The local coin is a coin managed and distributed within some certain, often closed geographical area. It is a general term describing potentially any cryptocurrency. While Localcoin is a new player in the field of cryptocurrencies focusing on the true meaning of decentralization, tackling bottlenecks of many of its counterparts.
But first things first. Before diving in, let’s have look at basic terms that we shall operate with, in this article, for a better understanding of this brand new crypto player.
Starting with a decentralized blockchain system and its functionalities as it is the main pillar of the LocalCoin and its advertisement.
Decentralized blockchain system – How does it work?
The decentralized nature of blockchain technology means that it doesn’t rely on a central point of control. A lack of a single authority makes the system fairer and considerably more secure (the data are simply spread around and are constantly being checked and changed).
The way in which data are recorded into a blockchain shows its most revolutionary quality: its value of decentralization.
Rather than relying on a central authority to securely proceed with transactions with other users, blockchain utilizes innovative consensus protocols across a network of nodes, to validate transactions and record data in a manner that is too hard to corrupt with nowadays technology. As a blockchain is a ledger of information it is extremely important that the information being stored is honest and accurate.
Decentralization removes part of the power from central authorities, reducing possible corruption of systems, power abuse, and single-point collapse. However, this system has also its less bright side, that every participant is taking on a piece of responsibility themselves.
Not all exchanges are true to their nature
At the time being, an inadequate number of decentralized exchanges operates as a guarantee vouching for a democratic system. They commonly promise security, control and global marketplace, however, they have a fair set of drawbacks such as lack of transparency, insufficient liquidity levels, small trading volume, are misconfigured towards ineffectivity, and slow transaction speed rarely increases.
Furthermore, it is required to be already proficient with their software to be able to trade.
So what are the problems Localcoin tackles? Trust and transparency combined with bad interface
The current decentralized market lacks integration, trust, and transparency as well as efficiency. There are still too many middle-men. From the history class, we know that those are becoming more and more redundant, as the market strives for higher efficiency.
And this is also the next step in the cryptocurrency industry initiated by LocalCoin.
In the beginning, the blockchain promised to cut down the middlemen by simply placing everyone involved in the role. However, cryptocurrency exchanges which are centralized have broken this promise. And not only them. There are currently not only exchanges and coins, but also companies hiding behind a mask of „The Blockchain“ while being fully centralized entities abusing often naive crypto fans and investors.
The bad side of traditional banking in the crypto sphere
One of cryptocurrencies main characteristic is decentralization, with no central body controlling it. The wider public begins to dwindle into cryptocurrencies, perceiving governments and banks, which control and manipulate fiat currencies, malevolent.
And exactly that is what happens also in cryptocurrency field. The hacks, the manipulation, corruption, charges, and more abuse from the ones in power (also called Crypto Whales). Those and more are the determined elements bringing the “evils“ of the traditional banking system.
Another of the issues connected to trading cryptos is not so friendly user interface. Often decentralized exchanges are far from intuitive, leading to errors in placing orders and withdrawing funds.
Like it wouldn’t be bad enough for a beginner to start trading. Even some popular decentralized exchanges can really destroy your day with a bittersweet feeling of your first purchase, only to realize you did not exactly buy what you had in mind.
Users have been known to place incorrect orders because of poor interface and difficulty of navigating the system. This acts as a barrier to adoption and leads to loss of money.
How is LocalCoin distinctive?
LocalCoin is owned and run by everyone, as a truly blockchain platform. It is built as a decentralized community and uses technologies that enable to build a reputation in the online world one can trust. But there are more LocalCoin promises to achieve. It doesn’t only try to meet the ideological criteria for a decentralized exchange but also works its way towards the user-friendly interface, for which it gets a bonus point from us. After all, it should be available for everyone, right?
Furthermore, it promises to deliver efficient and quick transaction processing.
The platform uses three distinct types of transactions
1. The local transaction between different accounts of the same cryptocurrency.
2. The same protocol-based transaction created off the same protocol but between different currencies.
3. Cross-chain transactions of different coins with a different protocol.
Multi-Purpose Super Wallet
LocalCoin utilizes a super wallet that supports asset management, self-service transactions, payment, secure chat, social media and more.
