The peer-to-peer crypto marketplace LocalBitcoins is based in Finland. The platform allows users from all around the globe to exchange their local currency for Bitcoins. More than that, the site actually specifically looks for advertisers in a user’s area, so that the currency and payment method will be more familiar. The site holds seller’s Bitcoin in escrow to ensure the fairness of transactions and to eliminate scammers. The platform facilitates over-the-counter trading of local currency for bitcoins. LocalBitcoins Oy is registered with the Finnish Financial Supervisory Authority.
The Positives
- LocalBitcoins is one of the largest and most well-established P2P crypto exchanges in the world, providing longevity (active since 2012) and stability to users who are worried about the volatility of the cryptosphere.
- Technically, they accept any currency in the world; if the seller is willing to accept the buyer’s currency, the platform allows it to happen.
- For users who want a Bitcoin-only experience, LocalBitcoins is perfect, as they are yet to introduce altcoins (and perhaps never will).
- Buyers can choose how they want to communicate with their seller to discuss the transaction, which is connected to the geolocation feature as the site initially encouraged face-to-face swaps. Now, it’s done predominantly online with a messenger interface to help smoothen out deals.
- A feedback system gives a rating out of 100% to both buyers and sellers to help other buyers and sellers to decide whether they should trust the other individual.
- Escrow puts the seller’s Bitcoin in a safe and neutral spot while the transaction is managed. If anything goes wrong, LocalBitcoins offers an effective conflict resolution service.
The Negatives
- LocalBitcoins used to be all in favour of financial democratization, but now they require users to do KYC checks before trading.
- There are no altcoins on the platform at all, it’s only Bitcoin.
Which cryptocurrencies can you find on LocalBitcoins?
It must be lonely for Bitcoin, as it’s the only accepted cryptocurrency on LocalBitcoins, though that’s to be expected from the name.
Accepted payment methods include:
- Webmoney
- Western Union
- Wire transfer
- PayPal
- Cash (in person)
- Cash by mail
- SWIFT
- SEPA
- Worldremit
- Moneybookers
- Skrill
- Credit card
- Mukuru
- And more!
Some more information on fees
LocalBitcoins is free to join, it’s free to purchase crypto, and it’s free to sell crypto. However, whilst the platform continually uses the term ‘free’, they also, in the same breath, state that advertisers whose sale is completed will be charged 1% of the trade.
The buyers do not pay any fee, but the 1% fee that sellers pay is added on top of the price that sellers list the Bitcoin at, so in a sense, both the buyer and seller are paying that 1% to the exchange.
The platform has its own Bitcoin wallets for users and transactions from one user to another are completely free. Transactions from other wallets will realise a small charge, and of course, moving Bitcoin costs a small network fee, which sellers will pay.
How to avoid scammers
As LocalBitcoins is a peer-to-peer network with a reputation for scams, the following advice will help you spot a trustworthy user from a risky or dodgy one.
- Trade with users who have traded at least 50 BTC in the past, this indicates they are trading regularly
- Only trade with those whose feedback is over 98%
- If they have verified seller status, you can feel safe trusting them
- Don’t trade with accounts less than 6 months old, ideally, only use partners who are established for over 1 year
- Don’t trade outside the service as you lose your protection and escrow and you are at the mercy of the other party
- Don’t give any personal or payment information outside of the exchange, keep everything in the native interface
- Contact sellers directly about buying their Bitcoin, rather than posting purchase advertisements, as these can attract the wrong sort of attention
- Search the LocalBitcoins forum with their username, seeing if any complaints come up
Follow these tips and you should be fine. Just remember, paying a bit more for the convenience of a smooth and safe trade can outweigh the negatives of a risky deal.
The final say
Despite the risks inherent with the platform, it’s a really interesting service that is almost in its 9th year of operation. It’s quite old-school compared to rivals like Changelly, but if users want a simple place to buy Bitcoin directly from others and to avoid exchanges, this is a great platform to do it.
