The cryptocurrency industry is often compared to a gold rush in the Old West due to its mystery and ability to make people rich. In the gold rush, the ones that made the real money were oftentimes not the ones searching for gold, but the businesses supplying them with tools and equipment.
Fast forward a couple of hundred years and whilst many people believe cryptocurrency profits come from mining or trading, they often overlook brokerage.
What is a Bitcoin Broker?
In simple terms, a broker is a middle person between a buyer and a seller. A crypto broker fits this description perfectly, as he or she buys currency from one individual and sells it, at a profit, to another individual.
Having the role of a broker in a blockchain-based environment might sound counter-intuitive, after all, the entire scope of the technology is to remove these middle persons. However, brokers can provide trust and stability in an increasingly suspicious web community.
A Broker on LocalBitcoins
LocalBitcoins is a peer-to-peer cryptocurrency exchange platform that presents a great opportunity to anyone venturing into the brokerage career. It offers a variety of tools and features which can aid you to set up and run your business with very little start-up costs. There are plenty of advantages to becoming a crypto broker on LocalBitcoins, including:
- No setup or registration fees
- Thousands of potential clients on the platform, both buyers and sellers
- Low transaction fees
- Free escrow service
- User review and ratings
- Simple design and navigation
Becoming a LocalBitcoins Broker
These are the steps to follow if you wish to start a business as a Bitcoin broker on LocalBitcoins:
- Research legal requirements – depending on your country of residence you may require a special license to work as a broker. Whilst you may get away with not calling yourself a broker for the first couple of sales, be aware that tax authorities are becoming very attentive to individuals making money from the cryptocurrency industry.
- Open an account with LocalBitcoins – this is probably the easiest step to follow. Opening an account is very easy and quick. Be sure to complete your profile and be fully verified, as otherwise you risk alienating potential partners.
- Search around the platform – the biggest mistake you could do as an enthusiastic new broker is to start buying Bitcoin without any research. Get acquainted with the platform and understand the different search and filter options, as well as the different payment methods and support measures, such as escrow and conflict resolution.
- Fill a demand – as a broker, you are a problem solver. Have a look at both buyers and sellers and seek opportunities where you can make a difference. For example, perhaps a seller would not sell to an individual whose profile is not completed, so you could act as the missing link. In another case, maybe a potential buyer cannot use the payment methods outlined by a seller, so you can buy the coins and then accept the payment method suggested by the buyer.
- Keep a positive reputation – if your reputation on LocalBitcoins is negative you will not have much success as a broker. Keep a positive reputation by treating your partners well. Often, reducing your profit is more worth it than reducing your ratings.