BCH trading. Just make sure you follow general security best practices as well as common sense when local trading.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.