We have asked LocalCoin creators, how is their user experience going to differ from other platforms, as it is their key propagation element:
„Few things are more critical for widespread adoption than successful user experience. As mentioned earlier, an attractive and usable UI (User Interface) is often overlooked by the majority of blockchain technology projects. In recognizing this, LocalCoin has entrusted its frontend design to one of the best design company in the industry. Traders will be able to use and experience a great, intuitive UI.“
A decentralized system is supposed to be responsive, based around needs of the community without a having to sacrifice decentralization principles (which is important if the community shall be widespread – another key element of the platform). To achieve this, LocalCoin uses a decentralized governance voting system they will post us about later.
Network growth through rewards
Loyalty programmes are widespread across a whole developed world among smart mobile phones and are important propagation tool for retailers. Some interesting data about loyalty programmes:
- Deloitte’s 2016 Holiday Survey states that only 1/4 mobile phone users make mobile payments using a store app, and even fewer, some 13 %, use mobile wallets for in-store payments.
- Also according to Points’ State of Mobile Wallet Loyalty and Engagement in 2016 study, 94% of consumers would use mobile wallet apps more frequently if it would deem benefits for loyalty.
- Loyalty app users participate in a variety of loyalty programs offered by pretty much anyone who is willing to deliver the slightest advantage. As the latest personal experience, McDonalds Malta gives a free portion of french fries to anyone willing to download their app. I was happy to snack my free fries. A study suggests that 72 percent of users participate in between one and five loyalty programs, which can make it uneasy for them to keep on track of all the various rewards systems.
But how is that all connected to the LocalCoin? This new crypto has a strong referral program built directly into its software, which increases the value of the whole system. How?
Networks often derive their value primarily from their networking effect: more people on the same network increases the value of that network for everyone, for instance, look at an example of social networks like Youtube, Facebook or Twitter.
LocalCoin capitalizes on this by rewarding those who sign up new users, and does so in a fully transparent and automated way, similarly to platforms as Coinbase, which offers 10 USD (or equivalent) to you if you invite a friend who accepts the invitation, and 10 USD to you and your friend if he charges to his account at least 100 USD equivalent.
So what is it truly new that the LocalCoin offers?
As the platform works as a decentralized bank, nobody can actually block your wallet or request your ID.
Blockchain-based fully encrypted decentralized personal and group chats, moving the true meaning of decentralization a bit further.
With LocalCoin platform you can start your own ICO. You can issue your own token and list it for trading in just a couple of minutes. We stand a bit skeptical towards this feature as the market is already flooded with low value, low-quality crypto items. There is currently 10x the number of cryptocurrencies than real-world currencies and adding more to the market can cause a devaluation of them all, if not straight away get them banned due to governmental issues to control them all, as it happened recently in China.
To support this feature LocalCoin created another one to allow you running your own cryptocurrency exchange website based upon the blockchain decentralized platform (The DAO) with a pretty simple setup.
Accounts are private thus nobody can really track you down. This feature is not first of its kind, yet adds value to the platform as a whole as it is not yet commonality. In some exchanges, or even countries, such as crypto capital of the world, Soul, South Korea, crypto is fully checked by the government, and every account is based on person’s ID (e.g. passport) to avoid theft and fraud.
Everyone can mine LLC by running a full node to support the network, as is already a standard feature.
This announced feature of LocalCoin is still a bit of a mystery as we can hardly imagine how would it work. The LocalCoin’s creators comment, that:
„Blockchain based and fully encrypted decentralized Social network. Forget about Facebook, Google or twitter tracking, blocking or annoying ads. True democracy supported by blockchain network.“
Decentralized trading, with a high volume of transactions
From the beginning, one can trade practically without limits, represented by 100k transactions per second. Block generated every 2 seconds. From a practical standpoint view of real human, the sky is the limit here as most of the bots aren’t even able to trade this fast, not talking about human being.
