LocalCoin Accounts

In LocalCoin, you can create an account relatively easily by using the LocalCoin UI wallet. The account comes with the Private/public keys. You should keep the information safe. Also, LocalCoin account gives you some benefits (i.e., Lifetime Membership (LTM) and Referral Program) and important roles (i.e., voting). We recommend you to read through LocalCoin Accounts information to learn more.



Account

In LocalCoin, you can create an account relatively easily by using the LocalCoin UI wallet. When you create a LocalCoin Account from the UI wallet, it will ask you to provide a unique Account name and a password. Although you should create a strong password, you can create readable and memorable LocalCoin account name. You do not need to write down a long random number as your account name. The LocalCoin account name would be helpful to identify other LocalCoin accounts.

It’s important to understand that only you know your password, and no one can recover it. The account information is registered to the blockchain with private/public keys of the account. Only the account creator knows the password and finds out the private keys. In LocalCoin, there are three types of keys (i.e., active, owner, and memo key) which you can find them in the UI Wallet Permissions page.

UI Account create

LocalCoin UI Wallet

If you create an account at one of LocalCoin partners, the account name will be available among LocalCoin partners. So, you will be able to use the LocalCoin account name to communicate (e.g., sending fund) with other LocalCoin account holders like sending an email. The advantage of using account name is you, and other people can identify the account holder.


Identifier

When you create a LocalCoin account, LocalCoin registers the account name to the blockchain and also assigns an incrementing identifier (account id) during the registration. One way to find your account id is to go to a LLC.is and search your account name. You will find your account id under your account name.

The identifier comes with many advantages: Besides improved scalability, we have separated the identity from the transaction authorizing signature. In practice, owning an account name is autonomous from being able to spend its funds. Furthermore, both rights (we call them permissions) can split among an arbitrary complex relation of people (we call them authorities) using weights and required thresholds.

To separating authorities from identities, LocalCoin can be much faster in processing delay while having much smaller transaction sizes. All participants are forced to have a named account on the blockchain. Also, most transactions are tied to the account name and can be linked to individuals (this includes transfers, trades, shorts, etc. but not stealthed transactions).



Memberships and Groups

Memberships

If you just created a new LocalCoin account, the account would be a Basic member account as a default.

LocalCoin has created a Lifetime member (LTM) account to give the option to all LocalCoin holders. The Lifetime Member get 80% cashback on Fees! If LocalCoin holders desire to profit from reduced fees and additional features, they might want to consider to buy Lifetime Subscription.

To see your Membership stats on LocalCoin UI wallet, go to your account and open a side dropdown menu and select Membership stats. You will find the current membership upgrade fee to become a LTM.

Membership Groups

group type

note

Non-Members

(Basic member) A regular account is a non-member.

Lifetime Members

Lifetime Members get a percentage cashback on every transaction fee they pay and qualify to earn referral income from users they register with or referred to the network. Lifetime membership is associated with a specific one-time fee that is defined by the committee. Lifetime member (LTM) status can register an account. If you want to do so, upgrade the account.

Annual Members

If a lifetime membership is too much you can still get the same cashback for the next year by becoming an annual subscriber for a smaller one-time fee which lasts for only one year.

Note

Technically, the fees that you pay stay the same, but a part of the fees is refunded in the form of a vesting balance. Once the fees have vested you can withdraw them.

To see your vesting balances, open the side dropdown menu and select Vesting balance. Vesting balances are recalculated hourly, so you might not yet see them right away.

Warning

Due to some discrepancies, the annual membership has been disabled in most web wallets and will be re-enabled after a proper update eventually.



Fees

Fee Division

Every time an account you referred pays a transaction fee, that fee is divided among several different accounts. The network takes a cut, and the Lifetime Member who referred the account gets a cut.

The registrar is the account that paid the transaction fee to register the account with the network. The registrar gets to decide how to divide the remaining fee between themselves and their affiliate.

Fees types

fee type

note

Pending Fees

Fees paid are only divided among the network, referrers, and registrars once every maintenance interval.

Vesting Fees

Most fees are made available immediately, but fees over the vesting threshold (such as those paid to upgrade your membership or register a premium account name) must vest for some period as defined by the committee.



Permissions

Permission Models

In LocalCoin, each account is separated into

permission type

note

Owner Permission

This permission has administrative powers over the whole account and should be considered for ‘backup’ strategies.

