LocalBitcoins is a crypto marketplace where you can buy and sell cryptocurrencies. On this platform, you will spend time transacting with other people instead of dealing with a middleman.
This article will have a closer look at this age-old platform to see how you can leverage its potential.
Every platform has its advantage and disadvantages. In the next two sections, let us take a look at some of them.
Pros
User friendly. LocalBitcoins is free of all the cluttered order books and charts. With a craigslist style platform, using LocalBitcoins for the very first time is also extremely easy.
Low fees. Surprisingly, market takers, i.e., people who fulfill orders, don’t have to pay any fees to the platform. The users who post listings will need to pay a 1% fee for every completed order. This is extremely low, considering the benefits that this platform brings to the table.
Varied payment options. LocalBitcoins allows bank and card transactions, as well as other major payment methods.
Good customer care. The staff is highly responsive, and all queries are addressed as fast as possible.
Cons
Fraudulent activities. LocalBitcoins is a fan favorite amongst scammers. So, you need to be extremely careful when using this platform.
Bitcoin only. The platform is strictly for Bitcoin transactions. No support for Altcoins is provided.
The Takeaway
Yes, there might be some cons to using the platform, but it is clear that the advantages still outweigh them.
LocalBitcoins is a free-for-all market, and this means that users are responsible for any transactions occurring on the platform. With proper internet etiquette and knowledge, it is easy to avoid scams in LocalBitcoins.
What Is LocalBitcoins?
LocalBitcoins is a peer-to-peer (P2P) cryptocurrency marketplace where you buy and sell cryptocurrency directly to other users. If you have ever used Craigslist to buy or sell any household items, you can think of LocalBitcoins as the Craigslist of the crypto world.
Instead of having to deal with an exchange, you would be dealing directly with other individuals. This means you would need to pick up your phone and contact the other sellers on the platform.
This platform is very simple to use. You have a tab option to buy Bitcoin and another to sell them. Upon clicking either one of them, you will be presented with several offers posted by other users.
If you find something priced according to your liking, you can enter the number of Bitcoins you would want to purchase and proceed. To pay the seller, you can choose any of the payment modes that they are accepting. The transaction is fast, easy, and reliable as long as both parties meet halfway.
To sell Bitcoins that you own, you can choose the Sell Bitcoins tab on the website and search for an offer that would benefit you. You could also list out your offer, and if someone likes it, they might get in touch to seal the deal.
This all sounds fairly simple, right? The whole idea behind LocalBitcoins was to create a platform that any new cryptocurrency user can understand easily. While the entire process of buying and selling Bitcoin is easy, you need to go and deal with other people’s preferences. While some might like this feature, others might not.
Also, there are many other things that you need to be aware of when using LocalBitcoins. Read on to understand more about this amazing cryptocurrency marketplace.
LocalBitcoins Services
LocalBitcoins has many excellent features that new and veteran buyers and sellers can enjoy. Here are some of them:
1. Buy Bitcoin
On LocalBitcoins, you will find the option to buy Bitcoin from other users. This is accomplished by paying selected users through the payment mode of their choice. Upon clicking the Buy Bitcoin tab on the website, you will be able to see thousands of users ready to sell Bitcoin. If any of their offers interest you, a transaction can be started.
Since the users you see in the buy tab are in your area, you can directly contact them. You can then meet at an agreed-upon spot to complete the process. However, keep in mind that there is a need to deposit money in their bank accounts.
LocalBitcoin acts as a facilitator that helps connect two users. Since all transactions can be done directly without any middlemen’s involvement, you will be able to avoid the trading fees that exchanges usually charge.
2. Sell Bitcoin
Apart from buying, you would also be able to sell your cryptocurrency on the LocalBitcoins platform. Click on the Sell Bitcoin tab, and you will be able to see thousands of offers from other users who are willing to buy Bitcoin at different price values.
If you see an offer that meets your expectations, you can get in touch with that particular person and sell your Bitcoin in exchange for your chosen currency.
