There's a cool European (Czech, really) app that's owned/run/bankrolled by the Trezor maffia in Prague: They're awesome, their merch and messaging is dope, and what they offer is a good old-fashioned anonymous marketplace, most for fiat-to-bitcoin (but really, anything can be traded there).
When I was last in Prague I thought I'd finally try it.
By definition, peer-to-peer is economically inefficient. Bitcoin as a messaging/money system is also inefficient but we do that for a reason, willing to trade off the expense and tech and speed to achieve other, higher ends.
The big problem of peer-to-peer mechanism is that centralization is (economically) efficient.
With a middleman, a seller doesn't have to be online or processing the transaction at the same time as the buyer. We don't have to coordinate, but the middleman — against a cut and loss of sovereignty/independence, obviously — can spread out the transactions, literally match buyers and sellers by trading with them sequentially.
Plus, as is more obvious in terms of various fiat currencies moving across the world or banking systems settling daily, delayed net settlement is efficient in that you can just net out the difference rather than (ex)change every single unidirectional trade.
Peer-to-peer markets in Bitcoin, for various things or as non-KYC corn, have the same trouble. The fact that they sort of kind of work right now is testimony to the extra length to which many hardcore Bitcoiners value their privacy (paranoia?) or want to test out various arrangements, money-where-your-mouth-is, that aren't that common. Be the change you want to see.
So, I spun up the app, matched with some local Czech money drug-dealer, and arranged for a meet-up some 20 minutes away from where I was staying: great time for a morning jog.
Up I went, ran over to the rendezvous point... and waited. Felt like a total drug dealer, meeting some random dude I don't know what he looks like or what his name is — the way it's supposed to feel?
A few minutes later he showed up, and I got something like 3,000 CZK (~150 dollars) in cash, in exchange for a quick Lightning transaction over to him.
No name, no traceable transaction, no centralized middleman.
That's cool. That's edgy.That's cool. That's edgy.
Now, the bad stuff:
First, for all of this to work, both him and I need to take some time out of our day: me having to run 20 minutes (on net, it just acts as an incentive to go for a run, but still); he, having to get off the tube during the morning commute to do a monetary drug deal.
Second, since he never knows when and where he's gonna be able to land a trade like this, he must carry cash well above his own needs to able to trade on a moment's notice. And I could tell: he carried thousands of extra CZK cash, ready to be stolen or expropriated or asked odd questions by police officers if found out. From a regular economics point of view, his opportunity cost is the interest he could have earned on that... or in a Bitcoin world, the opportunity cost of bitcoin increasing in value. Basically, for the trade to work and there be enough liquidity in the (local) market, a bunch of Bitcoiners need to hold a bunch extra fiat just to hand them over to other Bitcoiners. Structurally quite bad.
Third, the transaction costs were awful. First, it cost me some 2% in the wallet miscalculating/diverging from market prices... didn't stress it, just wanted to try this thing for a small amount. Then Lightning tx fees, and then almost 3% in the BTC/USD (well, CZK, but amounts to the same thing) misbehaving in the process, i.e., between us agreeing to the trade the night before and realizing it the next morning, price had moved that much against me. (Fucking pathetic bitcoin, but whatever.)
= in expectation, this is as likely to go in the other direction, so economically speaking and over time this ought not be considered much of a cost — other than short-term annoyance and uncertainty. (Plus, my loss is his gain, so whatever).
The kicker? We made this trade at $109,000 or something, the price having bounced from 107k... and then collapsed to the loser levels of the 80s and 70s we've been in. So technically speaking, my fiat held its value AMAZINGLY compared to this rubbish orange dream.
Second kicker to potentially justify the entire ordeal? I didn't use all of those CZK, had about 1,000 left when I traveled to family in Sweden.
In this digital society, one does not use much cash — certainly not of a Czech calibre. Easy, I though, I'd just go to a local currency-exchange and be expropriated on the rate but at least I'll get some non-KYC cash here, no?
Wrong.Wrong.
First, they fucked me about 6% on the FX spread.
Second, they charged a $6 "admin fee," eating up even more of the tiny leftover cash I had
Third, lady required me to insert my driver's license in a machine to identify myself.
Why, I asked? It's only a pittance of money
"YES!" she aggressively retorted, "we're operating under money laundering laws, and we gotta make sure we know who's exchanging money!" I looked at her puzzled, glanced down at the fifty bucks' worth of fiat between us and wondered however this small amout could fit into that "YES," she said, noticeably annoyed, "otherwise people can just hit all of our offices and illegally transfer money everywhere!"