Active Permission

Allows to access funds and some account settings, but cannot change the owner permission and is thus considered the “online” permissions.

Both can be defined in the Permissions tab of your account using so called authorities together with a so called threshold that has to be exceeded in order for a transaction to be valid.

  • Authorities : In LocalCoin an authority consists of one or many entities that authorize an action, such as transfers or trades.

    • An authority consists of one or several pairs of an account name with a weight.

    • In order to obtain a valid transaction, the sum of the weights from signing the parties has to exceed the threshold as defined in the permissions.

  • Hierarchical Corporate Accounts

LocalCoin designs permissions around people, rather than around cryptography, making it easy to use. Every account can be controlled by any weighted combination of other accounts and private keys. This creates a hierarchical structure that reflects how permissions are organized in real life, and makes multi-user control over funds easier than ever. Multi-user control is the single biggest contributor to security, and, when used properly, it can virtually eliminate the risk of theft due to hacking.

Read more about Multi-Signature


Permissions - in Wallet Settings

The Permission page locates in a side menu.

  • Go to [Settings] and click [Permissions]

Permissions Keys

Permissions Tabs

tab

1

Active Permissions

Active permissions define the accounts that have permission to spend funds for this account.

2

Owner Permissions

Owner permissions define who has control over the account. Owners may overwrite all keys and change any account settings.

3

Memo Key

The memo key is where you receive memos, in order to decode the memos you need to control the private key for the public key By using a public/private key pair without spending authority, you may give read-only access to your memos to third parties.

4

Cloud Wallet

You can use this feature, if you want to change your Cloud wallet password.


Public Key and Private Key

Where are public/private keys?

In this section, we will show you how to find your private key.

You can find each Public key and Private key on the Permissions page.

Permissions Keys

How to find each private key

Note

If you cannot click nor find a link, login to your wallet.

  1. Active and Owner – Private keys

  • Go to [Settings] - [Permissions]

  • Click a private key number or a key image.

  • A Private key viewer form opens. You will find a Public Key and a [SHOW] button like below.

  • Click the [SHOW] button. You will find your Private key under the Public key.

Permissions Keys
  1. Memo – Private keys

  • Go to [Settings] - [Permissions] - [Memo key] tab

  • Click a key image. (It seems a private key number does not have a link.)

  • A Private key viewer form opens. You will find a Public Key and a [SHOW] button like below.

  • Click the [SHOW] button. You will find your Private key under the Public key.


How to change Cloud wallet password

In this section, we will show you how to change your Cloud Wallet password.

  • Go to [Settings] - [Permissions] - [Cloud Wallet key] tab

If you want to change your Cloud Wallet password, use this page. You will change your password and your keys during this process.

cloud wallet pwd

Steps

  1. Save your old Memo key (optional)

When you replace the memo key you will not be able to see old memos, so if you have a lot of those we recommend saving the old memo private key.

  • Go to [Settings] - [Permissions] - [Memo key] tab

  • Click a key image.

  • A Private key viewer form opens. You will find a Public Key and a [SHOW] button like below.

  • Click the [SHOW] button. Log in to your wallet if necessary. You will find your Private key under the Public key.

  • Write down and save the Private key.

  1. Set new password

You can use your desired new password or use the auto-GENERATED PASSWORD.

  • (#1)Type in [PASSWORD]

  • (#2)Conform the password [CONFIRM PASSWORD]

  1. Generate new keys

In this example, we decided to keep old Memo keys.

  • (#3)Click [USE] to generate new Active key

  • (#4)Click [USE] to generate new Owner key

  • (#5)Click [SAVE]

  • Confirm the Transaction

cloud wallet pwd
  1. Remove old keys

In order to remove access using your old password, you need to remove the keys corresponding to the old password.

  • Log out, and log back in with your new password.

  • Go to [Settings] - [Permissions] - [Active key] tab

You will see the two public keys. The light blue colored key is your new public key that is belongs to your new password. You want to keep only this key!

  • (#6)Click [REMOVE] next to the plain colored key.

  • Now go to the Owner tab and do the same for the old owner key.

  • (#7)Click [SAVE] – Do not forget to save!

  • Confirm the Transaction

cloud wallet pwd cloud wallet pwd

Multi-Signature

Authorities

In LocalCoin an authority consists of one or many entities that authorize an action, such as transfers or trades.

  • An authority consists of one or several pairs of an account name with a weight.