When selling Bitcoin on LocalBitcoins, you are free to choose any convenient payment method for you. Anyone who accepts your offer to sell Bitcoin would then send you the payment in the mode that you requested.
Both the buy and sell Bitcoin tabs can be used to execute a transaction quickly. However, if you don’t find any great offers that you like, there is a third option on this platform.
3. Post a Trade
If you are not satisfied with any of the listings on the buy and sell tab, you can create your very own listing by heading over to the post a trade tab.
You can either post a listing to buy or even sell Bitcoins on this platform. By providing details such as the margin that you want for the Bitcoin market value, number of Bitcoins you want to sell/buy, timings, payment method, etc., you will be able to create your very own listing.
If another user is satisfied with the deal you are offering, they might get in touch with you to complete the transaction.
While your listing is getting accepted by someone, you might have to wait for some time as this involves other users to be interested in your offer.
Accounts and Restrictions
When LocalBitcoins was launched in 2012, there were no account restrictions. You could easily buy or sell any number of Bitcoins without limits. This led to numerous frauds and scams on the platform.
At one point in time, LocalBitcoins was the go-to place for online scammers. To curb this, regulations were introduced, and the number of Bitcoins that you can buy/sell was restricted based on the account level. After numerous changes, we now have four levels of accounts. These are:
Tier 0. By simply providing your basic details such as your name, mobile number, email ID, etc., you will be able to satisfy a Tier 0 account’s requirements. This account restricts users from buying Bitcoins over 1,000 Euros per year.
Tier 1. Providing the basic details as required in Tier 0 along with valid ID proof would qualify your account to the Tier 1 account. The limits imposed on a Tier 1 account is 20,000 Euros per year.
Tier 2. You can further increase your account limits by upgrading to a Tier 2 account. To increase your account limits to 200,000 Euros per year, you will need to provide your address verification documents in addition to your ID verification documents.
Tier 3. You will need to upgrade to a Tier 3 account if you want to eliminate the account restrictions. To upgrade your account to this level, you will need to complete an additional step of identity verification. This might include providing your utility bills or providing additional information over a video call.
My Experience on LocalBitcoins
I have used LocalBitcoins only a couple of times to buy Bitcoin in the past. While the whole process of purchasing Bitcoin in this marketplace is simple, I found it very hard to find a posting that I liked.
Most of the time, people tend to overprice their assets on this platform. If you are an experienced crypto user, you would easily get to know when you are overpaying for Bitcoin. However, many new investors tend to fall prey to this.
This is also one of the main reasons that LocalBitcoins is not the go-to marketplace for most crypto enthusiasts. The only advantage that I saw by using this is the level of anonymity. With peer-to-peer transactions, your identity is not saved on any centralized server. Thus, making the transaction completely confidential.
Fees
LocalBitcoins charges 0% fees for all buy and sell transactions on the platform. The only fee you might need to pay when selling Bitcoin is the Bitcoin network’s miner fee. So, you might also want to consider this extra overhead when you are selling your Bitcoins.
How does LocalBitcoins earn money to run its platform? The market makers (or the people who create listings on this platform) will need to cough up a 1% fee for all completed transactions.
Payment Methods
This is one of the things that I loved about LocalBitcoins. By using this platform, you can use almost any payment method available in the market. Compatibility is also achieved since you are dealing with other users in your vicinity.
The chances of both of you using the same payment methods regularly are very high. Popularly used payment options in LocalBitcoins are bank transfers, wallets such as Paytm and Paypal, and debit/credit card. The site accepts all your local payment methods.
Advancements to Reduce Frauds
LocalBitcoins has no screening mechanism in place to weed out fraudulent listings. Therefore, you need to be very careful on this platform. One way to identify a correct listing on this platform is to check Reddit. You will be able to find some of the most reliable sellers over there.
You must also be sure that the person you are doing a transaction with has fulfilled several orders in the past. One of the most important things is to use the LocalBitcoins platform to complete the transaction. Never provide your details, email Id, or mobile number to anyone.
