Trading Ethereum using your Local Currency - A review of the Local Ethereum Platform
One of the challenges mitigating against mainstream adoption of cryptocurrency is the difficulties associated with buying and selling of these digital currencies using fiats. As more and more cryptocurrency projects keep springing up, developers and innovators are looking at how to bridge the gap between the early adopters and somehow technologically savvy cryptocurrency enthusiasts and those that might be looking to get in without any experience.
One of the platforms created for easy buying and selling of cryptocurrency using a legal tender that can be identified and understood by even the dumbest of humans is the Local Ethereum. Ethereum is one of the most popular cryptocurrencies in the world, just behind the almighty Bitcoin. To properly define it, Local Ethereum is a decentralized, peer to peer Ethereum trading platform using fiat that is peculiar to a user's locality.
I have had reasons to trade cryptocurrency into fiats on several occasions using different outlets/platforms with each one having its merits and demerits. The experience left me with open-minded views on fiat-based cryptocurrency trading platforms and makes me a willing tester whenever I discover a platform that offers such service. Hence, it was with pleasure I decided to try out Local Ethereum.
The cool purple colour theme of the interface welcomed my sight as I logged on to the platform. As a new user, two options were available in order to sign up and commence trading:
- The first one is to sign up normally using a unique username and password.
- The second option is to sign up using an external, Ethereum supporting wallets such as metamask and the likes. This will also require a unique username and is best recommended for advanced users.
Since I was testing out the platform for the first time, I signed up using the normal option with a unique username, an email and a password. The captcha that popped-up was quickly filled, the terms of the agreement read and accepted and a prompt indicating a mail has been sent for account confirmation greeted the screen. I took a trip into my mailbox and clicked the provided link to confirm my account. I am ready for some actions.
I was a bit taken aback by the simplicity yet informativeness of the platform. The interface after login-in has 5 tabs:
- The first tab is the browse section where users can view the available buy/sell offers on the platform. The available offers can be delimited by the user's location or nearest locations, the popularity of buyers/sellers and or payment method. The first thing that impressed me about the platform is the wide range of payment options available to a potential buyer or seller of Ethereum.
- Next to the browse section is the trade tab where all active trades initiated by a logged-in user can be accessed.
- The 'offer' tab follows next which is a section for viewing trade offers. All pending buy/sell offers can be accessed from this tab.
- The 4th tab is the in-app Ethereum wallet which is a non-custodial one, that is, the keys to the wallet can only be accessed by individual users. Users have the option of choosing a unique address for Ethereum deposit each time they want to perform a deposit transaction or just recycle addresses for a limited time period. The in-app wallet can be backed-up so that users can still get access to their wallets in case the platform goes offline.
- The last tab is the user's account tab where information such as the user's profile, login information, security option, wallet option, account option, log out option and referral program application can be found. Users can refer their friends and get 20% of their friend's trading fees for a lifetime.
After successful creation and confirmation of account, I decided to try out the functionality of the platform by selling a little of the Ethereum I have on a cryptocurrency exchange platform for my local currency. I quickly transferred a fraction of Ethereum from the exchange to my in-app wallet. Luckily enough, the Ethereum network was not congested, hence the deposit reflected within few minutes.
Thereafter, I had the option of creating a 'sell' offer with personalized terms or just browse for an existing buyer with an offer that I am cool with. I chose to go with the last option. I delimited the search with my location (country), payment option (bank deposit) and the number of trades a buyer has successfully carried out on the platform knowing that this might be an indication of trust level.
I eventually settled for a buyer with agreeable terms and entered into a trade by filling the necessary information. Within a few minutes, the buyer responded by asking me to 'fund escrow'. I reacted by clicking the fund escrow tab.
Immediately, the trade status changed from 'seller puts Eth into escrow' to 'waiting for the buyer to pay the seller directly'. Having entered my account information during trade initiation, the buyer funded my account with the equivalent amount in my local currency and the trade status changed accordingly. Then the concluding part of the transaction was where I had to release the Ethereum from the escrow to the buyer. I was presented with the option of giving feedback concerning the buyer which I gladly did. It was really smooth sailing.
My first time of testing out the platform and the experience was really smooth as compared to the first time I used Local Bitcoin to exchange Bitcoin to fiats. Considering the transaction speed of Ethereum over Bitcoin and lesser transaction fees of Ethereum, I am a bit surprised that the Local Ethereum platform is not popular than it currently is. The application has been around for some time and has even been profiled by the decentralized application ranking platform, state of the dapps.
Local Ethereum platform charges a 1% fee for a complete transaction. This 1% fee is shared between the creator of an offer and the acceptor of the offer in ratio 1:4. Hence, it is actually better to create buy/sell offers on the platform than to just accept offers as offer acceptors pay a larger fraction of the transaction fees. On the downside, I really cannot remember paying any form of transaction fee on the Local Bitcoin platform.
Trading cryptocurrency to fiats using Local Ethereum seems to be a bit less secure than using Local Bitcoin in that both the buyer and the seller on the later are required to submit KYC documents for verification before they can carry out any transaction on the platform. KYC is not required to trade on Local Ethereum and hence, it might be easier for an unsuspecting user or a novice to be defrauded by another user.
However, the wide array of payment option available on Local Ethereum cannot just be overlooked. If I eventually found myself ditching every other fiat-crypto gateways for the Local Ethereum platform, it is going to be because of the several payment options available.
In conclusion, if I am to rate the Local Ethereum platform out of 5, I will give it 4.