  • In order to obtain a valid transaction, the sum of the weights from signing the parties has to exceed the threshold as defined in the permissions.

Examples

We explain some examples to shed some light on the used terminology and the use-cases. We assume that a new account is created with it’s active permissions set as described below. Note that the same scheme also works for the owner permissions.

(Flat) Multi-Signature

A flat multi-signature scheme is composed of M entities of which N entities must sign in order for the transaction to be valid. Now, in LocalCoin, we have weights and a threshold instead of M and N. Still we can achieve the very same thing with even more flexibility as we will see now.

Let’s assume, Alice, Bob, Charlie and Dennis have common funds. We want to be able to construct a valid transaction if only two of those agree. Hence a 2-of-4 (N-of-M) scheme can look as follows:

Account

Weight

Alice

1

Bob

1

Charlie

1

Dennis

1

Threshold:

3

This means that each party has the same weight of 1 while 3 parties need to sign the transaction/proposal.

In other words: Alice, Bobe, Charlie and Dennis, each have 33% weight while 100% must be reached.

Multi Signature

All four participants have a weight of 33% but the threshold is set to 51%. Hence only two out of the four need to agree to validate the transaction.

Alternatively, to construct a 3-of-4 scheme, we can either decrease the weights to 17 or increase the threshold to 99%.

(Flat) Flexible Multi-Signature

With the threshold and weights, we now have more flexibility over our funds, or more precisely, we have more control. For instance, we can have separate weights for different people. Let’s assume Alice wants to secure here funds against theft by a multi-signature scheme but she does not want to hand over too much control to her friends. Hence, we create an authority similar to:

Account

Weight

Alice

49%

Bob

25%

Charlie

25%

Dennis

10%

Threshold:

51%

Flexible Multi-Signature

Now the funds can either be accessed by Alice and a single friend or by all three friends together.

Multi-Hierarchical Flexible Multi-Signature

Let’s take a look at a simple multi-hierarchical corporate account setup. We are looking at a company that has a Chief of Financial Officer (CFO) and a some departments working for him, such as the Treasurer, Controller, Tax Manager, Accounting, etc. The company also has a CEO that wants to have spending privileges. Hence we construct an authority for the funds according to:

Account

Weight

CEO.COMPANY

51%

CFO.COMPANY

51%

Threshold:

51%

FMulti-Hierarchical Flexible-Multi-Signature

whereas CEO.COMPANY and CFO.COMPANY have their own authorities. For instance, the CFO.COMPANY account could look like:

CFO.COMPANY

Weight

Chief.COMPANY

51%

Treasurer.COMPANY

33%

Controller.COMPANY

33%

Tax Manager.COMPANY

10%

Accounting.COMPANY

10%

Threshold:

51%

CFO Multi-Hierarchical Flexible-Multi-Signature

This scheme allows:

  • the CEO to spend funds

  • the Chief of Finance Officer to spend funds

  • Treasurer together with Controller to spend funds

  • Controller or Treasurer together with wither the Tax Manager or Accounting to spend funds.

Hence, a try of arbitrary depth can be spanned in order to construct a flexible authority to reflect mostly any business use-case.



Voting

If you hold some LLC tokens, you are considered a LLC Holder of the LocalCoin business and thus have a say in where it should be heading in future. As a LLC Holder you can cast a vote for three different entities within the network:

  • Block producers bundle transactions into blocks and sign them with their signing key. These so called witnesses keep the blockchain alive by producing one block every few seconds and get paid by newly issued LLC shares similar to Bitcoin. Their second job is to produce reliable and accurate price feeds for the smartcoins.

  • Committee Members govern the blockchain and the business parameters, and define the transaction fees.

  • Workers are freelancers or businesses that provide a non-profitable service for the LocalCoin ecosystem. Essentially, they apply for a job in the ecosystem by providing actual work and get paid accordingly (if the LLC Holders approve).

Since voting might be a too time-consuming task for many LLC Holders, itShares offers them a way to delegate their voting power to so called proxies. The sole purpose of proxies is to follow the ecosystem and be vote according to their followers. This is similar to many political votes where citizens vote for representatives which vote on their behalf.

Voting itself is very simply with the User interface and requires only a few clicks.

Voting by using LocalCoin UI

You can cast your vote or set your proxy by LocalCoin User interface.

