At LocalBitcoins.com, people from different countries can exchange their local currency to bitcoins. The site allows users to post advertisements where they state exchange rate and payment methods for buying or selling bitcoins. You reply to these advertisements and agree to meet the person to buy bitcoins with cash, or trade directly with online banking. Bitcoins are placed in LocalBitcoins.com web wallet from where you can pay your bitcoin purchases directly.
Localbitcoins is supported in the India, UK, US, China and in over 248 countries around the world. However, the site does not support operations in Germany and New York.
The company started in 2012 by Nikolaus Kangas. Its headquarters are in Helsinki Finland. The company also has media coverage on big platforms such as Forbes and Business Week.
Localbitcoins has no limitations in place on the transactions conducted on its site. When you find a suitable buyer or seller, you are at liberty to trade as much as you are able to. Though price will have a particular range, the seller is free to set their own prices.
The platform has developed its worldwide presence where people can exchange their local currency into Bitcoins. The motto behind this company is to connect everybody to Internet economy and develop a community of Bitcoin enthusiast.
We have used Local Bitcoins successfully in the past and We do still use it sometimes. We have reviewed other Bitcoins exchanges that use the escrow system like Remitano. So today on the request of my readers We Are writing this review on Local Bitcoins; We have written a concise but well-detailed review on LocalBitcoins; all you need to know and steps to take to avoid getting scammed.
LocalBitcoins Review – What is Escrow?
Escrow a strategy employed by some Bitcoin exchanges like LocalBitcoins where buyers and sellers of Bitcoins trade directly with each other. To ensure fairness of trade; When a buyer indicates interest to buy bitcoin from a seller, the seller’s Bitcoin is held by Local Bitcoin in an escrow. When the buyer pays the required amount to the seller, LocalBitcoins will release the bitcoin to the buyer once the seller confirms reception of fund. In case of a dispute, the buyer will have to provide a proof of payment to LocalBitcoins support, the sellers will also provide a statement of account. Then the issue will be resolved.
Benefits and drawbacks
May not be many sellers in some countries
Transfers can be very quick
Unlike dedicated money transfer platforms, you need to handle all transfer details yourself
Recipient can receive fiat currency through many methods
Some methods are considered high risk
Can be much cheaper than other bitcoin and general money transfer platforms
Exchange rates can vary wildly
Minimum and maximum transfers
No minimums or maximums set by LocalBitcoins
Buyers and sellers may set limits
Offers online trades
In-person trades can be cumbersome
Customer service options
Quick responses to online support tickets
No phone support
Localbitcoins Login & Register
Localbitcoins works as a decentralized marketplace, and allows people to trade Bitcoin directly. To start off, new visitors to the site can navigate to the signup page and register an account.
Once an account has been created, you can now begin to search for Bitcoin sellers in your area. The site allows members to conduct a wide variety of searches, including seller location, accepted payment methods, and ID verification requirements.
To complete a money transfer through bitcoin, you’ll need to take these basic steps:
- You use fiat currency — government-issued money like US dollars, euro and yen — to buy bitcoins.
- You transfer the bitcoins to your recipient.
- Your recipient sells the bitcoins for the fiat currency of their choice.
Here’s how to do that in few steps.
1.When conducting a search a number of possible vendors will show up, You can check the reputation and trading history of each vendor and also communicate directly with the seller in order to discuss any relevant issues. Once the search and verifications have been completed, it’s possible to start the trade by clicking on the “Buy” button.
From here it’s possible to complete the purchase of Bitcoin from the vendor. Before buying, it’s necessary to confirm the amount you would like to buy, your method of payment, how you would like to receive the Bitcoin, and if agreed upon, the form of ID you will be using.
2. Transfer the funds.
When you initiate a trade, you’ll go through LocalBitcoins’ escrow process. Basically, this means that you send money to LocalBitcoins — not the seller. At the same time, your trade partner will send bitcoins to the platform.
When both you and the seller have sent the funds, LocalBitcoins will release the bitcoins to you and the money to your trade partner.
3. Send bitcoins to your recipient.
After you’ve purchased bitcoins, send them from your LocalBitcoins wallet to your recipient’s wallet.
4. Your recipient sells the bitcoins.
Finally, your recipient can sell the bitcoins on LocalBitcoins for the fiat currency of their choice.
LocalBitcoins respects the anonymous nature of Bitcoin, so it doesn’t have a mandatory I.D. verification, and it doesn’t require any personal details.
Email address is the only thing needed for signup. While the exchange doesn’t require any personal information, some sellers or buyers may request identification in order to proceed with the trade.
When it comes to fiat currencies, users are free to trade in any currency, which means that if there’s someone willing to accept your local fiat currency, you can buy Bitcoins for it.
The exchange allows only trading with fiat currency for Bitcoin. No altcoins are supported.
What Makes LocalBitcoins Different than Other Bitcoin Exchanges?
On LocalBitcoins.com you are dealing with humans. Unlike centralized, stock-exchange-like, bitcoin trading sites, you make a trade directly with another person. This makes the process lean and fast, as there is no corporate overhead. You get your bitcoins instantly. Also, LocalBitcoins.com can support every payment method its user community supports. For every transaction, LocalBitcoins.com offers escrow or transaction service to protect the buyer of bitcoins.
The difference between Local Bitcoins and most exchanges is that LocalBitcoins does not require personal information when making good trades.
