Platform Reviews

LocalBitcoins Review: Bitcoin P2P Local Exchange

By August 22, 2017 No Comments

If you’ve been into cryptocurrency and Bitcoin for a while, then you would know how hard it is to buy them with a credit card or PayPal. Not to mention cash.

LocalBitcoins allows you to find local traders and do a face-to-face, or an online transaction, directly with the seller.

Yes, you can meet up with a seller in real life and pay for Bitcoins with cash. While it may sound suspicious, if you take necessary precautions and follow the security rules, you can enjoy the true decentralised nature of Bitcoin.

Our LocalBitcoins review will look into all aspects of the platform, from the security, fees and customer service. We also give an advice on how to use LocalBitcoins in the most protected way!

LocalBitcoins: Overview

LocalBitcoins review homepage

Name: LocalBitcoins
Website: www.localbitcoins.com
Type: P2P Bitcoin Exchange
Cryptocurrency: Bitcoin
Fiat Currency: Any, depends on the country
Rating: 4.0/5.0

LocalBitcoins has been around since 2012 and it’s the most popular and secure P2P Bitcoin exchange. Buyers and sellers can trade Bitcoin directly all over the world, without going through the third-party exchange.

Founded in Helsinki, LocalBitcoins quickly spread around the world, offering an over-the-counter trading of Bitcoin. It works similarly to Craigslist or Gumtree, where sellers and buyers can advertise their services and trade Bitcoin either online or face-to-face.

LocalBitcoins brings back the decentralised nature of Bitcoin, meaning that there’s no third party involved in the transaction.

As the name itself suggests, the platform works locally worldwide. You can always check online, based on your location, who’s advertising.

LocalBitcoins offers an online and face-to-face trading, but it also has an online trading which is more convenient and secure. You will be selling or buying with the use of LocalBitcoins Wallet.

Local trade means that you will meet with the other party in real life and buy Bitcoins directly. It’s not the most secure way, and there has been a lot of scams and theft, but it’s the most anonymous way nowadays.

One thing you may be surprised with is the difference price of Bitcoin. Unlike with the official exchanges, LocalBitcoins’ sellers decide themselves how much they want to trade Bitcoins for. Remember, the price fluctuation is very high, and depending on when the seller invested, they might want to sell at a different price.

The difference is never very big, but if you’re looking into buying a significant amount, it might be worth it.

LocalBitcoins: Supported Countries

LocalBitcoins is available worldwide, with the exception of Germany and the New York state due to the local regulations.

The bigger is the country and city that you’re based in, the higher are the chances of finding more trading opportunities.

LocalBitcoins: Cryptocurrency Offered

Currently, LocalBitcoins only offers Bitcoin. So far, there are no plans of expanding to other cryptocurrencies.

LocalBitcoins: Verification Methods and Privacy

LocalBitcoins Review Security and privacy

Unlike any other exchange, LocalBitcoins doesn’t require more than just an email. As soon as your account is setup, you just have to confirm the email address, and you’re ready to trade.

However, most traders require a verified ID to start doing business with you. Especially if you’re looking into larger amounts.

LocalBitcoins offer a two-way trade: online or face-to-face.

The online trade offers an additional escrow service which increases the security level. It keeps Bitcoins on the LocalBitcoins wallet, so if you’re a seller, you will be protected until the buyer pays for the purchase. If you’re a buyer, and the seller won’t send you the purchase, it still can be released from the LocalBitcoins wallet and the seller will be penalised.

Keep in mind that local trading is excluded from the escrow service and you won’t be protected by LocalBitcoins.

LocalBitcoins has an integrated wallet, through which you can trade but you have to remember that it’s never safe to keep your funds on an exchange. As soon as the trade is done, make sure to transfer your Bitcoins to a secure hardware wallet.

If you want to add an additional security layer to your account, follow these steps:

#1 Check the reputation of each trader – it’s a public ranking that shows past activity; it’s similar to eBay or Amazon rating
#2 Use the escrow – when you request a transaction, the fund will be held on the LocalBitcoins’ escrow service until the trade is completed
#3 2FA – it’s a two-factor authentication that will require an additional PIN code sent to your mobile phone
#4 Login guard – LocalBitcoins can verify that you’re always logged in from the same browser; if you log in from a different browser, an email verification will be required

LocalBitcoins: Buying/Selling Limits

LocalBitcoins doesn’t impose any limits on the amount you would like to buy or sell. It’s up to users to decide individually how much they are willing to trade.

LocalBitcoins: Accepted Payment Methods

One of the most attractive aspects of LocalBitcoins is the variety of payment methods. It’s up to a seller to decide which method they want to accept, but you will have a choice from:

  • Paypal
  • Bank transfer
  • SEPA transfer (Europe only)
  • Western Union
  • Webmoney
  • Cash by mail
  • Cash (in person)
  • Credit/debit card

Even though LocalBitcoins accepts PayPal and bank card payment, you should keep in mind that the transaction fee will be much higher. Bitcoin transactions are irreversible, unlike PayPal and card transactions. Hence, it puts traders in a higher risk of canceling the transaction.

LocalBitcoins: Fees

If you’re looking only to buy Bitcoins then LocalBitcoins is free to use. The site only takes 1% commission from sellers.

As a trading place, it’s one of the cheapest in terms of the transaction fees. Just don’t forget that you will have to pay the standard mining fee before Bitcoins get send to your wallet.

The sellers don’t change any extra fees, they charge an exchange rate for a specific payment method, so make sure to check that before you choose a seller.

LocalBitcoins: Customer Service

LocalBitcoins review customer serivce

Going through dozens of reviews, there are hardly any complaints about LocalBitcoins’ customer service.

