Crypto Academy / Season 3 / Week 1 - Homework Post for @sapwood Non-custodial P2P Marketplace (Localcryptos)
This is really interesting and informative for me to know about decentralized P2P exchange Localcryptos. As in India, the banking system is not supporting fully to the local crypto exchanges, I do prefer P2P trade and now this decentralized P2P is really an amazing way to trade P2P. After going through the lesson in depth here I am submitting my homework and hope it would be up to the required standard.
Task 1
How do you set up an Exchange niche(non-custodial) in Localcryptos? (Complete process & Screenshots needed)
Setting up of an Exchange niche
- Landed on https://localcryptos.com/signup
- Opted for email sign up and filled the required information.
- Proceeded to create an account.
- Account was created immediately just after confirming the confirmation email.
After creating the wallet I took backup and saved all keys, screenshots are in task 2
- Now I want to sell or provide liquidity to the exchange so will create the sell offer.
- Clicked on offer tab > Create a new offer
- Filled all requirements as per my preferences.
My preferences 👇
- And the offer was created, I become the market maker!
- When I will find the buyer, I have to deposit my asset to escrow then the buyer will transfer money in my account via my preferable way and as soon as I will confirm the money received escrow will release the asset to the buyer.
Real time transaction
I also did a real-time transaction to buy ETH on Localcryptos. It is shown in 7 screenshots as below.
- Filled all the required filled like crypto, country, currency, and payment mode. Selected the seller who was on the top of the list, selling his asset at a 20% premium. As it was just to gain experience so I didn't bother to buy at a premium.
- Started the conversation and open the trade.
- After opening the trade it was showing the status that the seller is putting assets in escrow.
- Once the seller puts asset in escrow it was showing that the buyer pays the seller directly. The seller shared his UPI ID with me and I sent the money.
- As soon as the seller received the money he confirmed and released the asset from escrow.
- After releasing the asset from the escrow it took about 10 minutes to receive the asset in my wallet.
- ETH I bought was also displaying in my Trust wallet at 11:32, (As I already have imported my Localcryptos wallet to my trust wallet).
How I re-imported my LCW in Trust wallet is described in task 2 Balance can be seen as zero there at 7:27!
Task 2
Indicate your non-custodial wallets (BTC, ETH. LTC, DASH) in Localcryptos? How do you secure the keys? Can you re-import the wallet of Localcryptos in other wallets(of different services) For example, Can you re-import your Locaclcryptos wallet in Trustwallet?
Non custodial wallets (BTC, ETH. LTC, DASH) in Localcryptos
- Right now there are options for four cryptos to trade. To open the wallet landed on https://localcryptos.com/wallet
- I am interested to buy LTC so set up the LTC wallet. Clicked on LTC.
- It was displaying the wallet address which I copied and saved.
- Similarly other 3 wallets viz BTC, DASH and ETH can be created.
Securing the keys
- After creating the wallet there was an option to export a private key. Clicked on that and the key was displayed on the screen. Copied in text file and printout stored safely.
- Backing up a wallet, just below the wallets there is an option to take backup of wallets. All keys will be downloaded in JSON format which can be opened in a word file.
Backup data 👇 opened in word file, taken printout and stored at safe place offline as well as soft copy in computer.
Re-importing the Localcrypto wallet in 3rd party wallet
Yes, we can import Localcrypto wallet in 3rd party wallet like Trust wallet. For that, we would be required keys of Localcrypto wallet.
I did in the following steps.
- Opened Trust wallet on my mobile as it is not available as a Google Chrome extension. In the below 9 screenshots I explained how I re-imported Localcrypto ETH wallet to my already existing Trust wallet.
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- Opened the Trust wallet and clicked on setting.
- Selected Wallets option
- In wallets clicked on +
- Import option opened, I opted to download Ethereum wallet.
- Clicked on I already have a wallet
- In Import Ethereum I entered my private key of Localcrypto Ether wallet, entered wallet name as Local Crypto ETH. (On this page screenshot was not allowed so I took the photo using another mobile)
- Wallet was successfully imported Done
- Showing ETH balance from LCW
- Showing LCW in Wallets list of my Trust wallet.
Thus, it is completed in 9 steps.
Task 3
How many different fiat options available in Localcryptos?
Fiat options
We can trade in 165 currencies across the world. The lists of currencies are as shown in the photo below.
Mode of payment
Localcryptos support about 35 modes of payment in three categories as shown in the photo below.
- Popular domestic payment methods
Bank transfer
Cash (in person)
Cash deposit
WeChat Pay - International payment methods
Western Union
International wire
MoneyGram
PayPal
AdvCash
Skrill
Revolut
PAYEER
Venmo
The most popular one for international transfer is TransferWise which is available in 67 countries.
SEPA transfer available in 36 countries
WebMoney available in 26 countries
WebMoney in 11 countries
MTN Mobile Money and Airtel in 10 countries
QIWI in 8 countries
Mercado Pago in 7 countries
Chipper Cash in 6 countries - Local payment methods
Other systems are only applicable to particular countries.
Task 4
How secure is Localcryptos as a non-custodial P2P Market? How does escrow protection safeguard both buyers and sellers?
Localcryptos as a non-custodial P2P Market is highly secure. There are some reasons behind that.
- It is a decentralized P2P exchange that does not store seller/buyer's coins.
- It is a fully automated escrow system that makes it impossible for the platform owners and developers to access your funds.
- An escrow is a smart contract that runs on predefined codes. It facilitates the trade between buyer and seller without any trust in each other. They just have to interact with this smart contract.
- At the time of selling your crypto remains in non-custodial escrow until you didn't receive the payment.
- Chat is end-to-end encrypted so no third party can access the conversation. Only can be decrypted and used as evidence in case of a dispute.
Escrow protection safeguard for both buyers and sellers
As a Buyer
- When a buyer logged in to the platform to buy any asset he has two choices, either buy from the marketplace where sellers already have listed their offers or he can create his own offer.
- When he decided to buy from any seller he placed his order and start a conversation with the seller. Seller 1st put his asset in non-custodial escrow service and a message will be displayed that coins are under escrow. ( The screenshot is in task 1 where I displayed a real-time transaction)
- Once payment is done coins will be released from the escrow so there is no chance of losing money and the buyer can pay money directly to the seller with peace of mind.
As a Seller
- It is just opposite to buyer so the seller also can perform a transaction without worrying about losing his asset.
In case of any dispute, an arbitrator from Localcryptos steps in, and after a complete investigation escrow releases coins to the legitimate owner.
Conclusion
As the crypto field is not regularized in almost all countries so there are a lot of issues in buying and selling crypto with fiat currency. In India, some exchanges also providing P2P trade facilities but they are not decentralized and our asset is always at risk there.
Here this Localcryptos provides an amazing solution of both, regulation issues of different countries, as well as untrust of any centralized platform.
I am really thankful to Prof @sapwood for delivering such an interesting and informative lesson on the P2P exchange and trading systems.
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