LocalMonero in Brief
LocalMonero– a new peer-to-peer digital currency exchange for trading Monero– works exactly the same way as a similar peer-to-peer Bitcoin exchange called LocalBitcoins.
The LocalMonero website is essentially a marketplace where Monero buyers and sellers can find each other and negotiate deals. Once both parties agree to the terms of the sale, LocalMonero holds the Monero funds in escrow. LocalMonero releases the Monero funds only after both sides are satisfied with the deal. A rating system helps LocalMonero users identify untrustworthy buyers and sellers.
If you use LocalMonero advertisements to find LocalMonero sellers, you don’t have to pay any fees. However, if you create a buy ad, you will have to pay a 1% fee to LocalMonero.
- Low fees.
- Worldwide availability.
- No verification required.
- Large, active community of Monero buyers and sellers.
- Escrow system.
- The LocalMonero team has chosen to remain anonymous.
- No AML (Anti Money Laundering) or KYC (Know Your Customer) controls.
- Monero is the only supported cryptocurrency.
What is LocalMonero?
As mentioned above, LocalMonero is a peer-to-peer exchange for trading Monero.
Monero is an open-source, privacy-focused cryptocurrency that was introduced by an anonymous development team in April of 2014.
Ring signature technology is the main privacy mechanism of Monero. Essentially, ring signatures make it nearly impossible to connect a Monero sender to a Monero receiver on Monero’s public ledger. In the original version of Monero, senders and receivers were concealed but the amounts being transferred were still public. However, an update called RingCT made it impossible to determine amounts being exchanged on the blockchain.
In addition to ring signatures, Monero has a second privacy feature called stealth addressing. Bitcoin and most other cryptocurrencies use public addresses. If you know someone’s Bitcoin address, you can determine how much Bitcoin they have. But because Monero uses stealth addresses in place of public addresses, you can’t derive that information from a Monero address.
In episode 13 of the Monero Monitor Podcast, LocalMonero’s anonymous founder “Alex” revealed that he had been following Bitcoin since the early days.
“The first time I found out about Bitcoin, I think it was worth around a dollar maybe.”
Though Alex and the other people involved with LocalMonero had been aware of cryptocurrency for many years, they are currently not known in the Monero community.
“If we were to reveal ourselves today, the Monero community would probably not even know who we are. It’s not like we’re famous members of the Monero community that chose to remain anonymous.”
Aside from those brief remarks, Alex was reluctant to reveal any other details about LocalMonero’s origins story. He did, however, share his point of view on Bitcoin. One reason why people are not adopting Bitcoin, he says, is that it’s not anonymous.
“Bitcoin is not really the solution or the next step in the evolution of money because it lacks privacy.”
Alex believes that only Monero or other similar currencies that offer true anonymity represent the future of cryptocurrency.
Leadership and investors
In an post to the BitcoinTalk forum, the LocalMonero team stated that they are based in Hong Kong.
“We are a team of Monero enthusiasts based in Hong Kong. Hong Kong is one of the three financial capitals of the World (the other two being New York and London), and is also the World’s freest economy. In addition, Hong Kong is known in the cryptocurrency industry as being one of the best jurisdictions for cryptocurrencies.”
There is no information about how LocalMonero is funded or whether or not it has acquired any well-known venture capital investors.
LocalMonero’s founder hides his face and uses the name “Alex” during interviews with the process.
Protecting customers’ coins
Legal and regulatory compliance
Because complying with money service standards would compromise LocalMonero’s privacy-first philosophy, LocalMonero has made no attempt to comply with KYC (Know Your Customer) or AML (Anti Money Laundering) standards.
In a recent interview, LocalMonero’s anonymous founder shared his views concerning privacy:
“Monero’s defining feature is privacy, so going through ID/address verification kind of nullifies the point of using Monero unless you’re just using it as a speculative asset. There’s no point for us to collect more information than we need to run the platform. And Monero users will value that more than most.”
Rather than attempt to impose top-down restrictions on who can and who can’t use LocalMonero, this exchange puts the burden of figuring out whether or not it is legal on its individual users. LocalBitcoins customers are responsible for ensuring that they don’t violate local commerce laws and regulations.
Coin listing policies
LocalMonero’s escrow system only supports one digital coin: Monero.
On the official LocalMonero forum, a LocalMonero user request support for additional altcoins. If the post gets a significant amount of likes, the admins may consider adding support for additional coins.
LocalMonero has not published many details about its security system. Like almost all digital exchanges, LocalMonero is compatible with Google Authenticator and other two-factor authentication apps that support the TOTP (Time-based One-time Password) algorithm.
Since LocalMonero launched in 2017, it has not had any publicized security issues.
LocalMonero’s advanced privacy features include the ability to turn off Google’s geocoding APIs and Tor network accessibility.
LocalMonero’s support database is completely empty, but there is an official LocalMonero forum and a fairly decent FAQ page. The customer service department handles issues via a ticketing system. There is no phone support.
The fact that LocalMonero is far more anonymous compared to Bitcoin trading sites makes one wonder whether or not there are money launderers in the LocalMonero marketplace. On the other hand, there aren’t any news reports of arrests in connection to LocalMonero.
