LocalBitcoins Exchange Review
LocalBitcoins Cryptocurrency Review
Trust Score: 9/10
LocalBitcoins was set up in 2012 and are not what you might call a cryptocurrency exchange as such or even a broker. It is essentially a peer-to-peer marketplace that connects buyers and sellers who are interested in trading Bitcoins between each other.
Think eBay for Bitcoins and you are pretty much there.
Operated out of Finland, LocalBitcoins is a global P2P that can allow users from 248 countries to communicate with would-be buyers and sellers, come to a trade agreement and eventually buy and sell their Bitcoins.
Users can create advertisements where they state how much they are willing to buy or sell Bitcoins for and other users can either decide to take them up on that offer or look for someone else.
LocalBitcoins in the main acts a marketplace and an escrow service when it comes to the transactions. They will hold the bitcoins in escrow until the seller confirms that they have received payment. The buyer will then have those Bitcoins sent to their LocalBitcoins wallet from which they can then send to their own third-party wallet.
While LocalBitcoins acts as the middleman, the responsibility ultimately lands at the feet or the traders. For this reason, it is very important that you are very vigilant and make use of the reputation and real name verification features that LocalBitcoins provides.
We will discuss those features in more detail in this reviews alongside everything else to do with LocalBitcoins in this extensive review.
LocalBitcoins does have an app but it is currently only available for Android users at the moment. We are not sure if they will do the same for iOS users but we will certainly let you know if we find out.
Users are able to log in using their credentials for the website and can take advantage of what LocalBitcoins provides while on the move. It will allow you to purchase and sell Bitcoins while on the move and keep on top of the current market rate of the worlds number one cryptocurrency.
- Buy and Sell Bitcoins
- Find Trades Near You
At LocalBitcoins the only cryptocurrency that you can buy at the moment is that of Bitcoins. This is the number one cryptocurrency at the moment and it is likely to stay that way for the time being. We are not sure if they will ever have plans to sell other currencies in the future and they certainly have not ruled that out.
[vcw-table color=”white” currency=”USD” symbols=”BTC”]
Registering An Account at LocalBitcoins
Once you decide to bite the bullet and sign up for an account at LocalBitcoins, you will find that it is a very simple process.
All you will need is a username, password and a genuine email address that you will be able to verify through an email they send you. You will also have to tick a captcha to prove that you are not a robot.
- Quick and Easy Process
- No Verification Needed
Real Name Verification
While verifying your identity is not required to trade Bitcoins on LocalBitcoins, some sellers will want real name verification in order to protect themselves from fraudulent buyers.
LocalBitcoins does not offer a verification as such but does give sellers the tools and ability to do this themselves. They are able to ask buyers for the real name and for proof of this via identification.
If payment comes from a payment method where the name is different to the identification that was shown to them, the seller is able to dispute the sale.
If a seller asks for some form of ID, this can be uploaded to LocalBitcoins and they can download it. Once the sale is complete, they can then mark your account that they can confirm that you provided real name verification. This then stays on your account for other buyers to see.
The more of these real name confirmations on your account the better, as it allows sellers to see that you have completed numerous transactions having provided your real name to previous sellers.
You will find that after a while your trust level means that buyers stop bothering to even ask you for it anymore.
- Reputation improves through providing real name verification
- Gives sellers a peace of mind
Making a Purchase on LocalBitcoins
Once you have created your account, you are now able to go searching for other users that are selling Bitcoins. You can either search for sellers that are very local to you if you want to use payment methods such as cash on delivery or cash by mail, or if you are planning to use digital currency or one of the other payment methods, you can simply find a buyer from anywhere.
The search feature allows you to narrow down your search through criteria such as location, price, the payment methods you prefer or even through the ID verification requirements that you wish to see.
When you click search, you will see a number of different vendors appear on your screen. Each of them will have a reputation score given to them by previous buyers that have rated them. This is a good way to establish whether they are going to be a trustworthy seller.
You will also be able to check their transaction history and even speak to them directly to ask questions or to discuss some of the details about the trade.
Once you are happy enough with the seller that you have chosen, simply click ‘buy’ before inputting the amount you would wish to purchase along with your desired payment method and the method in how you will receive the Bitcoins.
You are then asked to make a payment using your chosen payment method during a certain amount of time. Once you have sent the payment, you click the ‘I have paid’ button. Once you do this, the seller is told of this and the Bitcoins you have bought will be taken from his wallet and held in escrow by LocalBitcoins.
