Part One: The Frustration of Buying and Selling Ether

Ethereum has seen a giant leap in utility in the past months, but there’s still a huge problem: many are finding it difficult to buy or sell its currency.

Today, there is no easy way to trade ether for those that want to side-step the various hurdles of centralised exchanges.

The problem with exchanges

There is an array of headaches when using a traditional cryptocurrency exchange such as Kraken or GDAX.

Firstly, the verification requirements are lengthy and annoying. To be able to withdraw any significant amount from your trading account, exchanges will ask you to submit photo ID and other documents; before waiting days or even weeks for the staff to review your profile.

Once you’ve deposited the funds — which can take a long time as you’ll have to deal with the problems of international bank transfers — exchanges often impose massive fees whenever you buy or sell the currency on the open market.

Traders are putting tremendous trust into centralised exchanges, which are notorious for losing or misplacing customer deposits. To name only a few examples: MtGox famously lost $460 million in 2014, BitStamp misplaced $5 million in 2015, BitFinex lost $72 million last year, and QuadrigaCX accidentally burnt $13 million of ether just last week. With so much money on the line, no central exchange is safe.

Finally, there is no way to exchange cash face-to-face like many of us are accustomed to for Bitcoin.

Traders are getting the raw end of the deal.

Today’s compromise

One of the only ways to exchange cash for ether is to first use one of the existing over-the-counter Bitcoin marketplaces (such as LocalBitcoins), and then convert it to ether. There is no direct fiat-to-ether alternative, which is quickly making waves as the most innovative cryptocurrency of today.

Buyers have to settle with buying bitcoin from a site like LocalBitcoins and then swapping them out for ether using an exchange service like ShapeShift. This makes it slow and expensive for a newcomer to crypto to get their hands on ether. It also means they have to put trust in a multitude of third parties along to the way.

For many, this is a constant source of frustration and confusion.

Tomorrow’s solution

localethereum.com is building a one-step solution to exchange your local currency to ether with minimal trust and maximum security.

Our simple yet effective client-based solution allows you to be matched directly with other buyers and sellers and effectively skip the middle man and trade on your own terms.

All trades executed via the localethereum marketplace are completely private: Messages are encrypted end-to-end and all trades are transacted using Ethereum smart contracts that only the parties involved have access to.

Unlike Bitcoin’s counterpart, localethereum doesn’t expect your trust; the team can’t read your messages, nor access your funds.


Coming up: Part Two — A Cryptographic Marketplace on the Web

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