Crypto is one of the segments where learning is always helpful and its helps us a lot. There are a bunch of options available for us to explore and in this lesson, I have learned about the Non-custodial P2P Marketplace. This is also known as decentralized exchnage. So in this port professor @sapwood has talked about Localcryptos which is a decentralized p2p exchange. We know decentralization gives us control and there is no central authority that controls the transaction or funds. P2P is a nice way to trade however there is a lot that we need to learn and follow for a safe and successful trade.
Task 1 : (1) How do you set up an Exchange niche(non-custodial) in Localcryptos? (Complete process & Screenshots needed)
Let's go through the steps to set up an Exchange niche-
Open web portal https://localcryptos.com/signup and here we get 2 options to create an account. I go ahead with the email option to create an account as suggested.
I have filed the required information and its a very small form that does not ask for more information which is good.
Now I need to verify my email and its required to create an account. I verified the email and account is created. I just took 1 minute time to create an account and the entire process is very easy and fast.
After the email verification, I am logged in to my account, and this page showing the marketplace.
Task 2- (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?
- Currently, it supports 4 cryptocurrencies and we can access the wallet by clicking on the wallet on top of the page near the account option.
- Alternatively, this can be opened through the link- https://localcryptos.com/wallet
- I choose LTC (litecoin) to create my LTC wallet.
- There is also the option to export and I did it. Its helpful to keep the information offline and recommended to do so.
- The procedure is the same to create other wallets like BTC, ETH, or DASH coin.
How to secure the keys -
- After wallet creation, I used the export option to have a private key. There was a display button and then I copied it and saved it in my storage drive. I will get the print of it and keep it offline.
- We need to back up the wallet and these keys will be downloaded to the JSON file and this is accessible through the word. There is an option to protect the wallet and we can see this in the below snapshots-
Re-import the wallet of Localcryptos in other wallets
yes, its possible to import a local crypto wallet to another third-party wallet. I use metamask so I will use the metamask wallet browser extension to import local crypto wallet. This is so easy process and I did it in less than a minute time.
- I need either a private key or JASON file to an import wallet.
- I copied the private key from the wallet.
- Opened metamask and choose the import account option.
- It asks to select private kry or JASON to I selected key option.
- Entered key in the window and click on Import button and its done
- Now I can see my local crypto wallet in my metamask.
Task 2- (3) How many different fiat options available in Localcryptos?
Localcryptos supports over 40 payment options and they have categories these payment options in 3 parts-
- Popular domestic payment methods
- International payment methods
- Local payment methods
Popular domestic payment methods
With this people can trade in person and pay cash or deposit as per their convenience. They also have the option to pay using a bank transfer or we chat pay can also be used.
International payment methods
Localcryptos support all popular international payment options listed below-
MoneyGram
PayPal
Western Union
International wire
PAYEER
AdvCash
Venmo
Skrill
Revolut
They also have more options and mentioned that how many countries support this payment option. Sepa and WebMoney are two options that are quite popular in many countries.
SEPA - 36 countries
WebMoney - 26 countries
Alipay - 11 countries
MTN and Airtel - 10 countries
QIWI - 8 countries
Mercado Pago - 7 countries
Chipper -6 countries
Local payment methods
There are many other options also available that are country-specific. Like in India we have UPI, Paytm, and IMPS and in the same way, other countries have their own payment options.
Task 4- (4) How secure is Localcryptos as a non-custodial P2P Market? How does escrow protection safeguard both buyers and sellers?
Localcryptos is the non-custodial exchange and here we can trade on the p2p model. Its highly secure and designed in a way that both buyers and sellers have a safe and hassle-free trading experience.
How secure is Localcryptos as a non-custodial P2P Market?-
- Since its decentralized so it does not store any data of buyers or sellers.
- It has an on-chain escrow system that is fully automated and even platform owners cant have access to funds.
- Transaction is executed through the smart contract without manual intervention that makes it secure.
- Crypto holding stays in non-custodial escrow unless payment is received.
- Chat option is provided and its fully encrypted so only two parties that are interacting only have access to it.
- An arbitrator will be involved only in case of a transaction dispute.
Escrow protection for buyers-
- As a buyer, we get 2 options after logging in to the platform. We can either buy the coin from the marketplace with already available offers or we can create our own offer.
- When we finalized to buy from the seller then we need to have a conversation with the seller. Once the seller agrees then he puts the assets in non-custodial and a message will be displayed for the same.
- After payment is successful then assets will be released and it ensures that there is no chance of losing money. This is a great mechanism that ensures safety for a buyer.
Escrow protection for sellers-
In the above, we discussed the protection points for buyers, and with sellers its just the opposite of everything.
- Seller gets the payment for the assets he released to the buyer. With the protection, there is no chance for him to lose assets unless payment is collected from the buyer.
Overall this mechanism is designed for the safety of buyers and sellers both so that they dont lose and get what they desired with the transaction.
Task 5- (5) Create an offer as Market Maker or Perform a real trade as Market Taker to demonstrate your real experience of non-custodial P2P trade(Crypto-Fiat)? (Hint- Trading DASH or LTC is cost-effective in terms of transaction and escrow fees)? How much fee in total did you incur in the entire process, if any? (Screenshots Needed)
Creating an Offer to Sell
I am creating an offer to sell LTC on here are the steps-
- Go on Offers and select Create a new offer
- Fill in the required information
Here is the summary of my offer-
Now my offer is created and when there will be someone interested then I will need to release my asset to escrow. Once I will get the payment then the assets will be released to the buyer.
Real transaction
I have created the offer and now I want to experience how this platform works so I will execute the real transactions so I am going to buy LTC for some amount using fiat.
I have initiated the trade and its showing that the seller is yet to reply on the offer.
This offer is also available under the trades option and can be accessed from there as well.
This is real transaction that I have performed to buy LTC and it took sometime for me to finish it sicne seller was not available when I started the trade. Once he was avaibale then it did not take much time and I paid the amount using UPI.
UPI is one of the most popular way of payment and it does not cost any payment charge. After makinjg the payment I got I marked as paid and then asset was released to my wallet.
Now i have this much of balance in my wallet and there some minor escrow charges which I think is ok because its something that helps the platform to grow and keep it running.
India is one of the countries where crypto regulation is not clear and even there is an update about it. We have seen situations where banking support was withdrawn and at that time p2p was introduced by centralized exchanges like wazirx and Bitbns. Now with Localcrypto, we get p2p with decentralization that gives us full control and we need not worry about safety. learning about such a platform helps a lot and gives us more options to trade. We need not to worry even if banks are not supporting crypto because with p2p we deal with people.
Thank you so much @sapwood for this fantastic lesson about the Non-custodial P2P Marketplace. Localcryptos is easy to use for new and experienced users. It was a wonderful learning experience.
Thank you so much.
(I have taken images from https://localcryptos.com)