The Localbitcoins.com operations have been almost flawless for the years that it has been in existence. The site has been providing a nice pricing discovery for the bitcoin market. Also, during this period, it did not succumb to the whims of the law.
Even the legal battles of the Localbitcoins.com consumers did not faze the operations of the site. Localbitcoins.com was the best place to do business because it was anonymous, it provided the basic tools for coordinating a buy or a sell from anyone, and it had a large number of users.
Besides, since the transactions were reversible, possibilities of scums occurring was close to null. However, on January, Localbitcoins.com started asking for personal identification before authorizing trades.
Localbitcoins.com Identity Verification
The image above represents the ID verification that Localbitcoins.com currently requires. You will need a copy of your ID using netverify.
Many people saw the changes in Localbitcoins.com coming. Speculation was made on the chances that LBC would require KYC checks in the near future. Back in January, the company stated that the only verification requirement would be the Identification Number.
This verification was considered to be necessary for opening trades with more traders but not all of them. While the announcement was made on their blog and twitter, they did not sent emails to all the users to ensure the information was sufficiently received.
The Beginning of the Fallout
On January the 30th 2019, Localbitcoins.com users started to get a notification message after logging in that requires the 1D verification.
The verification was necessary to ensure that the account advertisements were not disabled. This has ultimately led to the decline of Localbitcoins.com in terms of popularity. Worldwide, Localbitcoins.com was shortly ranked at 2284 and in China, it was ranked at 3044.
Why the Verification Laws?
These changes were to be enacted in accordance with the General Data Protection Regulation. This was also a result of the European Union decree on data privacy and protection. This is what started the need for ID verifications as well as limits on trade volumes.
It also led to fraud investigations and a requirement that users be older than 16. One year later, the site stated being supervised by the Financial Supervisory Authority of Finland. Once the in-person trade options were removed on June 1st 2019, users were forced to either trade through online payment methods.
The other option was to deposit the money directly to the seller's account. This led to the reduction of user anonymity in the site. Localbitcoins later removed a statement saying that the removal of the in-person trades was dictated by the local regulatory framework.
But there is a reason why people choose to buy and sell anonymously. It was already too late for localbitcoins.com.
Localbitcoins.com Alternative: Local.bitcoin.com
Local.bitcoin.com was launched two days after the removal of cash trades on Localbitcoins.com. Now, traders can use the peer to peer Local.bitcoin.com cash marketplace for any of their trading’s. Besides, the new site allows users to use any payment method.
Also, the noncustodial platform provides buyers, as well as sellers, with great margins of trade. Unlike localbitcoins.com, Local.bitcoin.com also offers in-person cash trades. Therefore, people can trade locally amongst each other.
Local.bitcoin.com launched on June 4th and it allows users to trade using other forms of payment once you open an account and add your profile details. These will include your payment method, local currency, and location.
Also, you can download a wallet backup so that you can secure your future funds. This will help you to do any over the counter trades effortlessly. Besides, the site will allow you to make more money through referrals. All you have to do is invite people to the BCH marketplace.
Once a person signs up on Local.bitcoin.com through your referral, you will earn 20 per cent of their lifetime trading fees. Local.bitcoin.com is an amazing alternative option to Localbitcoins.com because it also provides an escrow system.
Escrow systems ensure that traders are not robbed of their funds. Their solutions are far more secure and safe to use. Local.bitcoin.com offers a blind escrow that creates an on-chain Bitcoin Cash transaction. This happens as the cash sits in limbo.
Hence, it is virtually impossible for anyone that is not in the deal to spend the cash that is held in the escrow. If you want to learn how to join Local.bitcoin.com, you can check the process here.
Choosing to stop offering in-person cash trades was probably one of Localbitcoins.com worst idea. In addition to the other changes made, the site has become another typical bank. Many traders now prefer to work on sites that are less restricted. Thanks to the launch of alternative sites such as Local.bitcoin.com, users can still conduct their bitcoin trades online.