How to Join LocalMonero
Who can join?
Anyone in the world can use LocalMonero. However, LocalMonero is not legal everywhere. The exchange has assigned the burden of figuring out local laws to its users.
One of LocalMonero’s key features is privacy. Anyone can buy and sell Monero on LocalMonero without going through any type of identity verification process.
On Reddit, a LocalMonero staff member had this to say about LocalMonero’s lack of built-in KYC (Know Your Customer) functionality:
“We currently don’t have the manpower/resources to do that, so it’s not a top priority. We’re considering doing it in the future, if enough people request it.”
Even though the LocalMonero site doesn’t require identification, some individual LocalMonero sellers do. Before you buy Monero through a LocalMonero seller, check the advertisement before you buy to find out if verification is required.
All LocalMonero accounts are the same. Institutions or high volume traders can’t get special LocalMonero accounts.
What Can You Trade on LocalMonero?
As LocalMonero’s name suggests, Monero is this exchange’s main currency. Though LocalMonero sellers accept a variety of fiat and cryptocurrency payments, the escrow system only works with Monero.
Every fiat currency is supported, as long as there are buyers and sellers willing to accept it. As is the case on all peer-to-peer digital exchanges, LocalMonero buyers and sellers negotiate their own trading terms.
LocalMonero users can exchange Monero for whatever fiat or digital currency is available in LocalMonero’s peer-to-peer marketplace. The buy/sell interface brings up hundreds of different fiat and digital currencies.
Because LocalMonero is a peer-to-peer exchange, it lacks the typical advanced features that you’d find on a traditional exchange. There’s no way to buy Monero on margin, for example. API support isn’t available, either.
Trading Tools and Fees
All you need to do to open a LocalMonero account is type in a username and password. If you want to provide an email address as well, you can– but you don’t have to.
Once you have an account, you can access all the site’s features via the menu on the left side of the screen.
To see a list of Monero sellers, click the Buy arrow and then type in the currency you want to use. You can also narrow the search results by country if you want.
The LocalMonero rating system follows the same format as LocalBitcoins. The first number to the right of the seller’s username indicates how many trades they’ve processed. The percentile score is their overall rating. The colored circle indicates how fast the seller responds to messages and buy requests.
Sometimes it takes a while for the LocalMonero marketplace to catch up with the actual price of Monero. At the beginning of the day, Monero was selling for $200.85 USD according to Investing.com. But in recent hours, the price of Monero plunged to $188.52.
Another thing to keep in mind when using peer-to-peer exchanges is that all risks and fees are built into the advertised prices. As a result, sellers offering risky payment methods have lower maximum purchase thresholds and higher prices.
Before you place a buy order, it’s a good idea to check the seller’s profile. You can do this by clicking on their username.
Scroll down to find out if the seller has any other open offers.
The process for selling Monero is nearly identical to the process of buying Monero. Just click the Sell arrow from the dashboard to bring up a list of LocalMonero users that want to buy Monero.
Here’s what the search results page looks like:
You should always check the buyer’s profile before selling your Monero on LocalMonero. LocalMonero profiles provide clues that indicate whether or not the buyer is reliable.
The user depicted below wants to pay for Monero with PayPal, but they only have three trading partners and no feedback rating.
This seller, on the other hand, is probably more reliable because they have completed hundreds of trades and the feedback score is still high.
Mobile app support
There is no official LocalMonero app. However, you can connect your account to the Telegram app and receive LocalMonero notifications via the LocalMonero chatbot.
Deposits and withdrawals
LocalMonero buyers and sellers deal in many different currencies and offer many different types of fiat payments. Typical payment options include credit cards, bank transfers, cash (in person and by mail), direct deposit, Western Union, pre-paid debit cards and many others.
As is the case with all peer-to-peer exchanges, individual sellers must absorb all the fees and risks involved with whatever fiat currency payment system they choose to support. Prices vary depending on the currency used, the payment method and many other factors.
Other than a small variable Monero network transaction fee, there are no fees for deposits and withdrawals.
LocalMonero changes the same fees as LocalBitcoins and Paxful: a 1% fee for creating an ad. If you use the existing advertisements to buy and sell, you don’t have to pay any transaction fees. However, if you post an advertisement to find a buyer or seller, you have to pay the 1% fee.
Like other peer-to-peer exchanges, LocalMonero features worldwide availability, low fees, and an escrow system to prevent scams, However, the fact that the leaders of LocalMonero are anonymous is a potential red flag. It’s hard to understand why LocalMonero’s leaders would hide their identities.
For new traders
Even though peer-to-peer exchanges offer a relatively easy and low risk way to buy cryptocurrencies, trading your Monero for fiat funds via LocalMonero can be risky business– particularly if you choose to accept PayPal, credit cards and other payment methods that offer chargebacks. Once you send your Monero to a buyer, there’s no way to get it back.
For advanced traders
LocalMonero currently doesn’t offer margin trading, real time charts, automation or any other advanced trading features. Instead, LocalMonero caters to cryptocurrency traders that need privacy. LocalMonero’s advanced privacy features include the ability to turn off Google’s geocoding APIs and Tor network accessibility.