brian on Nostr: Helsinki-based peer-to-peer cryptocurrency exchange LocalBitcoins will be winding ...
Helsinki-based peer-to-peer cryptocurrency exchange LocalBitcoins will be winding down its services due to financial pressure.
It became a crucial part of the Bitcoin "circular economy," acting as an onramp into Bitcoin markets that allowed users to transact directly with peers. LocalBitcoins held coins in escrow to help people find buyers and sellers, and its services were in high demand in regions facing capital controls, economic instability, and financial isolation or sanctions.
However, the company's data showed that in 2020, Russia, Venezuela, and Colombia accounted for 41% of LocalBitcoins' trade volumes. Over the years, the company faced political pressure due to its lax identification procedures, and eventually instituted cash and know-your-customer (KYC) procedures in compliance with Finnish regulations.
Over time, the company's average weekly volumes dropped, and last week only 283 BTC were traded. The company's decline may be due to several factors, including its bare-bones user interface, its Bitcoin-only policy, and the bear market, but the author suggests that the company failed because it became a money transmitting business subject to the laws of the land, rather than a P2P service that protected users' privacy.
https://www.coindesk.com/consensus-magazine/2023/02/10/an-ode-to-localbitcoins-and-a-lesson-about-maintaining-bitcoins-public-goods/
It became a crucial part of the Bitcoin "circular economy," acting as an onramp into Bitcoin markets that allowed users to transact directly with peers. LocalBitcoins held coins in escrow to help people find buyers and sellers, and its services were in high demand in regions facing capital controls, economic instability, and financial isolation or sanctions.
However, the company's data showed that in 2020, Russia, Venezuela, and Colombia accounted for 41% of LocalBitcoins' trade volumes. Over the years, the company faced political pressure due to its lax identification procedures, and eventually instituted cash and know-your-customer (KYC) procedures in compliance with Finnish regulations.
Over time, the company's average weekly volumes dropped, and last week only 283 BTC were traded. The company's decline may be due to several factors, including its bare-bones user interface, its Bitcoin-only policy, and the bear market, but the author suggests that the company failed because it became a money transmitting business subject to the laws of the land, rather than a P2P service that protected users' privacy.
https://www.coindesk.com/consensus-magazine/2023/02/10/an-ode-to-localbitcoins-and-a-lesson-about-maintaining-bitcoins-public-goods/