On LocalBitcoins, several measures such as Escrow help to reduce the chances of a scam. However, if you contact the buyer/seller outside of this platform, these measures would not protect your funds.
Fraudulent trades had tainted LocalBitcoins for a very long time. To help reduce these activities, several steps have been taken by the LocalBitcoins team. One move was to introduce KYC (Know Your Customer) norms.
This helped to identify fraudsters on the platform. Another step taken by the team to reduce fraudulent activities was to introduce an escrow account. By completing all your transactions on LocalBitcoins, your money will be held in escrow until the transaction is confirmed.
If you report a fraudulent transaction with valid proof, then the escrow money would be transferred back to your account, and the user who trades to defraud the system would be permanently banned.
Customer Support
This was another area of concern for the users. Over the years, LocalBitcoin has increased its customer support quality. You can get in touch with the team on any of their social media handles or can raise a ticket directly on the platform.
You can expect a reply from the customer support team within a few hours of raising the ticket. Their proactive and prompt approach towards customers is what makes this a great experience.
Below is some critical information take from their FAQ.
Frequently Asked Questions About LocalBitcoins
Transaction time ranges from 10-60 minutes, depending on the number of confirmations needed. However, once all confirmations are done, you can expect to see the balance in your account.
The escrow system is used to protect buyers and sellers from scammers. This way, a transaction needs to finish before the money is transferred to either party.
Sign-up is free, and you need to provide your username, email, and chosen password to do it. Once you are logged in, you can increase your account privileges by confirming your identity.
Verdict
If you are looking to buy Bitcoin on a platform that offers a wide range of payment options, then LocalBitcoins is the perfect solution for you. However, this platform is also tainted by many fraudsters, so you might want to be careful.
Always ensure that you transact with trusted people on the platform and use LocalBitcoins as the mode of communication between yourself and the buyer/seller. Overall, LocalBitcoins provides an excellent method to communicate and negotiate with other Bitcoin enthusiasts near you.
LocalBitcoins Reviews
LocalBitcoins Review – January 26, 2021
★★★★★
LocalBitcoins is my go-to site for local and within my vicinity crypto shopping. I find it easy to use since it takes the form of a site similar to Craiglist; thus, finding a good seller is as easy as 1, 2, 3. I also love the fact that it has many payment methods.
Review from Manny
LocalBitcoins Review – June 2, 2020
★★★★★
Thanks to the escrow function, I am sure that my trades and sales are legitimate. This helps me feel secure regarding the coins that I sell or buy. The site gave me insights on proper Bitcoin pricing since if I put it at a high price, others will not purchase, and a lower price could mean losses on my side.
Review from Hans
LocalBitcoins Review – September 29, 2019
★★★★★
I have seen countless p2p Bitcoin platforms, but none of them beats LocalBitcoins. Here, I can use cash, Paypal, Advcash, and even debit and credit cards. The authentication is also pretty strong, thanks to code-based log-ins.
Review from Isma
LocalBitcoins Review – December 12, 2019
★★★★★
Now that I learned about this site, Paypal and Skrill to Bitcoin conversions are much easier! However, it would be better if they had other cryptocurrencies since it will be more beneficial to multi-wallet holders such as me.
Review from Dan
LocalBitcoins Review – April 10, 2020
★★★★
The platform promotes efficient exchanges, as the process of contacting buyers and sellers is swift and easy. Also, payment methods are appreciated as it has most major modes available in the market. However, the website interface could use some improvement.
Review from Winslow
LocalBitcoins Review – March 5, 2020
★★★
The site is good as it offers low fees, instant transfers, and fantastic customer service. However, I preferred face to face transactions as well as gift card options. I want these back as I have grown accustomed to using them.
Review from Trey
LocalBitcoins Review – June 6, 2020
★★
If you are not negligible about internet schemes, you can quickly succumb to scams on the site. However, if you make sure that you are prepared and that your accounts are secured, transactions will be easier. I hope they take responsibility for fraudulent sellers.
Review from Jess
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