They will stay there until the seller has received the payment and confirms this from his end. The Bitcoins will then be moved to your wallet.
- Search filters
- Trust and reputation ratings
Making a Sale on LocalBitcoins
This process is essentially a reversal of the process above.
You first create an advertisement stating how much you are willing to sell your Bitcoins and the payment methods you prefer. Once a seller gets in touch and makes a payment, your Bitcoins will be kept in escrow. As soon as the payment comes through on your side, you confirm this and your Bitcoins are then sent to the buyer.
If you complete a sale successfully, there is a chance that the buyer will give your reputation a boost by giving you a rating based on the transaction. If you can maintain a good level of trust and reputation through these ratings, you will find it much easier to find buyers.
Accepted Payment Methods
How you buy your Bitcoins from Local Bitcoins is completely up to you and you can even pay by cash person to person if you like after meeting up with a prospective seller. Of course, you also have other methods of payment too such as digital methods such as PayPal, eWallets such as Webmoney, through Western Union or wire exchange.
Here are some of the different payment methods you can use to purchase your Bitcoins on Local Bitcoins:
- Cash on Delivery
- Cash Sent by Mail
- Western Union
- Wire Exchange
There are many more payment methods that can be taken advantage of depending on your location. Payments that are provided in one corner of the world may not be able to be used on the other side of the world, so these will change depending on who you are buying from or selling to.
When it comes fees, this is what you can expect from LocalBitcoins:
- Registering an account, buying Bitcoin and selling Bitcoin will result in absolutely no fees being taken.
- Sellers that create advertisements on LocalBitcoins will be charged 1% of every sale that they make.
- All Bitcoin transactions (sending to wallets etc) are completely free. There maybe coin network charges but these are to do with the coin networks and LocalBitcoins receives nothing.
- Users that want to use the merchant invoicing services that LocalBitcoins provides will be charged 0.5% of the paid amount on the invoice.
With regards to the fees on the different payment methods, these will have to be established by finding out the information from each of these methods.
The minimum amount of Bitcoins that you can send to your LocalBitcoins wallet is that of 0.0002 BTC. There are no maximum limits so you can send as much as you like.
One of the key selling points that LocalBitcoin uses to promote its peer-to-peer bitcoin marketplace is that they are able to help traders facilitate trades in 248 countries and 15,650 cities around the world.
We have not seen this full list and do not know of any countries that are restricted from using this platform but we would assume that most of you will be able to make use of this platform.
- Global Reach
- Accessible to Traders in more than 240 Countries
LocalBitcoins provides customer support via email and generally, the response times are pretty quick. They also have a very good F.A.Q page and a number of guides that between them will give users everything they need to know with regards to using the platform.
Furthermore, there is a forum where users can communicate, offer advice and generally share their experiences with other users on the site.
This is a difficult one as most of the safety element in the marketplace will come down to your own instincts and decisions. All marketplaces will have users that are obviously there to scam or be dishonest, so your safety will depend on making sure you only deal with the good traders.
- Only trade with sellers with good reputation and history on the site.
- Ask for real name verification if you are a seller.
- Avoid using payment methods that are reversible (such as PayPal).
- Keep all communication in-house on LocalBitcoins and not externally as LocalBitcoins will not be able to use the latter in a dispute.
- Never give out any more personal information other than your name.
If you can stick to the above, you should not have any problems. Even then though, there is still always the possibility that you could be defrauded.
As for site security, they do use cold storage for funds but it is always best to keep your Bitcoins in your own wallet as much as possible. They also allow two-factor authentication on accounts.
LocalBitcoins gives traders a fast and easy way to acquire or sell Bitcoins via their marketplace platform. They have some excellent features in place to help protect users on both sides of the transactions but users still have to be very vigilant.
In much the same way that you can be scammed on sites like eBay when buying products, the same thing is still possible on LocalBitcoins. All you can do is limit the chances of being scammed by trading with the users on the marketplace that have the highest reputation ratings and the most transactions that were completed successfully.
While the fees are quite high compared to cryptocurrency exchanges with regards to buying Bitcoin, we like the fact that LocalBitcoins has such a wide reach and therefore enables people the chance to buy Bitcoins when they are not able to do so via other platforms.
There are a number of peer-to-peer marketplaces out there in the cryptocurrency sector but in our experience, LocalBitcoins is the best of them in pretty much every area. Check it out today if you are looking for a quick and easy way to buy and sell Bitcoins!