The platform has an extensive FAQ section where you can find most of you answers. If you have a problem with your account or another trader, you can open a Support Ticket, and one of the members should get back to you within 24h.

LocalBitcoins also has their own guides on how to buy and sell Bitcoins, security and trading tips.

You have a choice of pretty much all Social Media, from Facebook to Reddit. If you need an instant support and make sure that somebody gets back to your query, you can tweet LocalBitcoins or post on forums and get a reply from a community

LocalBitcoins: Interface & Mobile App

In comparison to other, well-known, exchanges, LocalBitcoins doesn’t have the most inviting interface. Rather simply designed, LocalBitcoins lacks in a modern design.

On the other hand, it’s an extremely easy service to use and it would be difficult for anyone to get lost on the website.

LocalBitcoins doesn’t have a mobile app, instead, users are redirected to the mobile friendly version of the website.

LocalBitcoins: Who Is It For?

In our opinion, if you’re a newbie to the cryptocurrency business, don’t start off with LocalBitcoins. The service is great for anyone who already has an experience and knows what to look for in a reliable seller.

But, if what you’re looking for is the anonymity, it’s the safest option you can go for. Some of the sellers will ask for a fully verified ID but you may be lucky and find one who will be willing to skip that step.

LocalBitcoins isn’t also the best exchange if you’re looking into trying out Bitcoin investing and want to buy or sell a small amount. While there are stories of scams and dishonest sellers, other than that the network is filled by professionals.

There are loads of ways you can meet up with sellers, however, you should always avoid meeting in secluded areas or without letting anyone know. Anyone who’s new to Bitcoin may find it overwhelming.

Anyone who’s a new LocalBitcoins user – whether you’re a Bitcoin rookie or a veteran – should prepare themselves to be patient. Some of the sellers may not want to deal with you because you haven’t build your reputation yet and you lack recommendations. With time, you will earn more trust and feedback from other traders, but at the beginning, it may be more difficult to do the first transaction.

You will have to prepare yourself for trading with less trustworthy sellers until you build your feedback. This doesn’t mean you shouldn’t follow the necessary precautions and start with smaller amounts.

LocalBitcoins: How To Use It Securely and Not Get Scammed

localbitcoins review how to use it

Unlike the traditional Bitcoin exchange, with LocalBitcoins you’re dealing with traders directly. And even though the platform is great, the traders are not always trustworthy.

It’s easier to find a credible buyer, but it can be harder to find a reputable seller. At the end of the day, you’re dealing with individuals so you have to follow necessary precautions to avoid any possible scams:

Choose the seller wisely

One of the biggest mistakes a rookie can make is to choose a seller based on price. It might be worth to pay slightly more but trade with someone who has an established reputation. If you look at the seller’s transaction history and the recommendations, you will know if it’s someone you want to do business with.

Once you find a seller, check the LocalBitcoins forum to make sure there are no complaints or unresolved issues. If not, then you should go ahead with the trade.

These are the things you should check while looking for a seller:

  • Transaction History – minimum of 100 trades with over 100BTC sold
  • Feedback – at least 98% in the last few months
  • Account Age – at least 1 year
  • Verification Level – check if a phone number, email, and ID have been verified
  • Trust Level – minimum of 10 trusted people and hasn’t been blocked by anybody

Communication with the seller

Once you choose the seller, you will have to message the person and request a trade. Don’t use their phone number or email, make sure to use the LocalBitcoins messaging box.

When you make the initial contact, send the payment and mark it off as send. Make sure, you don’t mark it as sent before you make a payment, otherwise, you will be denied a trade.

Now, you just have to wait for Bitcoins to arrive at your LocalBitcoins account. If you’re making an online transaction, you’re automatically protected by LocalBitcoins escrow. Hence, if you never receive the purchase, LocalBitcoins will release them to you anyway.

However, if there are any issues arising from the transaction, try contacting the seller first and then move on to notify LocalBitcoins. Some problems can be resolved between traders.

There are few things you SHOULD NOT do while contacting the seller:

  • After the initial request, don’t send any additional information before the seller gets back you
  • Don’t agree to do the trade outside the LocalBitcoins as you won’t be protected by the escrow service
  • Don’t send the payment information through any other way but the official LocalBitcoins messenger

LocalBitcoins: Rating

Without a doubt, LocalBitcoins is the best P2P Bitcoin exchange. It has proven over the years that it’s not only secure but also gives an opportunity to buy Bitcoins with cash. Hence, we awarded it 4.0/5.0 stars!

If you follow the proper security procedures, you will likely avoid frauds and scams. But we couldn’t ignore the fact that the network has shady sellers and it requires time and research to find a trader you will trust. Especially, if you’re from a smaller country and the pool of available face-to-face sellers is not so big.

However, having the convenience of buying Bitcoins with a credit card or via PayPal is something rare in the crypto-world. Here, you can do that and have more anonymity than with a traditional Bitcoin exchange.

If you choose sellers with a good reputation, opt for an online trade rather than face-to-face and follow the required security procedures, you will be more than fine using LocalBitcoins.

And if you’re at the beginning of your journey with LocalBitcoins and you’re struggling without having recommendations, be honest about it. Put in your profile description and try to connect with other traders.

What do you think of our LocalBitcoins review? Have you ever used it yourself? Let us know in the comments below!

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Megan Frydel

Author Megan Frydel

Megan is a self-thought blockchain enthusiast. She enjoys combining finance with technology, from a less-techy perspective. BiteMyCoin is her most recent project underneath the umbrella of an international digital marketing agency ANCHOVY.

More posts by Megan Frydel

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