Bitcoin Q&A: Alternatives to centralised exchanges


[AUDIENCE] I liked when you were
talking about ‘the other four billion.’ I have a question about exchanges. In your opinion, what is the best
practice [for building] exchanges? Personally I love bitcoin, but I’m not comfortable with
these “central banks of bitcoin” that we call exchanges. [ANDREAS] Yeah. This question is about supporting the
other four or six billion, depending on how you count. The issue is, exchanges are very centralised and
custodial, which means they hold bitcoin for people. That represents a significant risk, not to Bitcoin itself,
but certainly for Bitcoin users who can lose money. We don’t have too many perfect solutions right now. There are a few small-scale decentralized systems.
Bitsquare (now known as Bisq) is one, still in beta. There are some other decentralized systems. LocalBitcoins allows person-to-person [trades] with cash, similar to bitcoin in that it is [easily verifiable]. It doesn’t depend on any counterparty.
You hold it, you own it, right? Exchanging cash for bitcoin is
the most secure way to get bitcoin. Actually, the best way to get bitcoin is not to buy it. The best way to get bitcoin, is to earn it
[through] the expenditure of your labor. Dedicate your labor to bitcoin and you
achieve two goals at the same time: 1) You are earning bitcoin, from the
people who can pay you in bitcoin. 2) You have removed your labor from the machinery of
the state, which was using your labor to build bombs. That’s my personal philosophy. Two birds, one stone.
I’m in on the good side and out of the bad side.

12 thoughts on “Bitcoin Q&A: Alternatives to centralised exchanges”

  1. Buying Bitcoins at an exchange is fine. STORING Bitcoins on an exchange not so much.
    Buy your Bitcoins, and move your BTC elsewhere. That's what the pros do, if they do not earn their Bitcoins, as Andreas just mentioned.

  2. localbitcoins has central arbitration. unless you leave 0.1 BTC in there to keep you local ad on, and trade outside escrow when you meet up.

    Paxful is similar to localbitcoins.

    bitrated allows a person to select their arbitrator, but it is still a central site.

    mycelium local trader (Android only. iOS is wallet only) is decentralized . no arbitration or escrow.

    openbazaar is also decentralized and you can select an arbitrator.

    a multisig wallet and an ad somewhere would also be decentralized, but not common at all.

  3. I think centralized exchanges have an aspect even worse than being 'custodial'… the fact that they identify you and your BTC trail. This is creating the dystopian tracker-coin that we should all fear.

  4. For developers who enjoy pair programming or tutoring, codementor pays in bitcoin using coinbase.

    I personally enjoy that kind of thing, so it's nice to help someone out and get a bit of bitcoin here and there. I wouldn't bank on it as a source of income since work is unreliable and it's mostly students which I can't in good conscience charge very much, but it is pretty gratifying work, and does add up to something.

    If you're in a generous mood and found this helpful, and would like to give me a kick back, I'll put a referral link on my channel about page

  5. I really respect Andreas's opinions, however I get confused buy contradicting messages. For example: he seems to support earning in bitcoin (removing money from the system etc.), but if you check any answer he gives in relation to investing in bitcoin, he very overtly says not to invest in bitcoin and that he only holds a very small amount of bitcoin himself. So on the one hand he encourages people to move to the bitcoin economy, yet he hedges his advice in case of catastrophic failure. Don't get me wrong, I love watching him speak but I'd like to get a more definitive view from him.

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