Complete Guide to Localbitcoins
Localbitcoins has been embraced by the Bitcoin community as a tried and trusted site used to trade Bitcoin. The site aims to be true to the decentralized ethos of Bitcoin and fills a specific niche within the ecosystem of the cryptocurrency. The site is a good option for both experienced traders and those new to Bitcoin trading.
Localbitcoins was started in 2012 in Finland and is an alternative way for users to buy and trade Bitcoin. This open marketplace enables Bitcoin buyers and sellers to connect to each other. Once users have joined the site, they are able to place advertisements and establish contact with other buyers and sellers to trade. Before any trade is finalized, all transaction details can be confirmed.
Localbitcoins functions as a decentralized marketplace that enables people to buy and sell Bitcoin directly from each other.
The reputation of this exchange is excellent and it has been established in many countries across the globe. Traders in 15582 cities in 248 countries are currently listed on the site.
Getting Started with Localbitcoins
Localbitcoins is commonly used as an entry into the realm of Bitcoin trading. New cryptocurrency users can quickly master the art of buying and selling Bitcoin by using this site. To get started, new users simply have to visit the signup page and create a new account.
Once users have opened an account, they can start searching for Bitcoin sellers in their area. The site has powerful search options allowing members to conduct searches with a wide range of criteria, including ID verification requirements, accepted payment methods and seller location.
When searching, a number of vendors will be displayed in the search results page. Users can first check the trading history and reputation of each vendor before communicating with sellers directly if they want to discuss any potential issues. Once a user has completed their search and have verified the sellers they’re interested in, they simply need to click on the “Buy” button to start a trade.
Once the “Buy” button has been clicked, the process of purchasing Bitcoin from the seller can be completed. This process includes specifying the amount the user would like to buy, the payment method that will be used, how the Bitcoin will be received, and the type of ID that will be used.
The whole process is very straightforward. Localbitcoins has incorporated a number of significant factors that enhances the user experience and allows trades to take place with a minimum number of problems.
Methods of Payment
A wide variety of payment methods are available in Localbitcoins to facilitate transactions between buyers and sellers. These include:
- Cash on Delivery (COD)
- PayPal
- Cash via mail
- Wire exchange
- Western Union
- Webmoney
Localbitcoins has also built in numerous features that will ensure that trading happens in a secure environment:
- 2 Factor Authentication–An extra layer of security against hackers is provided by an additional PIN code. With 2 Factor Authentication users can confirm their sign-in by a PIN code that is sent to their mobile phone.
- Ratings–Based on their activity, traders are ranked. Traders’ feedback ratings and trading history and are open for all to see.
- Escrow–When a trade is make, Localbitcoins holds all cash sent via their escrow administration. Funds are only released after the vendor confirms that the exchange has been successful.
- Conflict Resolution– If users encounter an issue, Localbitcoins’ customer support team provides conflict resolution services. The team investigates each case reported and will resolve any disagreement between sellers and buyers.
- Customer Support – Email support is offered and responses by the support team are generally very fast. The site also has a forum where registered users discuss any issues they might have and give each other advice.
Fees Payable
Localbitcoins’ commission charges are a mere 1% of the traded value. This fee is taken from the seller, or the individual who placed an ad. Buyers using the site should however take note that Bitcoin prices on this site are generally higher than those that you would find on most of the centralized mainstream exchanges.
The big exchanges can generate additional revenue by charging a commission for every trade done on the platform. As Localbitcoins is not centralized, but operates as a peer-to-peer platform, vendors often generate extra revenue by increasing their selling prices slightly. There is also the risk of selling Bitcoin to an individual who might try to get PayPal to initiate a chargeback. This results in prices being higher across the platform so that this risk can be mitigated.
Is it Safe to Trade on Localbitcoins?
Localbitcoins is a decentralized exchange. Users must therefore take specific safety measures to ensure that they can trade successfully. Although Localbitcoins has established a good reputation for being a trustworthy and safe place to buy and sell Bitcoin, it is always possible that unscrupulous vendors might use the site. To avoid possible scams and bad sellers, always take the following steps to protect yourself:
- Do your due diligence by scrutinizing a seller’s profile and verify they are a suitable trading partner. Where possible, only deal with vendors that have been on the site for at least a year, has a rating of at least 98%, and has done more than 100 Bitcoin trades. Also look for vendors that display company account details, as well as their email address and phone number. Ideally, the email address should not be a Gmail account.
- Only contact sellers and do a exchange through the platform. If you trade externally with vendors, you will forfeit the protection of the escrow service. For your own protection, only communicate through Localbitcoins’ message box and don’t ever send direct messages via text or email.
- Be as clear and detailed as possible when explaining your requirements and emphasize any issues you may have. Users may negotiate price, payment method, and the Bitcoin delivery method on Localbitcoins. It is important to finalize these important aspects of the trade before actually making the trade.
- If you are experience any problems or issues, or have doubts about a seller, contact customer support and use the forum. Although the site is very easy to use, users could still encounter problems.
Conclusion
Localbitcoins is a Bitcoin trading platform that is easily accessible.
The Localbitcoins team focuses on delivering a service that is beneficial to users and the general community. The site caters for private buying and can be used globally. It does not impose any limits on buying or selling, and allows users to buy by using of a number of different payment methods.
Users should however be aware that untrustworthy sellers might be using the site, while reputable sellers could have certain conditions when conducting a trade. Sellers make request ID verification for bigger trades and refuse to use a reversible payment method such as PayPal. Prices will likely be slightly higher than normal, as vendors elect to charge more for Bitcoin than what the bigger exchanges do.
