Centralization of decentralized crypto currencies
My experience with buying a bitcoin:
I have been playing around with the idea of crypto currencies for about a year now. Between mining, cloud mining, exchanges and wallets, I have had to learn alot. However, my oddest experience has been with the idea of buying BTC with fiat currency. In 2016 when the bitcoin was $250, I was deadset on investing in it. I actually had decided I wanted to invest $10,000 and buy myself 40 bitcoins. Oh there was a line of people waiting to tell me how stupid I was and I would be throwing my money away. What is this digital money mumbo jumbo. I spent hours on end trying to convince them that it was an emerging technology, a game changer, etc. All to no avail.
So, I decided I would brush off the negativity and buy in.
Spoiler: I too adopted a very negative attitude about bitcoin. And I did not turn my $10,000 into $100,000.
Why you may ask? Well, let me tell you my friends :)
See, I dont live in the land of the free and home of the brave (USA). In fact, I dont live in what many would call the first world. So, I quickly found out that it was very hard to buy bitcoin.
First I tried Coinbase. Oops, no can do...not in the US.
Second I tried a variety of ways that all failed. So I gave up eventually. And I was frustrated and dismayed seeing as I am actually an IT Savvy individual.
So at about the time the bitcoin rose to $600 I started looking into buying again. I had also started dabbling in mining which I will cover in another post.
I landed at LocalBitCoins. However, it too proved to be a tough job. There was no one locally that I could physically meet up with and many sellers required photos with my id and all kinds of identifying information. Who are these people? I dont know them? How can I trust some dude in Romania, Canada or timbuktu asking for my photo and national ID? No way!!
But I needed to buy at least one bitcoin. So I finally chose a seller with a good reputation. Submitted some identifying documentation (which felt weird, wasnt it all supposed to be private?). And I wired him $650. At the time, that was well over what the current cost was but I had no other choice. I was so anxious, but the good news is that it worked. I finally had my bitcoin! Wooah! But I definitely was not going to spend $10k this way and over pay for my btc...looking back, maybe I should have :(
Fast forward to the crazy ride in June and I now wanted to invest. Since Poloniex does not accept fiat currency, I decided to go with Kraken.
I signed up to Kraken and lo and behold, I was again in an odd situation. Because of where I live, I cannot simply get away with plugging in my full name and address. I need to give them all kinds of documentation about myself. I need to get one of their highest tiers...short of giving them my firstborn, it was ridiculous. I loved the idea of decentralized currency that can disrupt so much that is wrong with the world today. Yet, as the bigwigs get into this space, we find that we cannot get away from binding ourselves to the system to be able to invest in crypto.
I just find it weird that you cannot simply buy btc easily...you have to go through the very institutions BTC is supposed to be rebelling against. The centralization of a decentralized currency.