Coinmesh plans to develop an open source map based application for iOS and Android, to find nearby users who want to buy or sell Bitcoin for cash. The app will permit searching for local users with opposite currency exchange requirements and suggests a meeting time and place. Users will be pseudo-anonymous thanks to a decentralized protocol over Tor, with no records of meetings or exchanges.
In other words, a Tor-enhanced, no-log real-time version of LocalBitcoins. The u99 Group is trying to crowdfund the development of the app and says that the app can be developed in four months if there is enough interest and support (no minimum funding requirements specified). You can contribute with a donation via the Coinmesh website. They claim to be a group of “nine cryptographers and software developers,” but give no more information. However, they certainly have a good defense of the importance of their planned development:
Governments fear Bitcoin. They have a strategy to control it that is based on regulation and reporting from the exchanges. This app is designed to make convenient and pseudo-anonymous currency exchange possible directly between individuals and therefore bypass the exchanges altogether. In addition it undermines the business model of franchise kiosks that overcharge.
Trading Bitcoin for Cash in The Street
The government can’t do much to control and punish transactions in Bitcoin between individuals using basic privacy and anonymity measures. It’s only when the bitcoins must be taken out and exchanged for fiat currency that the persons involved become vulnerable. If fact, exchanges are subject to more and more regulatory pressure, and forced to comply (or else). It is easy to predict that compliance requirements on exchanges will become more and stricter.
The only safe way to buy or sell Bitcoin out of Big Brother’s sight is to transact in person, for cash, with no electronic trace left. I think cash is the last bastion of privacy, and I am persuaded that we must protect the Bitcoin underground of anonymous, untraceable transactions.
In the example in the video the Coinmesh app directs a Bitcoin holding user to meet a nearby dollar holding user so that they can make an exchange in a coffee shop. Coinmesh can optionally act as a Bitcoin wallet and automatically runs bitcoin payments through a tumbler before they are sent. The app can show a moving barcode which transfers both a digital signature confirming the users pseudo-identity and a temporary Bitcoin wallet where the user can receive funds.
I think the Coinmesh app, once it’s developed and deployed, might be quite useful in cities with a critical mass of Bitcoin users. Trading bitcoins for cash in the street is not illegal yet, but I am betting that someday soon it will be. Of course, the authorities are not stupid, so there is always the possibility that one of the two characters in the video is a cop under cover.
How to protect Coinmesh users from cops under cover? What do you think of Coinmesh and anonymous Bitcoin trading in the street? Comment below.
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