Set up your own electronic bitcoin exchange using localbitcoins.com!

Today we have added a new escrow feature to localbitcoins.com. This differs from the previous transaction feature by being completely designed only for electronic money transfers and not for physical cash trades.

The service requires that you have bitcoins in your localbitcoins.com wallet before you can start using it. The escrow service is disabled by default, and currently enabled only for selling advertisements.

The service generates reference messages automatically for the buyer, so that doing the trade is very easy for both the seller and buyer. The buyer has just to pay the invoice automatically generated by localbitcoins.com, and the seller must watch his bank/payment service account and release the funds when they are spotted.

Every trade builds up reputation for both participants. We always suggest to be cautious with first timers - in the bitcoin community, bank account hackers sometimes use services like localbitcoins.com to buy bitcoins. Therefore check the reputation of the counterparty when accepting bank transfers. Banks will notice these transfers usually pretty quickly, about in 0-3 days. With new users with no existing trade volume, it is recommended to wait or ask for additional validation before accepting the transfer.

Of course all the existing features of localbitcoins.com are also integrated with the new process, such as messaging, feedback and SMS/email notifications. You can also specify your price using equations, as before. Examples:

• Sell for market price, but at least 13.5 USD: max(mtgoxUSD_ask, 13.5)
• Buy always at competitive but fair rate (EUR): min(min(min(mtgoxUSD, bitstampUSD), USD_24h)*USD_in_EUR, EUR_24h)

Read more about the escrow feature from our guide.

For more examples for equations and all parameters, see our cash exchange guide.

We are developing localbitcoins.com constantly forward, and more features will be coming all the time. Stay tuned!

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Watch out with bank transfers!

For all localbitcoins.com users, be very careful when using bank transfers. Localbitcoins.com hasn't been designed with bank transfers in mind in the first place, so we don't have infrastructure for it. Bank transfers can also be chargebacked/accounts frozen like with paypal or credit cards. There are some people using stolen bank accounts to purchase bitcoins from sellers, on localbitcoins.com

If you are going to sell bitcoins with bank transfers, check the profile/feedback beforehand. Watch out with new users. It doesn't hurt to wait or cancel the deal when unsure.

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25 Bitcoins per Block - Not Enough for Some Miners

On the 28th of November, the reward for solving a Bitcoin block dropped from 50 Bitcoins to 25 as the first of several programmed Bitcoin inflation controls kicked in. There was rampant speculation on what the immediate repercussions would be at the time of the halving, with some expecting an immediate jump in the exchange rate, and others thinking that miners all over would begin turning off their rigs.

Neither of those predictions came to pass on the 28th, but they might have been correct after all.

Over the last two weeks, the exchange rate has indeed climbed, from about $12.25 USD to $13.50 today. Additionally, the network hash rate has begun to drop off, with the first decrease seen in more than six months. The current difficulty is 3,370,182, and the next could very well be south of 3,000,000, as predicted by the algorithms at BitcoinX at the time of this posting.

The question is, what happens next? My opinion is that we should continue looking to outside influences to determine how the next chapter will play out. Evidently, Bitcoin's popularity is beginning to grow rapidly, which will eventually take the exchange rate, and the difficulty, to new highs in the very new future. What we're seeing today is Bitcoin taking a short breather before the next ramp up, so hang on!

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Email Address Fixed

If any of you were trying to get a hold of me over the last couple of months at gowest@thebitcointrader.com, I apologize; the address wasn't working.  It's working again.

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SMS messages not delivered in multiple places

Our SMS service provider twilio, for some reason, has stopped receiving incoming SMS's altogether this weekend. We are looking for alternate provider ASAP.

Edit: now we have implemented Nexmo, and added couple of numbers. THis should help with the situation.

The Localbitcoins.com SMS numbers are: +15813330250 (CA), +43676800505463 (AT), +442033222117 (GB), +46769436195 (SE), +16466994674 (US)

These are all normal phone numbers, which don't have any special fees attached to them. Sometimes there might be problems delivering the SMS's, in this case you should try a different number. 

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I'm Alive!

So, it's definitely been too long since my last post, but I just wanted to let everyone know that I'm still around.

In October I took some vacation from my real job and made my way to San Francisco to meet up with the guys behind 20Mission, including Jered Kenna and Jonathan Ryan Owens. It was fantastic to finally meet some of Bitcoin's personalities in real life, and though they couldn't share a lot of detail with me, it was exciting to hear about some of the projects they have on the go. In the near future I intend on writing up an article on the experience.

Until then, I remain,

GoWest

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SMS Service dysfunctioning in Italy

Some operators in Italy don't seem to transmit SMS messages properly to twilio. Please don't rely on the SMS transaction service if you are doing trading in Italy.

We are trying to resolve the problem as soon as possible.

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