Jan 24, 2019 03:30 UTC
Jan 24, 2019 at 03:30 UTC
By Prashant Jha
LocalEthereum is a worldwide peer-to-peer marketplace which anyone can use to buy or sell their Ether(ETH). It is considered to be one of the best and more secure options to trade your Ether token.
So, you have decided to invest into the second largest cryptocurrency by market cap and zeroed upon LocalEthereum to do the trade. well, then you have arrived at the right place as this article would serve as your guide on how to buy and sell Ethereum on LocalEtherum?
You May Also Read: How To Invest In Ethereum in 2019?
What is LocalEthereum?
LocalEthereum is a peer-to-peer market place to trade your Ether. It’s quite simple to use and can be used from anywhere in the world. The market place is famous because of the ease of trade it offers.
Anyone trying to buy or sell Ether can list their requirements and a peer who agrees with the terms can send you an offer. The marketplace is known for its convenience since it allows you to find a trader in your local currency.
If you are in the United States, you may use US dollars, if you are in India, you can look for people trading in INR. The security factor is also in favor of LocalEthereum as Exchanges around the world are prone to cyber attacks.
While the market place makes use of the Ethereum network’s escrow service to hold the funds until the transaction is complete. Escrow can be viewed as smart contracts with preset conditions, which when fulfilled the trade commences.
The Ethereum powered escrow service make use of end-to-end encryption so that the buyer and the seller can be assured of total privacy.
Some of the payments methods which you can use to trade on the LocalEtherum market place include,
- Bank transfer
- Cash in person
- Money transfer services
You May Also Read: 5 Popular Use Cases of Ethereum Smart Contracts
How Does Trading Happen on the LocalEtheeum Marketplace?
In order to start trading on the worldwide market place powered by Ethereum, you must have an Ethereum compatible wallet. Once you have that, you can start trading, here are a few steps involved in the trading process.
- Find a buyer/seller who can fulfill your needs and requirements over pricing and the amount of Ether you want to buy/sell.
- Once the agreement is reached, the seller put the said amount of Ether in the Ethereum powered escrow or smart contract. This works as a proof of funds and assures the buyer that the seller indeed possesses the amount they are promising.
- The buyer initiates the payment which is held in the escrow and once the seller confirms it, the trade is completed.
As you can see the trading is that simple, and the best part you can find a peer near you or the one who is ready to deal in the local currency.
What if I am unhappy with the trade I have decided upon, or I feel cheated, will the escrow accept it after the Transaction confirmation?
Generally, either party has a couple of hours to cancel the trade and withdraw their funds if either of the parts is not satisfied with it. The use of escrow helps the network to regulate irreversible transactions.
In case any dispute arises after the completion of the transaction, the network brings in a third party arbitrator and gives them the keys to decrypt the communication between the parties. The arbitrator reaches a decision after going through the communication between both the seller and the buyer.
You May Also Read: How To Buy Ethereum?
The Transaction fee, Time and Limits
The transaction fee on the network comes in two main forms, 0.25% ‘maker fee’ and 0.75% ‘taker fee’. The maker fee is for the seller who lists their offers on the market place while the taker fee is for those who respond to that listed offer.
Other than that, your payment service provider might have their own charges like the bank transfer, but the main fee is only the one mentioned above.
The transaction time may vary from a couple of minutes to a couple of days, depending upon the mode of transactions you have chosen. For example, bank transfers may take a couple of days, and the escrow won’t proceed with the transaction unless the funds have been submitted.
The LocalEthereum network has put the limit of one transaction at $5 or any other currency equivalent to that amount. This has been done to ensure that the escrow contracts do not fall victim to any double-spending attacks.
Pros & Cons of LocalEtherum Market Place
- Competitive fees
- Operates worldwide
- Lets you choose your own payment options
- Encrypted communications and a proven escrow service offer security
- Relatively straightforward and easy to use
- you may not be comfortable with peer-to-peer transactions
- May require some knowledge of how Ethereum works
- You’ll need to compare the listing value next to current market value
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As a content writer Prashant believes in presenting complex topics in simple laymen terms. He is a tech enthusiast and an avid reader.