Open the side dropdown menu and select [Voting]

cloud wallet pwd

Setting a proxy

The picture below shows how to set your trusted proxy:

  1. Type a proxy name

  2. Click [SAVE]

  3. Login to a wallet if you have not logged in

  4. Confirm the Transaction

cloud wallet pwd

Voting for Witness, Committee Member or Worker

If you have not set a proxy, you can cast your own vote for witnesses, committee members or workers.

  1. Select a Witnesses, Committee, or Workers tab

  2. Click and check TOGGLE VOTE

  3. Click [SAVE]

  4. Login to a wallet if you have not logged in

  5. (vote for each entity)


Referral Program

The purpose of the referral program is to incentivize people to bring in more people. It compares to a Multi-Level-Marketing (MLM) scheme with the difference of having only 1 level where referred individuals can opt-out by upgrading their account to a Life-Time Member (LTM). Every life time member, can get a cut of the fees based on child accounts linked to ours via referral.

LocalCoin Accounts

LocalCoin has several different kinds of accounts:

  • Basic Account, and

  • Lifetime Member.

Basic Accounts are free, but do not qualify for the referral program, nor any cash back on transaction fees.

Lifetime Members pay an upgrade fee and earn 80% cash back on every fee they pay. They also qualify for 80% of the fees paid by Basic Accounts they refer to the network. These 80% can be split among the registrar, that actually registers the accounts, and an affiliate referrer, that brought in the new user.

Note

In Q1/2016, the anual membership has been removed from the code base and no longer exists. References to this kind of memberships can be safely ignored.

The referral fees are controlled by the blockchain and are distributed like this:

  • 20% go to the network

  • 80% go to the referral program

    • of this 80%, x% go to the registrar

    • of this 80%, 100%-x% go to the affiliate referrer

Note

For many cases it may make sense to upgrade the account even though you don’t want to participate in marketing at all simply for the reasons to get a cashback of 80% of the fees you pay for your own transactions!

What to do?

If you want to participate in the referral program, you need to have a life-time member account, first! Then you can bring in new users by

  • running your own faucet and actually register new accounts (will give you 80% of all the fees of those minus a fraction that you decide to give to affiliates (the referrers)

  • referring people to a hosted wallet that offers you a cut of the fees as an affiliate.

In this case, most hosted wallets add your account as affiliate if you provide the following link structure to people

https://<url>/?r=<your-account>
Example: https://wallet.localcoin.is/?r=blabla1
  • with <url> being LocalCoin wallet domain wallet.localcoin.is or the name of our your own domain name like yourdomain.com where you run your own LocalCoin wallet UI.

  • and <your-account> being the name of your LocalCoin Lite-Time Member account.

Note

If you want link to pages with in the wallet, e.g. a particular decentralized market, you need to have the ?r= parameter before the #, e.g.:

https://<url>/?r=<your-account>#/market/USD_BTC

Example

When an Basic Account pays $100 to become a Lifetime Member, $50 is paid to their Referrer, $30 is paid to the nearest Lifetime Member, and $20 is paid to the Network. After this point the Lifetime Member becomes its own referrer and nearest Lifetime Member and its prior Referrers no longer get any revenue from this user.


Claiming Referral Bonus and Cashback

If you have a life time member account and

  • already paid some fees, or

  • have referred people that paid some fees,

you can withdraw them in the “Vesting” tab of your account.


Vesting Balances

In LocalCoin, some balances are vesting over time. This feature has been introduced initially in LocalCoin 1 when merging several blockchain businesses into one blockchain.

Now, we make even more use of this functionality in such that an accounts income in form of

  • worker pay,

  • witness pay,

  • the referral program, or

  • cashback

is vesting over several days with different strategies.

For instance, a worker can define for how long he would like his pay to vest to encourage shareholders to vote for him due to no imminent additional sell pressure from the worker.

Strategies

  1. CCD / Coin Days Destroyed

The economic effect of this vesting policy is to require a certain amount of “interest” to accrue before the full balance may be withdrawn. Interest accrues as coindays (balance * length held). If some of the balance is withdrawn, the remaining balance must be held longer.

  1. Linear Vesting with Cliff

This vesting balance type is used to mimic traditional stock vesting contracts where each day a certain amount vests until it is fully matured.

Claiming A Vesting Balance

You can claim vesting balances by using LocalCoin User interface.

Open the side dropdown menu and select [Vesting Balances]

Vesting Balances Vesting Balances