LocalBitcoins is one of the oldest cryptocurrency exchanges in the world. It was founded by an entrepreneur and programmer known as Jeremiah Kangas in 2012. Unlike other exchanges where you can easily exchange one token to another, LocalBitcoins operates in a different way. It offers cryptocurrency buyers and sellers a platform to meet and trade bitcoins freely.
To help you understand how LocalBitcoins operates, we are going to dig deeper into the exchange, looking at what exactly it entails, Log-in and sign up the process, payment, fees charged, and, of course, it’s pros and cons. Let’s get to it!
So, what exactly is LocalBitcoins?
In simple terms, think of LocalBitcoins like the “Craigslist” for buying and selling bitcoins. On one side, sellers are offered a platform to create advertisements, list them on the site and wait for prospective buyers to contact them. On the other side, buyers can browse through a number of sellers and compare offers when buying bitcoins. It’s a perfect gateway for the new entrants to the cryptocurrency world to get accustomed to the process of acquiring bitcoins.
Although LocalBitcoins was originally founded in Finland, it does not lock out other countries when it comes to offering its services. Since 2012 it has developed a great reputation among buyers and sellers of bitcoin, expanding to accommodate other countries as well. Today, it lists exchangers from about 15582 cities, across 248 nations. And with cryptocurrencies getting more mainstream attention and more adoption, more cities and countries will be joining the list.
LocalBitcoins Login and Sign up
Now, let’s start with the signup process. You will be happy to know that registering to the platform is just as easy as filling your details and you are in. And it’s completely free. You can easily navigate the main page and click the “sign up free” option at the top right corner, and then fill in your details (username, email, password, and confirmation of password)
Once you have created your account, you can now log in and start searching for sellers in your area. LocalBitcoins allows users to conduct a customized search depending on ID verification requirements, payment methods, and seller location.
When you choose your preferred vendor, you can then proceed with your purchase, making sure that you confirm the actual amount you intend to buy as well as the payment method. If you both agree on the terms, you can proceed to make the payments and the vendor will release your bitcoins. Don’t worry about the vendor disappearing with your funds – the platform has put in place a number of factors in order to enhance the experience. Simple and straightforward!
Features to Help Secure Trades
Just as we mentioned above, LocalBitcoins knows that fraudsters could use the platform to take advantage of the unsuspecting customers. For this reason, they have gone ahead to incorporate several features that guarantee safe and transparent trades between parties. Here’s how both buyers and sellers are fully protected.
- Escrow Services – When making trades, the amount of bitcoins to be traded is held by the escrow admin and in some cases the money to exchange hands. The bitcoins and funds are only discharged when the vendor confirms that the exchange is successful. It’s a win-win for everyone!
- 2-Factor Authentication – Worried that some could access your account and get away with your bitcoins? Well, you can take security into your own hands and set up 2-factor verification. The additional PIN code helps provide more protection against potential hacking. You have to confirm any sign-in by inputting a PIN code that’s sent directly to your phone.
- Reputational Ratings – Don’t like the way a trader handles the business? Does he take too long to confirm trades even when the funds are disbanded? Well, you can rate them low and notify other traders of their behavior. You can provide good feedback if the trader appears trustworthy, or read through reviews to determine who to do business with. Brilliant idea by Kangas, right?
- Conflict Resolution – In an event where you are in conflict with the person selling/buying bitcoins, you can escalate the issue to the admin and they will solve it. The support team investigates all issues brought before them, resolving any disagreements.
- Customer Support – Have a question about website’s operations? You can contact the website directly and they will respond promptly. The site also has a forum where its users discuss issues affecting them and give up comprehensive advice.
Yes, LocalBitcoins has a good reputation when it comes to safety, but this doesn’t mean you go ahead and make your first purchase without learning some important factors. As a buyer, it’s essential that you get to know some safety measures to ensure that you have successful trades.
Here are ways to avoid possible scams:
- Check the profile of the seller for a rating. If they are rated 95% and above, you are most likely safe. If they have traded a good number of bitcoins, say 100 BTC, you are safe as well. But too bad if the seller doesn’t match any of these descriptions. Chances are your first trade on the platform will be problematic.
- Explain your requirements, highlighting all issues you have. The platform allows you to negotiate prices, delivery method and well as a mode of payments. Let the trader know how you intend to purchase the bitcoins
- Avoid trading externally. Don’t negate the escrow services offered by the platform – stick to the platform, making all communications through LocalBitcoins. The website records your chats for a period of time in case they will be needed to resolve issues in the near future.
LocalBitcoins Payments Methods
Unlike most exchanges out there that allow a limited number of payment methods, LocalBitcoins gives you access to a myriad of them. These include:
- Cash via mail
- Cash on Delivery (COD)
- Wire Exchange
- Western Union
LocalBitcoins charges a commission for all trades, usually 1%, which is charged to the seller. However, as you buy bitcoins from the platform it’s better to be aware that sellers often sell bitcoins higher than the market price so that they can make profits.
If you are looking to become a vendor on LocalBitcoins, you also should be aware of the risk of chargebacks. You sell bitcoins to a buyer; they pay via PayPal, but later initiate a chargeback. It’s better to go with the much safer payment methods, especially for the buyers with not-so-good reviews/ratings.
Just as mentioned earlier, you don’t need any verification to start trading on local bitcoins, apart from the regular email confirmation. However, if you want to transact a large number of bitcoins, the sellers might require that you verify your names by sending an ID or some form of address. This means that you can get your account set up seconds and acquire your bitcoin in a matter of minutes.
Why LocalBitcoins is Different from Other Exchanges
LocalBitcoins is usually one of the most preferred platforms when it comes to buying bitcoins, and for a good reason. For starters, the website tries to follow the idea of decentralization, just like bitcoin. This means that you can deal with sellers directly.
The features put in place for trading makes the process of buying/selling cryptocurrencies faster and of course less crowded. Unlike sending from one wallet to another or waiting for an exchange to settle your order, you get your bitcoins the same moment you confirm the purchase. No lagging, no wait time!
LocalBitcoins Pros and Cons
Just any other exchanges, LocalBitcoins has some advantages as well as downsides. Here’s a brief overview of its pros and cons:
- Provides a wide range of payment options
- Doesn’t impose buying/selling limits
- In-person cash trades are easy and fast
- Provides an effective forum where you can place your questions/concerns and get help
- It doesn’t require you to verify your personal information in order to begin trading
- Charging a flat fee of 1%, LocalBitcoins is cost-effective. Traders earn more by deciding their prices when putting advertisements.
- Allows you to view profiles of different traders before making a decision
- Platform is available in many cities and across numerous countries
- Many scammers use the platform to target newcomers
- Prices of bitcoin tend to be higher compared to the market value
- Some sellers might insist on ID verifications, especially when transacting large amount of bitcoins
- Some payment options such as PayPal might be risky because of chargebacks
LocalBitcoins is perhaps one of the most accessible platforms when it comes to acquiring bitcoins. It allows private purchases, giving vendors an opportunity to decide on their selling price and payment method. The team behind the platform is always working to improve the site’s features and incorporate even more cities and countries. If you are looking to get into cryptocurrency world and get yourself some bitcoins, there are no doubt Bitcoins is a great place to start.