In the world of Bitcoin, the fastest way to get the electronic
currency is still face to face. But such meetings can bring serious
risks of their own. My own experience went very well, and I was able to
learn about some potential red flags when doing in-person Bitcoin
When I went out to buy Bitcoin in person, I asked my
husband to come along for safety. A savvy source urged me to bring
pepper spray, too. Others encouraged me not to go at all.
But sitting face to face with Richard Weston, I felt silly
about all my precautions. A middle-aged man with a good haircut, a
wedding band and a nice watch, his picture could have been next to
“trustworthy” in the dictionary. We met outside a trendy restaurant in
downtown DC like we were preparing to transact the world’s most yuppie
There are several other ways to obtain Bitcoin, such
trading for it over the Internet through an exchange. But right now,
face-to-face Bitcoin transactions are the fastest way to obtain the
currency. There’s no two-week waiting period for your bank account to
connect and verify, as there are with Bitcoin exchanges like Coinbase or Mt. Gox.
I found Weston on LocalBitcoins,
a Finnish company that connects Bitcoin buyers and sellers around the
globe. With buyers in 190 countries and 3,317 cities, it's the widest
reaching peer-to-peer Bitcoin exchange. There are 100+ active sellers in
Washington, DC alone. Richard had a "reputation score" of a perfect
100, which certainly endeared me to him.
Buying Bitcoin Face-To-Face
Since it was happy hour at the crowded bar and I wanted to
do an interview, Weston suggested we move to the nearby hospital’s
quiet cafeteria. (The exchange itself, which takes minutes, could have
been done anywhere we could get a smartphone signal.)
“There’s plenty of security inside the hospital, and the transit police are patrolling the Metro station outside,” he said.
The secure location is as much for his own safety as for
mine. Local Bitcoin transactions often involve large amounts of cash
changing hands in public places, and Bitcoin robberies do occur. While I
figured I had more to lose being the one with the cash, I was
well-aware of the story one Reddit user wrote about being “robbed blind” by a buyer.
After we sat down in the well-lit hospital
cafeteria, Weston told me he’d been conducting Bitcoin transactions in
person for over two years with hundreds of people.
“I’ve sold Bitcoin to people of all ages, men and women, people of all races, including Native American,” he said.
Some of those transactions took place online, but many
more in person. Weston has many regular buyers, some of whom live off
the grid and depend on Bitcoin as their only form of currency.
“Libertarians,” he said wryly.
For my transaction, Weston took out an almost exhausted
miniature legal pad, and carefully pens in my first name, the amount of
the transaction in dollars ($20), and in Bitcoin (0.11912563).
He obtains the up-to-the-second price of Bitcoin on bitcoin.clarkmoody.com, a tracker that uses data from Mt. Gox. While there’s controversy around this particular Bitcoin exchange, which has twice had assets seized by the Feds, Weston swears
by it. It was the first exchange he ever used, from back when he first
discovered Bitcoin through a Washington Post article in May, 2011.
“I’ve always been a fan of cryptography,” Weston said. “I
saw this article and said, ‘This is the perfect use of public
cryptography.’ I spent all weekend studying Bitcoin. That weekend when I
tried to buy it, the price was $6. But by the time I got my money into
Mt. Gox, it was $15.”
Meanwhile, our in-person transaction was concluded in minutes.
As he looks up the price, I have to be quiet so he can
focus. Bitcoin transactions are irreversible. If he sends me too little,
he can just send a second transfer to make it up. But if he sends me
too much, he can’t just call his credit card company to reverse it.
There’d be no way to fix that except for me to give him more cash.
The next step is to confirm my Bitcoin wallet address, a 34-digit gibberish password. I set up my wallet with Blockchain.info
at Weston's recommendation. After he confirms mine, he logs into his
own Blockchain wallet with two-step authentication on his smartphone.
Finally, Weston inputs the amount of money he wants to send to from his
wallet to mine.
I pass the money across the table and watch the bitcoins appear in my wallet in the same instant.
Risks And Benefits
Every week, Weston trades between $0 and $4,000 in
Bitcoin. He makes a slight profit on the fee, but certainly not enough
to quit his job. (Disclosure: Since I bought a very small amount of
Bitcoin, Weston waived his usual fee for me.)
Most transactions go smoothly, but not all of them. Weston
estimates he’s lost $1,000 due to scams. Once a client sent him
counterfeit money through the mail. Another time a bank error on the
customer’s part resulted in the Bitcoin buyer never paying Richard
But he takes it in stride. “Anybody in this exchange business has been scammed once or twice.”
However, face-to-face exchanges become riskier the more
popular Bitcoin becomes. In the early days, Richard used to invite
people to his house to conduct transactions. Today, people are warier,
“they worry they’ll get mugged when they walk in the door.” So instead
he picks neutral, high-traffic spaces like the hospital cafeteria.
And as the price as Bitcoin has risen, Weston has stopped
trading the actual, physical Bitcoins. They're worth way too much now to
be carrying around. Plus, setting up a Bitcoin wallet takes a minimum
amount of knowledge about crypto-currency, ensuring customers have done
some research on their own first. "I don't want to spoon-feed people,"
He also limits seedy transactions by refusing to interact
with anyone he suspects of using Bitcoin for illegal activities, like
buying drugs on the former black market site Silk Road.
“If somebody approaches me and says, ‘I need $300 for Silk
Road,’ I tell them, ‘Sorry, go find somebody else,’” Weston said. In
one instance, he couldn’t prove the buyer was going to buy drugs, but
since he gave Weston a bad vibe he decided not to do business with him
on that feeling alone.
If it’s not very profitable and it’s not always safe, why do it? For Weston, who is the co-organizer of the DC Bitcoin Users’ Group,
the appeal is in initiating newbies into the world of Bitcoin. He’s
currently seeing a spike in new users post-Silk Road, probably due to
Bitcoin’s latest publicity spike. He’s certainly seen a lot of new faces
at the DC Bitcoin Users’ Group.
“The membership probably has a mathematical correlation
between the number of attendees and the price of Bitcoin,” he said with a
Weston deals with a lot of Bitcoin newbies, so he tends to
hear the same questions over and over. How do I get Bitcoin? What do I
buy with it? Where do I store them? And, from entrepreneurs, How do I
use it in my business?
Either way, he’s used to interviews like mine. Not just
from reporters, (he’s already spoken to Al Jazeera and NBC local, as
well as a handful of DC’s omnipresent political bloggers), but from
curious new users.
“Sometimes I talk longer to the customer than I’m talking
to you,” Weston said after an hour. “I want them to be more comfortable
and to understand Bitcoin.”
In fact, he’s grateful for the opportunity to clear up some common misconceptions.
“People don’t understand the reason Bitcoin was invented.
It was not designed to be anonymous. It was not designed for Silk Road,”
he said. “It allows two people to transact across a distance relatively
free of fraud and censorship without a third party you may or may not
For Weston that means donating to causes he cares about,
like Wikileaks, without worrying about any entity weighing in on whether
he has the right to do so. To him, Bitcoin isn’t a wealth scheme, it’s a
“revolutionary new nature” in the way we spend.
“Is it going to take over cash?” Weston asked me. “No. Is
it going to replace gold? No. But it’s definitely going to find a
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