LocalEthereum is a peer to peer marketplace similar to LocalBitcoins, where individuals can buy or sell Ethereum without the need for a centralized exchange. Unlike its cousin LocalBitcoins though, it offers more robust features, and a much slicker user interface for traders. Their smart contract based escrow allows for users to exchange goods in a safe and affordable way. The seller places their coins in the escrow contract, and then they are locked until the trade is ready to be completed. This creates a trustless system for trading without the need of a third party.
While only founded in November of 2017, the platform has quickly garnered a fanbase among ETH holders looking for a place to swap their coins for fiat. Since this is a peer to peer marketplace, there are no verification procedures as there would be with a centralized financial institution. That’s because you are trading with individuals, and these laws do not apply in most places, though New York is a notable exception to this rule.
LocalEthereum is located in Australia, and it allows traders from any country to participate in the exchange. Traders will not be subject to any regulations, but If you are a resident of Australia you will be charged GST. Members outside of Australia are not subject to any taxes.
LocalEthereum is big on security, this is likely due to the huge number of security dangers that LocalBitcoins accounts are subject to everyday. As a result, the platform offers many different tools to help users secure their accounts, and you would be wise to take advantage of them. They also require that at least one 2 factor protocol be used whether by email verification or app based authentication. This choice will be left up to you.
Assets on the LocalEthereum exchange are stored in a browser based wallet, but you will have the ability to back up this wallet and to export the private key for yourself. The exchange never actually holds your funds, making it safer than traditional exchange options which do not provide you with your private keys.
- 2FA authentication
- E-mail Verification
- Smart contract based escrow
- Identity Icons
LocalEthereum allows users to protect their accounts with 2FA on a compatible mobile device. They do not seem to be limited to a particular application, and users are free to utilize the application of their choosing which includes Google Authenticator, Authy, ect.
If a login attempt is made from your account, by default LocalEthereum will send an e-mail to your registered address. You’ll then need to verify this login as legitimate before access to your account will be permitted. This is meant as a second layer of protection in case someone manages to steal your account password. For this reason, it’s recommended that your email account’s password is different from your exchange account passwords.
This protects trading partners by allowing them to verify that the cryptocurrency is actually there before payment need be submitted. Upon creating a trade, users can use these smart contracts to verify funds, and then have them released upon proof of funds from the buyer’s end.
This interesting feature is meant to prevent users from sending their Ether to the wrong address. When you make a deposit or a withdrawal an icon will appear next to the address. Each address will have a different icon displayed. This is meant to alert users to an error in their address that could result in a loss of funds, or even an address that has been maliciously inserted into your recieve address space from malware. (A common way for people to have their coins stolen.)
As the name implies, LocalEthereum is mainly used for the trading of Ethereum, and this is typically done for various fiat currencies. However, this is a peer to peer exchange, and that means you can use it in any way that you wish. If you would like to either accept altcoins for your Ethereum, or trade your altcoins for Ethereum, you may do so as long as you can find a trading partner willing to swap. There are no native listings for this though so you will need to select the “other” category when making a trade of this nature.
Banking at LocalCryptos
LocalEthereum Step-by-step Guide
The LocalEthereum website has a beautiful user interface, and it’s quite easy to use. If you’ve ever used an Ethereum wallet before than you should have no trouble learning to use this exchange. If you don’t yet have any Ethereum, then a website like this will likely provide you the quickest and also the easiest method of acquiring your coins. It’s also a great way to buy if you’d prefer to remain anonymous during your purchase or to utilize an unusual payment method.
- Register your account
- Verify your email address
- Find a trading partner
- Select an offer
- Wait for the seller to put the coins into escrow
- Pay the seller
The first step is of course registering your account. Not much information is needed here besides a username and an email address. As LocalEthereum is a marketplace similar to Craigslist, you will not need any identity verification, documents or manual approval process before being allowed to trade. Make sure that your password is something you will remember, and it’s best if you write it down on a sheet of paper for safe keeping. This is because your password can not be recovered if lost! Keep it safe, and protect your funds.
After creating your account, the system will automatically send an email to the address that you registered with. For security reasons you’ll need to verify this address before being allowed to login. This email address will be used for your 2FA security, which will be enabled automatically. (You can change this to mobile app based 2FA later if you prefer.)
Next you’ll need to find a trading partner. By visiting the main trading page you’ll be able to sort offers based on the criteria you select such as location, payment method, seller reputation and price. Since this is a peer to peer platform, it’s important to check a trading partner’s reputation before you initiate a trade. Keep in mind that they may also accept or refuse trades based on your reputation, and until you complete a couple of successful trades then your purchase amounts could be limited. This is done to protect them from fraud, and you should follow suit.
Once you’ve found a partner that looks like a match, it’s time to initiate a trade. Click on “buy” to the right, and you’ll be able to view more details about the offer. On this screen you’ll be able to view the trading limits, and the requirements of the seller. Make sure to read over this carefully to make sure you agree with them. If you are okay with their requirements, then you can input the amount you wish to buy in the box as shown. Once you select “open trade” the seller will be notified, and you can discuss the transaction further.