Unlike other exchanges, which require ID verification and personal information, Local Bitcoins allows you to buy bitcoin without connecting your name to the bitcoin you’re buying.
What types of transfers does LocalBitcoins support?
LocalBitcoins supports a fairly good selection of payment methods in fiat currencies, depending on the personal preferences of the traders and the nature of the platform as a P2P exchange. There is the option to pay in cash (a very rare option, but could be handy for face to face interactions), national bank transfer, European bank transfer (SEPA), the wire transfer services MoneyGram and Western Union, cash by mail, cash deposit, credit card, MoneyBookers, Neteller, Skrill, Paypal and even Amazon Gift Card. Of course, some payment methods come with additional commissions and fees.
LocalBitcoins Exchange Fees
If your intention is just to buy Bitcoins, then you can freely utilize LocalBitcoins. The website only takes one percent (1%) commission taken from the sellers. However, one should remember that when the BTC are in your own account already, a payment for the Basic network fees is gonna be required so that you store your money in your personal Bitcoin wallet.
It’s highly advised not to keep your Bitcoins around in a LocalBitcoin’s wallet but transfer it as soon as possible to your own Bitcoin wallet.
The vendors can have the transaction charge for free as well, however they will have to pay for bigger amount of exchange rates, therefore you might as well take note of this when having a trade.
How To Secure Your Localbitcoins Trading
Various measures are utilized in LocalBitcoins in order to have a secure and safe trading:
- Reputation framework – All trader has a notoriety rank and also an open history records showing their past activities.
- Escrow – Upon an exchange, the cash you sent are kept on the escrow administration of LocalBitcoins. They’re discharged just upon the vender’s affirmation of a successful exchange.
- 2FA – which means two factor authentication enables anyone to avoid their accounts being hacked through having an extra PIN CODE being sent to your mobile at whatever point you sign in to your own account. This process should be personally enabled since it’s not enabled readily.
- Login protect – It is utilized to confirm that you’re just simply using a similar web browser after signing in. If it’s a different web browser, email authentication is needed.
- Support and conflict resolution– For occasions when a client has inquiries and issues, LocalBitcoins gives a customer support team for the purpose of answering and resolving these things that may happen in between buyers and sellers.
Support team on LocalBitcoins is well organized and competent. Their FAQ section is quite thorough, and they offer special forms to report phishing, lost two-factor authentication or password.
They only offer support via email, but overall service is excellent. The support team typically answers within 1 hour.
Community feedback About LocalBitcoins
We love to scout major Bitcoin boards such as Reddit and BitcoinTalk. When you spend time on any of the threads here, you will see that people have various opinions concerning this Bitcoin exchange.
Generally, many people say that this platform is good to transact on. The only problem has to boil down to the people you are dealing with during transactions.
For that reason, the buyer always needs to exercise caution by following some general rules.
How to obtain Bitcoins at Local Bitcoins without getting Fool
You cannot choose a seller based on their exchange rate. If their exchange rate is too good to be true, you have all reasons on earth to doubt them.
The seller should meet these qualifications:
- Has a feedback score of 98 percent or higher
- Has traded over 100BTC in trading history
- Has successfully completed at least 100 trades
- Has an account older than a year
- Is verified seller
- Is trusted by 10 or more people
On the other hand, you need to remember that reputable sellers will have a higher exchange rate such that one may even incur 5% or more to do business with them.
We are believing that you have already zeroed in on the seller based on their location and payment method.
What you need to remember is that it is better to pay more and deal with a legitimate user than to pay less and risk being scammed.
Of course you also need to check their reputation just to see how he has been doing in the past. This information should be readily available.
The other precaution that you should take is to make sure that you are not posting an ad informing users that you want to buy Bitcoins. If you do so, it will just attract many scammers.
The best thing to do is look for those who are actively selling BTC as they are probably more trustworthy than those you will attract if you post an ad like this.
The next step is to head over to their profiles and see if they have traded over 100 BTC in their lifetime and if they have they have processed at least 100 trades through the platform.
Their account have to be at least a year old. Their feedback score needs to be decent. That can be around the 98% mark.
The other thing to check is whether their contact and company details have been verified by Local Bitcoins. Last but not least, you need to see if they have been trusted by at least 10 people in the past.
Now, if the above conditions are a little bit tough to find, then your best bet is to find the closest person who can fit 90% of conditions mentioned above. We mean you just have to find the next best thing even if you can’t find someone who fits these requirements.
The last thing to do is probably conduct a search of their name on Local Bitcoins forum. If people have complained about them here, that’s a bad sign. If you find nothing, you’re good to go.
LocalBitcoins is among the oldest and largest P2P cryptocurrency exchanges and those are perhaps its major advantages, in addition to the large number of payment methods for fiat currencies.
The main risk is that a trader is dealing directly with other traders and one may come across a scammer. LocalBitcoins does take precautions against fraudulent activities, such as holding the bitcoins in escrow until the payment is confirmed, but there is always the risk of chargeback and one remaining without bitcoins and fiat money. This is why most traders require user verification with a government ID and the platform advises to avoid high risk payment methods like PayPal and credit cards.
Obviously every now and again LocalBitcoins comes under the scrutiny of various national authorities across the world, but in fact its activities are not illegal. The problem is that they are not regulated, either, and its clients are left at the safety measures of the platform itself and the honesty of the traders, so we’d say using its services is somewhat riskier than that of centralized spot trading platforms.