How a Large Cash for Bitcoin Deal Goes Down
AJ is a British bitcoin miner who loves privacy and hates KYC. When he needs cash to pay his bills, he meets bitcoin buyers in person. EZ is a full-time bitcoin trader who spends his days driving from city to city buying and selling BTC. This week, the two strangers met to conduct a $20K trade. News.Bitcoin.com watched the deal go down, noting the steps each party took to protect their assets.
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“Is there any way you can do 6-7%,” messaged EZ over Telegram. It was the day of the deal, April 2, an event that had been in the making since the previous Friday. For EZ, it was just another deal. He’d be driving for five hours to meet the seller, and 5 BTC was the minimum he was willing to travel for. For AJ, it would be the largest cash deal he’d ever done by a considerable margin, and he was understandably anxious that it should pass without a hitch.
They’d agreed to a rate of 5 percent below Coinbase price at the time of the transaction. Now, EZ was pushing for an extra two points on the deal, but AJ demurred. “Even at 5 under I’m taking more of a hit than I’m accustomed to,” he messaged. EZ backed down. The plan was for AJ to catch the train from London to meet the buyer in a public location to conduct the deal. I would ride along, for the purposes of reporting the story (the names and locations in which have been changed) and for solidarity – or rather, for backup.
There was no reason to doubt EZ’s integrity – his Localbitcoins feedback checked out, and AJ had spoken to him on the phone twice in the days prior. Nevertheless, establishing trust is essential when handling large amounts of cash and crypto. AJ’s preparations for the meet included sending the 5 BTC to two freshly created wallets, and backing them up in case the deal went sour and his phone was stolen or damaged. He also intended to purchase a UV detector pen to check that the notes weren’t counterfeit. In the event, his local store had ran out, and thus EZ would have to rely on his own eyes to ensure that the banknotes were genuine.
The deal would have to be pushed through in one go. This would be quicker and easier, but it also entailed more risk.
The agreement had been to transact 2 BTC first, then, once trust had been established and the transaction satisfactorily concluded, to meet at the same spot an hour later to complete the remainder of the deal. That way EZ wouldn’t have to arrive clutching the full £15K (~$20K), and AJ wouldn’t have to show a wallet loaded with the full 5 BTC. In the event, the buyer was running late, and by the time he arrived at the bar AJ had chosen for the meet, it was less than an hour until closing. The deal would have to be pushed through in one go. This would be quicker and easier, but it also entailed more risk.
The bar had been selected by AJ on account of its sophistication – it was a plush lounge attached to a five-star hotel, whose patrons wouldn’t look twice at two men conducting business in the corner. There was another reason, though, why AJ had requested this particular locale: he knew the bartender, who would be able to provide an additional pair of eyes – and additional backup, if required.
“What are you wearing,” read the Telegram from EZ, moments after announcing that he had just pulled up outside. We were meeting to trade crypto, but it felt more like we were embarking on some kind of weird blind date.
Two minutes later and EZ walked in, looking as youthful as one would expect of a man whose username contains “98.” In his white shirt, navy jumper and sports watch, he looked every bit the successful business graduate, which to all intents and purposes he was. It was just that EZ’s skills lay in an industry his careers advisor never told him about at school. EZ was only 10 years old when Bitcoin was born, and now he was trading bitcoin for a living, 500 million sats at a time.
We shook hands and then took our seats across from one another. EZ pulled out two phones and lay them on the table. Over the next 45 minutes, they proceeded to ring and buzz incessantly as the young trader controlled his empire. EZ had taken some security precautions of his own, we learned. After AJ showed him the wallet containing the first 2 BTC, EZ explained that he didn’t personally control the wallet the coins would be getting sent to. Instead, he had to phone a friend, who had custody of the bitcoin wallet. This would prevent EZ from getting robbed of both his crypto and his cash if a deal ever went wrong. I suspect EZ also had a codeword that he would use when calling his right-hand man, to indicate if he was under duress.
Reaching into a smart designer shoulder bag, EZ pulled out the first wad of notes, totalling £5,000. They were bundled into used twenties, £1,000 at a time, with the last note folded over and a rubber band holding them together. It felt less like a blind date now and more like a drug deal, only what two were doing was entirely legal: it was merely being conducted away from the prying eyes of compliance officers and third parties.
The price per BTC had been set at £3,000 – 5 percent under the Coinbase price as agreed. AJ counted out 50 twenties, then another 50, then another until the £5K had been counted. It was all there, and the notes looked genuine (though without a UV pen, it was impossible to tell with absolute certainty). Ignoring a middle-aged group of ladies sat at the table next to us, and the waitress who occasionally wandered over, AJ went on to count out £15,000, send two transactions amounting to 5 BTC, and converse about the days when he used to buy bitcoin for £100.
There was a 45-minute wait for the next bitcoin block to be found, leaving both transactions stuck on zero-confirmations for an agonizing length of time. EZ seemed unfazed though, using the opportunity to attend to his constantly vibrating phones. Tomorrow he had another full day of driving, buying and selling to look forward to. Eventually, the transactions cleared, the two parties shook and they went their separate ways, vowing to meet again in future.
AJ awoke the next morning, relieved that the largest BTC deal of his life had gone off without a hitch, but with mixed emotions at the realization that bitcoin had rocketed by 20 percent overnight. With enough cash to fund his living expenses and mining costs for the next few months, however, he professed to be pleased. Now he could start stacking sats all over again.
Have you ever bought or sold bitcoin for cash? If so, what precautions did you take? Let us know in the comments section below.
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