If the discussion with your trading partner was successful, the next step is to wait for them to put the requested funds into the smart contract based escrow. All of your trades should proceed in this manner, and if the seller refuses to use the escrow they are likely trying to scam you out of your money. Don’t feel pressured into going through with a trade if something doesn’t feel right. Once they have completed the escrow transfer, a message like the one below will appear, and you will have a limited amount of time to pay, otherwise the seller may cancel the transaction.
This step will depend heavily upon which payment method you have chosen, and you’ll need to speak to the seller using LocalEthereum’s encrypted chat feature in order receive their payment information. Follow their instructions, and after you’ve fulfilled your part of the bargain you can mark your transaction as paid.
After this step is completed, you must wait for the seller to confirm receipt of funds, and then release the escrow to you. This is all you will be required to do unless there is some type of dispute over the payment, and then a third party arbitrator will step in to help settle it.
- End to end message encryption
- Allows users to pay with any methods they choose
- Multi-language support
- Fast trades
LocalEthereum offers its users advanced messaging encryption. This means that you can be assured that all of your conversations remain private. Not even the website staff has access to your communications. This protects your private data from theft and misuse. Everything is secured by a private key, and the only way anyone will have access to it is if you volunteer to give it to them. (You might do this in the event of an arbitration for a transaction dispute.)
One of the largest benefits to an exchange of this type is that there are no “approved payment methods”. You could buy or sell Ethereum against literally any asset as long as the other party is willing to trade for it.
LocalEthereum is a global marketplace, and it supports multiple language. As of now they have native support for English, Chinese, Russian, Hindi, Italian and Portuguese. They are working on adding additional languages in the future.
The exchange will automatically note which traders are likely to respond the fastest by placing a lightning bolt next to their name. This will assist traders in making swift transactions. These ratings are based on their individual response times, and the trading hours a vendor designates in their profile settings.
Buying Ethereum with cash on LocalEthereum
One of the most obvious reasons to use a service such as this is if you want to pay for cryptocurrency with cash. This is likely one of the only truly anonymous ways to purchase cryptocurrencies. There are two ways to do this, either in person or via cash by mail. While the first is likely the best option, the latter may be your only option if you live in a town that is lacking in cryptocurrency enthusiasts to supply your trade. Keep in mind that the postal service will confiscate cash in the mail if they find it, and many sellers will not claim responsibility for the loss. Any transactions of this nature happen at your own risk.
While it is slightly safer to purchase with cash in person, there are still some precautions you must take. For example, make sure your trade has at least a couple of confirmations before walking away. Double spending is a common scam that may make it look like they have transferred the cryptocurrency to you, but then the transaction fails once they are long gone with your cash in hand. If your partner is antsy to leave before confirmation it may be best to refuse the trade, especially if it’s for a good deal of money.
You should also be sure to select your meeting place carefully. Insist on meeting in a well lit public place such as a coffee shop, preferably during normal business hours. You don’t know who you are meeting, and it’s possible they could try to rob you, as they already know you will be carrying a large amount of cash on you. Be sure to protect yourself, and always check your trading partner’s reputation before proceeding with any transaction or meeting anyone
If you need help from support when utilizing the LocalEthereum platform, they have a few ways in which you can do so. On their website you can choose to submit a support ticket or you can also contact them on Telegram. Most people are happy with their support, as they reply rather quickly, and are happy to help resolve any issues you may be having with your account.
Keep in mind that support can not restore your password, and it is on you to protect it. They can help if there’s some kind of site bug, if you believe someone is trying to scam you, or if you are in need of dispute assistance for an existing trade. Answers to common questions can likely be answered via their FAQ page, or their blog which explains all of the website’s features and provides tutorials on relevant subjects involved in using the platform.
Issues at LocalEthereum
LocalEthereum has not yet experienced any issues with their service, but investors should be extra careful here. This is not a normal exchange, and every trade should be evaluated carefully. There are many opportunities to be scammed, and you should be very careful entering your password information, as no doubt there are many phishing sites out to steal your password.
Make sure to always verify the website’s URL before inputting your information, and regularly scan your computer for malware or viruses. You should also be careful of clicking any ads featured in search results for the website’s name as this are typically phishing sites.
Frequently Asked Questions
LocalEthereum does not have restrictions on any countries. They are a global exchange and users from all over the world are welcome to participate in their native currency to trade with each other or with users in other countries as well.
Yes, they do. Users can choose to complete a trade via cash in person, or they can also use the cash by mail method. When conducting a cash transaction it’s important to do your research on your trading partner, and practice good safety habits to protect yourself.
The time it takes to make a purchase will be based on who you trade with. If you choose an active seller then it’s possible that your trade could be completed in just 5 minutes. You can find sellers that are likely to make swift transactions by looking for the lightning bolt next to their name.
No, LocalEthereum is not a financial institution. They are merely a hub for individuals to exchange with one another. This means they are not subject to the same regulations a bank would be. However, depending on their location the sellers themselves may be subject to these rules. For example, in the state of New York even peer to peer sellers require a license, and may be prosecuted if caught trading without one. However, most places do not have any such laws.