LocalBitcoins is now generating a revenue of $27 million annually from a business that began operating in 2011, all with an investment of a few thousand dollars. One of the longest-running and most controversial cryptocurrency companies, the website now has roughly 4 million registered accounts worldwide. 40 percent of those users have registered in the last six months.
All that is revealed by the company’s CEO, Nikolaus Kangas who started the enterprise with his brother at a time when there weren’t many possibilities out there for people to meet up face-to-face to trade bitcoin.
The peer-to-peer marketplace, Localbitcoin, accounts for only a sliver of worldwide bitcoin trading volume, as it handled $62 million in trades.This figure may be less than what one of the top-10 exchanges does daily, but the LocalBitcoin service is gaining ground in markets that are ignored by mainstream exchanges.
And, it turns out LocalBitcoins is much needed in the cryptocurrency space even though it tends to be more expensive.
Indeed, Coin.Dance reveals that Venezuelan transactions surged to a record high level this month, as well as usage in Peru and Tanzania – all countries that are trying to recover from banking industry depreciation.
LocalBitcoins‘ trading volume in these three nations combined during the peak week of April 14 was worth approximately $55 million – over six times the amount of U.S. trading on the exchange in the same week.
Also, LocalBitcoins activity in Canada spiked when the Bank of Montreal restricted clients from making cryptocurrency purchases.
It’s these situations that make LocalBitcoins a valuable company, even in an ecosystem where growing awareness of institutional traders and their high-value swaps are taking the limelight.
And that has paid off. According to Kangas, the exchange, which charges a 1 percent fee on every transaction, took in more than €22 million of incomes in 2017, more than three times the amount from 2016.
Despite the market decline since December, when bitcoin’s price rose to $19,783, he said trading volume has continued to increase.
Not always easy
And that fundamental problem was even more evident in 2011 when the brothers first started in on the scheme.
Nikolaus, a Finnish programmer, was intrigued by bitcoin – a new stateless currency designed to take power away from conventional banks, and maybe even governments. But every website he visited that provided services for Finnish traders was terrible in that it was hard to use. The Kangas brothers aspired to change that.So having gathered up a year’s worth of living expenses and with some thousand dollars to pay for the server fees, the brothers started LocalBitcoins.