Just wowJust wow
Also, everything that's wrong with the state of economics and the state and ideological/cultural convictions is contained in that phrase, "illegally transfer money." What tha fuck do you think money is, what tha hell is your understanding of "illegal"?
All the transaction costs, price costs, opportunity costs and other inefficiencies involved in peer-to-peer are worth it RIGHT THERE. The laws governing this lady's job, the fact that she has a job at all, and the scammy infrastructure that enables (read: parasitising) on money exchange altogether, are so evil and dumb and regressive that it's worth lots of inconvenience to get around it. Fuck me.
Typically, you should have a common contact with the counterparty.
Why? Because both of you have a real-world reputation to uphold. If you do something bad, you rat them out to the common contact.
People are naturally protective of their real-world reputation.
Though the group feature skips the common contact.
Also, you could have sold to CZK for BTC on Vexl.
could have, but I intended to spend them...and when leaving it wasn't like I had a ton of flexibility to arrange a Vexl meet
This is a great write up. Having experimented with a few different ways to buy btc peer-to-peer, my experiences align with yours.
Often it feels like an all or nothing game. If you aren't gonna only by kyc-free, then you might as well never buy kyc-free (at least this is how my grinchy little mind works).
Last year I succumbed to using kyc'd means for converting to fiat to bitcoin and it seems to be cheaper p2p methods (definitely takes less time).
Probably getting paid in btc is the best, though.
Nice write-up.
I just didn’t like the framing/rhetoric of it being a “drug deal” even though I understand the writer was being sarcastic.
The words we use matter.
I agree getting paid in BTC is best.
But the people that are paying you really do know their customers, so that's also something to think about.
Thank you for sharing. My experiences so far are very different. I regularly sell BTC p2p, I find buyers through Telegram and rarely Vexl, usually people from within the community that I vaguely know. We agree on the price at the time of the trade, always trade at market rates, the sender of the BTC covers the fees.
My issue with Vexl is that it's hard to add friends there, and as a result it's super hard to get visibility of your ad, or see other ads.
What is great is finding a reliable counterparty through a P2P trading platform and just using some chat/messaging to arrange subsequent trades.
The problem for Vexl and others is that these services then don't get fees for these later trades, even though they had done the initial matchmaking. And worse, these platforms show less liquidity because you then have your trusted trading partners on Signal or whatever and aren't posting trade offers at all anymore. Without that liquity, others looking to do their first in-person P2P trade(s) get frustrated as there are few offers that remain and the rates offered are not that great.
So the platforms themselves never reach all that high levels of trade volume, nor liquidity in the offer books.
But it all still works, somehow.
Vexl doesn't care about getting fees. They're a non-profit.
Ohhh ... I did not know that.
I see there are donation methods:
I know a lot of Czech Bitcoin peeps have their repeat dealer, coming by at regular intervals and just DM -- match-process to find a reliable partner is once only
Use bitcoin as p2p electronic cash as intended and keep your hands clean of filthy fiat and you're good.
The real takeaway here is that peer-to-peer systems exist in deliberate opposition to the comfortable efficiencies of centralization. People often misunderstand this trade-off because they compare P2P not to the actual operating costs of centralized systems but to the illusion of frictionless transactions that centralization presents. That illusion is propped up by layers of regulation, hidden fees, custodians taking their cut and a compliance machinery designed to surveil and control the flows of value.
Your experience underscores that inefficiency is not a flaw but part of the point. The inconvenience is the cost of sovereignty. The time spent, the risk assumed, the liquidity constraints—all of these act as the real price of keeping intermediaries out. When you meet someone in a park to swap currency without a filter between you and the other human, you are in effect buying control of the transaction itself.
The state has built vast infrastructure to ensure that every taxable event, every recordable movement of money, is captured and indexed. This is dressed up as anti money laundering but in reality serves as anti autonomy. Centralized exchanges erase the waiting and the jogging but at the cost of making every transaction part of their ledger, their reporting system and ultimately their compliance with whatever government demands.
From a straight economic perspective yes peer-to-peer is cumbersome. It requires those willing to carry excess float. It introduces slippage in exchange rates and exposes participants to volatility in a much more immediate way. Yet these inefficiencies are actually the moat. They keep out the passive yes-sayers who accept tracking as the cost of convenience.
Yessir