TL;DR: On June 4th, 2019, Local Bitcoin goes live. It’s a new bitcoin cash (BCH) centric trading platform modeled on the popular Localbitcoins idea, but with significant twists: no know-your-customer (KYC) rules, no counterparty risk, no surveillance, non-custodial, and on-chain escrow. CoinSpice interviewed the project’s main manager, Corbin Fraser, to get a deeper look at what to expect.



Bitcoin Cash Trading: Anonymous, Peer-to-Peer

Pioneers such as Localbitcoins and the likes of ShapeShift began in the spirit of what many hoped for bitcoin generally: permissionless digital cash. And while segments surely still believe in elements of that notion, each has invariably succumb to significant pressure from governments and law enforcement around the world, meshing their respective services with legacy finance tracking and dependency.

That, and such projects were not focused on BCH — the coin was either ignored altogether or just one of many choices to trade against tokens. There wasn’t really a true home for bitcoin cash and the ethos it represents. A fundamental need to get in and out of fiat was simply not being met without serious friction: linking bank accounts, signing up with an exchange, long delays, handing over vast amounts of personal information, etcetera.

Local Bitcoin is claiming to solve many if not all of these issues. It’s an ambitious undertaking, and so CoinSpice wanted to get under the hood a bit and flesh out some of its finer points with a person in the know. Corbin Fraser of Bitcoin.com is that man. He’s the longest-running and affable co-host the site’s weekly YouTube news summary. Just a handful of days before the trading platform’s launch, Fraser agreed to an interview late into the night from Tokyo, Japan.

LocalEthereum and OP_CHECKDATASIG

CoinSpice: How did Local Bitcoin come about?

Corbin Fraser: Local.bitcoin.com is mostly a team baby. Though if I were to say – who’s the brain behinds it. That would be our very own Michael Foster. He’s a bit more shy, but he’s one of the most impressive young men I’ve seen enter the Bitcoin Cash space. I focus mainly on helping manage the project and coordinating with our Product and Marketing teams to help make it a success.

Roger Ver [CEO of Bitcoin.com] indicated in one of our weekly shows back in late 2018 that we were looking to build out a Local Bitcoin Cash platform, and Michael reached out and presented what he had in mind.

Michael was one of the original creators of LocalEthereum.com. As with most ETH devs, he came from the Bitcoin world originally, and like so many was disenfranchised and moved on to greener pasture.

He had been watching with a close eye the developments going on at Bitcoin Cash. And with OP_CHECKDATASIG he saw this as the best way to create what we’ve been calling a Blind Escrow, using Scripting on Bitcoin Cash — something that’s ONLY possible on Bitcoin Cash.

OP_CHECKDATASIG allows this all to happen, then? That’s the real innovation giving it wings?

Yessir – that little op code that caused some drama back during the November 2018 network upgrade. Without it, we wouldn’t be able to create these unique types of transactions that allow for funds to be released based on specific conditions.

It’s complicated but the FAQ explains exactly how this Blind Escrow works. It’s the reason why Bitcoin.com feels safe in running this service. Since we never hold the users’ funds, we’re not a money transmitter. Since we’re not a money transmitter, users can trade anonymously, with no KYC, unlike that other Localbitcoins trading platform many of us used to use.

We’re effectively just connecting two people who are looking to trade, and their individual wallets on their computers — they are what facilitates the exchange of funds from Alice to Bob.

5,000 Accounts Already

What’s has the reaction been like so far?

This morning we watched as our total accounts created jumped over 5,000! Not bad considering we haven’t even started trading. Trading begins on June 4th, but users can create their accounts and begin creating offers ahead of time. This ensures there’s a good amount of liquidity when we go live.

We’re seeing interest from all over the world, ranging from Iran, India, Venezuela, US, Canada, UK, Australia, Kenya, Uganda and more.

I think pre-launching with the referral system, allowing users to earn 20% of the lifetime fees from users that sign up with a special code, has helped incentivize users to share.

Any plans to roll out such a service for other coins?

At the moment, our focus is purely on Bitcoin Cash. Like Roger, everyone at Bitcoin.com feels that BCH has the greatest chance of success for becoming p2p cash for the world. We want to enable unique use cases, and help grow the ecosystem and provide fast, quick, reliable ways for users to on and off ramp onto BCH.

That’s not to say it’s impossible or will never happen, just not on our short term roadmap. Once we’ve proven viability and interest, and have ensured everything is running smooth, it’s something we plan on discussing.

Pretty much every payment-type imaginable looks available.

The popularity of payment platforms vary based on region. In China, WeChat dominates, same goes with AliPay. Where as in Japan, LINE is the only way people with phones zap money around right now. Cast a glance at the US, and it’s Paypal, Venmo, etc.

Allowing users to get in or out of whatever is most convenient for them is paramount for adoption globally. That’s not to say it doesn’t make trading more difficult for the buyers and sellers, as different platforms have different risk profiles based on their respective policies.

But just like Craigslist, or eBay, buying from another person online is up to the individual to take all of the precautions they deem necessary to complete a trade. User profiles and ratings help, but they’re never a guarantee. I recommend anyone planning on trading large volumes of crypto on any local trading platform do some research in advance.

Just like when you’re shopping for a used car, you can meet the buyer or seller. But if you don’t like them, or something seems off, you can always walk away. The same applies on any local trading platform, including local.bitcoin.com. Just because you open a trade doesn’t mean you need to complete it. If the person on the other end gives you bad vibes, you can always walk.

Trading in Four Languages

Where do you expect to see the most trading? Is there a target market?

The target market is the entire globe. But I’m hopeful we’ll see more adoption in places like Venezuela or throughout Africa. BTC fees are currently at $3.89 to get into the next block. Those kind of fees price people out, and hurt those that could benefit the most from Bitcoin. Bitcoin Cash is fast, cheap, and reliable, and is scaling to become global cash for the world. The only way that works is if we can keep the fees low so users aren’t priced out for doing something some BTCers lose their minds over, actually using it.

Are you at all concerned about liquidity?

I’m confident we’ll be able to gather enough offers to allow for users to enjoy the convenience of the platform. We’ve already got several thousand waiting in queue for trading to begin, and that number grows daily.

Our marketing team also has some great ideas to bring more users and help spread local.bitcoin.com across the globe.

We’re also launching with 4 languages right off the bat, including English, Russian, Spanish, and Chinese. We’ll be expanding that into other languages right away to make it easier for everyone to create offers.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.

CONTINUE THE SPICE and check out our piping hot VIDEOS. Our podcast, The CoinSpice Podcast, has amazing guests. Follow CoinSpice on Twitter. Join our Telegram feed to make sure you never miss a post. Drop some BCH at the merch shop — we’ve got some spicy shirts for men and women. Don’t forget to help spread the word about CoinSpice on social media.