My vision about Bitcoin exchanges

Off-topic: lame chargeback services of the past

Even though I believe in future of decentralization, I don't deny many of central services which may be important before we haven't got firm decentralized solutions. But In one of my posts I've already told that I'm advocating fiat money backed by Bitcoin in some government which could make Bitcoin a national currency as the most efficient off-chain form - I'm telling you about this so that you could catch my spirit - "fake it until your make it" or having at least some imperfect structure before we build something perfect. For example people still was ready to use not fully decentralized SilkRoad, even though the righter solution would be having all of the SilkRoad structure in the cloud in a decentralized form.

Bitcoin has serious problems with convenient exchanges. You may find out that true Bitcoin experts & believers are still expecting that someone will come up with the decentralized solution for exchanges. But while we are experiencing some difficulties with development of such apps, why don't just use some service like LocalBitcoins.com? Yes, I know they have that odd rule saying that 0.4 BTC must be loaded on the LocalBitcoins web-site which is required for selling your Bitcoins, and they could easily run away with your funds if they would wanted (the same way MtGox did, since you had to hold your funds in order to efficiently exchange them).

But why I mentioned exactly LocalBitcoins.com? Because at least when you use it as a user, you are safe! When you need someone to exchange your funds for convenient local electronic system it is perfect. Let me give you few great examples:

• Exchanging Bitcoin for OkPay
• Exchanging Bitcoin for WebMoney
• Exchanging Bitcoin for other local system of payments.

The whole business model is about using private money sending as the way to perform exchanges from Bitcoin to fiat and back. Every country in the world now has access for some tool which allows its citizen to transfer funds domestically within its own country. And LocalBitcoins has a very reliable escrow model, which allows you to trade Bitcoins to Fiat with almost 100% risk free!

Don't confuse it with exchanging Bitcoin locally: where you have to meet the Bitcoin buyer/seller. I'm talking about LocalBitcoin's ability to transfer funds within the wallets in some system (e.g. in CIS there's very convenient payment network called QIWI, TCS, and most banks offering immediate payments within their Internet Banking mobile apps).

This post starts with the words "My vision..." and that's my promise to explain why do I think that LocalBitcoin-like services has the future for exchanging your coins. Here's my reasons:

• Reason #1: Mobile market. Imagine that all you need for exchanging Bitcoin for your national currency, is 2 (two) iPhone/Android apps: 1st app: YOUR INTERNAL PAYMENT SYSTEM (Could be some Internet banking app provided by your bank for your convenience or any other mean of internal funds transfer with 0% fee); 2nd app: YOUR LOCALBITCOINS APP: the escrow service which holds your funds during those short time while you're sending/receiving funds from Internal Payment System. If both of those apps are functioning on your phone, then you have fast, reliable, risk-free and flawless way of converting BTC to your local fiat currency. Really convenient, fees are so low! And most of the times its very fast. In case with iOS, you if there's no app, you can use mobile version of both web-sites (LocalBitcoins + Internet Banking). And that's groundbreaking! Why? Because there's no one who's gonna control internal payments and there's very few reasons for blocking small payments between 2 individuals willing to send each other funds locally, especially when both of those individuals aren't using anonymous wallets, they are using their identities to come to the bank and get the e-account by using their IDs/passport data (most of the time you need those when you're opening your Internet Banking account).
• Reason #2: Too big commissions at central online exchanges
• Reason #3: Verification - most countries need exchanges comply with law and regulate the online process of transferring funds to/from Bitcoins, registering on any exchange now is so bureaucratic and sometimes the whole complicated process gets in your way of purchasing something online through Bitcoin. 
• Reason #4: Trust problem - you always have to trust different exchanges when you're switching them a lot. With services like LocalBitcoins you only need to trust to LocalBitcoins which gives you access to variety of the participants.

I will build a bridge above you

or I'll tunnel underneath you

I will eat you and excrete you

and I'll feed you to the flowers

If I need I'll go through you

and absorb your fucking powers