Moving into local exchange to prevent attacks on exchanges?

We need more development of person-to-person exchange tools that take advantage of Bitcon's distributed nature.

Centralized exchanges like Mt.Gox are relatively easy to setup and use. People have to cough up intimate personal details to satisfy KYC rules and trust the operators to not lose or steal their money, but otherwise they are a rather familiar model for most people.

Early p2p exchanges like bitcoin-otc had the right idea from the start, but has not evolved into something the great unwashed masses of non-technical people are capable of using.

The localbitcoins exchange is something more user friendly, but also more vulnerable to attacks because of centralization. The recent Florida arrests show that they are on the radar of law enforcement and this type of exchange could easily be shut down by authorities in places like China and Russia. People are also reluctant to exchange in person and any online person-to-person exchanges require escrow and trusted identies. In the case of localbitcoins.com escrow just moves the risk back to a central web site.

A few new efforts such as bitrated are starting to leverage features of the Bitcoin protocol to facilitate truly distributed exchanges. I hope we see more projects moving in this direction.

A few big highly regulated exchanges might work OK for the 1st world, but the more financially oppressed developing world desperately needs person-to-person options before their governments start waking up to what Bitcoin means for them.

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