QuadrigaCX, my long experience, good-bye, and what's next

It's been awhile since I've written, but the reason is I only like to write about things I find particularly interesting and think others will too. It is also very rare I write my thoughts about things publicly like this. I worry that maybe I've overlooked an aspect of something or I'm being unfair, but today I feel confident about what will be typed out loud. Maybe this will initiate a series of more thoughtful posts, who knows.

Getting into Cryptocurrency used to be kind of difficult without exchanges. Typically the best way to get was to get it as payment for a service or product rather than buying it. The users who had it were either miners or people who had the guts to do local meetups or online trading through a reputation system such as localbitcoins. This was after the Mt.Gox era, where Bitcoin had begun to decline over the course of 3 years with no end in sight. Regardless of value, users of Bitcoin are forever: Bitcoin is powerful because of its technological properties, not its USD value.

Getting out of Cryptocurrency is even harder though if you are not the States or Europe. Not only does an exchange need to exist, its trust has to be proven with time through its users. In Canada, QuadrigaCX has been the go-to exchange for over 5 years now. Recently the former CEO, Gerald Cotten, has passed away from Crohn's disease. It is unbelievable as the turn of events happens right at the end of a multi-year court case with about 28 million dollars worth of funds locked away by CIBC. I don't know who is in the wrong here, but regardless - this is not a good position for QuadrigaCX.

The QuadrigaCX experience

At the beginning, QuadrigaCX had over 10 ways to withdraw funds, with reasonable fees and time frame. The most popular were Interac E-transfers, which is a fast way to quickly transfer money online between chequing accounts. Eventually those were disabled because of limits imposed by banks. A few other options disappeared over the years. Then we got to needing full verification for any withdraw option. This in itself I have no problem with. KYC is a necessary for many reasons. Ultimately as an average Joe I just care about receiving fiat to pay for things that don't accept crypto.

The final straw that broke this camel's back were the paid-for express withdraws that took 2x the amount of time as advertised, and as of yesterday, announcing all withdraws are limited to very small amounts, and cancelling all orders that people have been waiting for, myself included.

Essentially QuadrigaCX has crushed themselves.

Just to put things into perspective: after using the service for 3+ years, dealing with ungodly wait times (sometimes more than 30 days for a measly $1,000), slow customer support (one message per day), and shrinking withdrawal options, the only reason to ever use QuadrigaCX anymore is trust.

But trust is not enough to offset everything else today. Today QuadrigaCX is no longer fit to do business with anyone. Based on the recent events also, the restructuring that Aaron M, the new CEO, will have to do, will also affect their business. It is today that I say goodbye to QuadrigaCX and wish them the best, hoping that they will one day come back on top. Unfortunately that will definitely not happen in the next year and possibly the year after. I would put money on that. I hope its parent company realizes this (yes, imagine that - a parent company that equally doesn't care about one of its money makers).

So where do we, QuadrigaCX users, go next?... I'll tell you exactly where.

Decentralized trading: a possibility since 2012.

QuadrigaCX's biggest weakness was using a single payment provider for everything, and extremely bad wait times.

The solution to this is peer-to-peer trading, or simply: localbitcoins.com, at least for now. Notice I'm not making anything a link - I have no intention to make affiliate money or anything. This is a serious consideration I have made and regarding it as the best option for Canadians.

The incentive to use localbitcoins is the following:

• Over $300 less to buy from a localbitcoin trader than QuadrigaCX.
• Online status of at least 20 trusted traders.
• Each trader is essentially a payment provider. No single point of failure.
• The more users on localbitcoins, the stronger the exchange ecosystem becomes.
• Get your money in hours, not days.
• Little to no identification - but identification is recommended to increase trust. The option is the user's. Personally I am identified because trust is what builds the ability to make quick and consistent trades when they're needed.
• Provides a surplus of payment methods, even the most unconventional ones. Hello again e-transfers!
• Liquidity is out the roof: localbitcoins has more money than QuadrigaCX ever will.

Yeah it's basically a no-brainer.

Of course we can't disregard the cons localbitcoins if we want to make a fair comparison:

• It's a centralized system (but so is QuadrigaCX).
• Possibility of scam - but in fairness the probability of this is extremely low when doing a trade with someone who has done +1000 trades and has nearly perfect reputation. And there are many of these types of traders there.

Beyond what's next

So I hope this deters anyone considering QuadrigaCX as of today. Additionally I would love to see a localbitcoins alternative that is fully decentralized, meaning:

• Trustless escrow (possible today with double deposit escrow)
• Decentralized reputation system (exists today already: Augur)
• Decentralized finex trade request system - yet to exist.

Given the tech 2/3rds exists, the biggest hurdle is moving everyone off localbitcoins. 

To me, this is currently not worth the effort and disturbance it could cause. On the other hand if it doesn't happen sooner than later, it could be even worse.

And maybe even harder is finding incentive to do it at all.

P.S. Alternatively, gift cards, or Company virtual currency is another way to exchange cryptocurrency for useful goods. coincards.ca is currently rocking this space. I highly recommend them. Gift cards are the other excellent "stop-gap" measure until cryptocurrency is accepted directly at many stores. Essentially we are trading one currency for another.