LocalBitcoins

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LocalBitcoins
FoundedJune 2012[1] in Helsinki, Finland[2]
Key people
Nicholas Kangas (CEO until 10/2017)
Jeremias Kangas (CEO, Founder)
WebsiteOfficial website Edit this at Wikidata

LocalBitcoins is a bitcoin startup company based in Helsinki, Finland. Its service facilitates over-the-counter trading of local currency for bitcoins.[3] 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[4] 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 1,400–3,000 bitcoins per day.

History[edit]

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 the beginning of 2013. In April 2014, the company announced that it would begin mass producing low cost bitcoin ATMs.[5] In the same month, LocalBitcoins suffered from a security breach, when 30 bitcoins (then worth US$15k) were stolen from its users.[6]

In September 2014, CoinDesk announced LocalBitcoins' launching of a merchant invoicing tool.[7]

In December 2014, the Federal Financial Supervisory Authority of Germany contacted LocalBitcoins about licensing issues, and LocalBitcoins ceased to operate in Germany.[8] LocalBitcoins said that it had about 8000 people actively using the service from Germany at the time.[8] In February 2014, two men from Florida were charged with violating state money laundering laws for using LocalBitcoins.[9]

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.

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.[10] 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.[11]

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.

In 7 December 2017, new user registration was briefly paused, as the site experienced record traffic.[12]

In 2018, LocalBitcoins headed the list of best financially performing companies in Finland arranged by the local specialised publication Kauppalehti.[13] CoinDesk published in April of the same year an article stating that LocalBitcoins counted with 4 million registered users and had a 40% increase in registrations during the past semester. [14]

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.[15]:23 The site is suggested for casual traders seeking more privacy.[15]:207 The site uses an escrow system and the transfer of bitcoin is made after funds are received in the sellers account.[16][17]:221

References[edit]

  1. ^ Knibbs, Kate (2015-02-05). "Meet the Street Dealers Who Peddle Bitcoin". Gizmodo. Archived from the original on 2016-12-30. Retrieved 2016-12-30.
  2. ^ "LocalBitcoins | CrunchBase Profile". CrunchBase. Retrieved 2014-02-19.
  3. ^ McMillan, Robert (2013-03-28). "Why the Only Real Way to Buy Bitcoins Is on the Streets | Wired Enterprise". Wired. Condé Nast. Retrieved 2014-02-19.
  4. ^ Murphy, Kate (July 31, 2013). "Virtual Currency Gains Ground in Actual World". New York Times. Retrieved February 20, 2014.
  5. ^ Joon Ian Wong (2014-02-15). "LocalBitcoins Starts Manufacturing Low-Cost Bitcoin ATM". CoinDesk. Retrieved 2014-02-19.
  6. ^ Berkman, Fran (2014-04-17). "LocalBitcoins exchange confirms security breach, stolen bitcoins". The Daily Dot. Archived from the original on 2016-12-30. Retrieved 2016-12-30.
  7. ^ https://www.coindesk.com/localbitcoins-bitcoin-billing-merchants/
  8. ^ a b Rizzo, Pete (2014-12-10). "LocalBitcoins 'Exploring Options' After Service Halt in Germany". CoinDesk. Archived from the original on 2016-04-10. Retrieved 2017-01-03.
  9. ^ "LocalBitcoins.com Targeted - Another Major Bitcoin Exchange May Be Under Threat". Business Insider. 2014-02-09. Retrieved 2014-02-19.
  10. ^ Young, Joseph (2015-08-25). "BitQuick and Local Bitcoins Terminate Service in NY due to BitLicense Compliance Costs". Bitcoin Magazine. Archived from the original on 2016-05-21. Retrieved 2017-01-03.
  11. ^ Mizrahi, Avi (2016-09-13). "Russia's National Censor Blocks Access to LocalBitcoins. LocalBitcoins responded to the ban by instructing Russian users on how to bypass the censorship". Finance Magnates. Archived from the original on 2016-12-30. Retrieved 2016-12-30.
  12. ^ https://cointelegraph.com/news/demand-wrecks-bitcoin-infrastructure
  13. ^ https://www.kauppalehti.fi/yritykset/menestyjat/parhaat
  14. ^ https://www.coindesk.com/cryptos-craigslist-localbitcoins-making-millions-bitcoin-needed/
  15. ^ a b Guttmann, Benjamin (2013-11-25). The Bitcoin Bible. Books on Demand. ISBN 978-3732284320.
  16. ^ Patterson, Sam (2013-12-04). Bitcoin Beginner: A Step By Step Guide To Buying, Selling And Investing In Bitcoins. Better Life Publishers. ISBN 9781483521060.
  17. ^ Cofnas, Abe (2015-07-20). The Forex Trading Course: A Self-Study Guide to Becoming a Successful Currency Trader, 2nd Edition. Wiley Trading. ISBN 978-1118998656.

External links[edit]