Live Charts right in your account dashboard
Ever wondered how to make your life and analytics easier? Then you’ll surely appreciate the advanced charts feature built-in right in your dashboard with all the variety of technical indicators with the ability to create new indicators based around your needs.
The same as the previous feature works with your GUI (Graphic-User-Interface). The drag-and-drop feature will then make your life designing a heck of easier as the platform resizes dynamically. Compatible with multi-screen desktops and fully responsible.
Risk management is an essential feature for reasons known to anyone who ever traded crypto – the market is volatile. So volatile that it can happen in single hour crypto go up or down by 10% without problems. It is then very normal to fluctuate by +/- 5% every day. That is why you can get real-time alerts and define high-priority issues. Configurable order routing and stop loss and real-time margin calculations.
There are more
The LocalCoin with all their features would be enough for a whole book, so we have to stop at some point. Honorable mentions of features advertised by the company are:
- High performance. A liquidity-ready trading platform to help you launch a cryptocurrency exchange business within 2 weeks. Over 1500 coins, fiat gateways, stable coins, and unmatched security and localizations — all included, without investing heavily in development and infrastructure.
- Scalability. Increase your revenues by implementing new crypto and fiat gateways as well as fees, to grow-as-you-go.
- Flexible engagement models. The Localcoin came up with 3 engagement models, each with a different level of control and risks implied.
You can start small and then switch to a more suitable model as your crypto business grows.
Tech takeaways – hot or not?
Hang on, this is not technology, is it? We know, but interestingly enough at the LocalCoin company it is being advertised as a piece of technology, so let’s have a look at what it actually is. The mechanism of consensus is an activity by which groups (organizations) of people decide upon unitary (possibly rational) action.
The process of consensus decision-making allows for all stakeholders to share their preferred resolution, even if it is not the favored course of action for each individual participant. In theory. In reality, it is often a golden middle road, where to get all interested parties to have to develop in a certain way.
Bitcoin was the first system to integrate a fully decentralized consensus method with the modern technology of the internet and peer-to-peer networks in order to more efficiently facilitate the transfer of value through electronic communication. What they did not realize is that when the site cannot reach consensus, it can lead to a split of the network into two, such as in a case of Bitcoin and Bitcoin cash.
The proof-of-work structure that secures and maintains the Bitcoin network is one way to organize individual units not trusting one another to act in the best interest of everyone interested.
The LocalCoin ecosystem employs Delegated Proof of Stake in order to find efficient solutions to distributed consensus decision making, which is another way of determining the consensus.
What is Delegated Proof of Stake?
A blockchain engineer named Daniel Larimer realized that Bitcoin mining was too wasteful of energy. He also recognized that Bitcoin mining would become centralized in the future, with giant mining pools being in control of the Bitcoin network. Additionally, he wanted to build a system that was capable of transaction speeds like 100,000 per second.
Bitcoin’s system was too slow due to the way it was designed and the system is used: Proof of Work. He decided to invent and build a new system that used very little energy, was lightning fast and also very secure. Dan named this new system, Delegated Proof of Stake, or DPOS.
How it works
A node can simply be understood as a computer that plays a part in ensuring the integrity of a coin network. The crypto space is not only decentralized but also distributed; therefore it functions by several people running nodes from different parts of the world. That said, you require a full node to host a copy of the Blockchain (coin’s ledger) and thus support the network.
A Masternode is a crypto full node (computer wallet) that supports the network by hosting an entire copy of the coin’s ledger in real time. In return, the Masternode will receive crypto coins as a reward. It is an alternative to mining costing less energy in return.
Zero-knowledge super-secure transactions. That means you can place blind transactions from your account to a secret account that cannot be viewed via any block explorer.
Localcoin claims that they don’t have access to your account, simply because it is only the user who holds a (supposedly secret) key to it.
Decentralized exchanges allow you to control your assets at any given time. They provide a personal key and allow you to pull back your funds from a smart contract, should you decide to cancel the transaction.
Interested in the LocalCoin? Join its ranks here.