What is LocalBitcoins?
LocalBitcoins is about the most populous Bitcoin exchange in the world. They have been around since 2012 and available in all countries of the world. In this platform Bitcoin buyers and sellers come together to make exchange while local Bitcoin act as the ‘escrow’.
I have used Local Bitcoins successfully in the past and I do still use it sometimes. I have reviewed other Bitcoins exchanges that use the escrow system like Remitano. So today on the request of my readers I am writing this review on Local Bitcoins; I 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, Local Bitcoins 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.
What Cryptocurrencies are Traded in LocalBitcoins?
- All Countries
LocalBitcoins Review 2017- Payment Methods accepted on LocalBitcoins
There are various payment methods accepted on Local Bitcoins however they depend on your country and the sellers preferred payment method. The main accepted methods are:
- Cash (in person: if you are in close proximity with the seller)
- Wire Transfer
- Bank Transfer
- Western Union
Each Payment method attracts its own fee. For example, if you are doing a bank transfer to another bank in Nigeria you will pay a fee of NGN100 Meanwhile its free for same bank transfer. Wire Transfer to another country attracts more fee to both the seller and buyer.
Since you are paying to individuals, you will not likely see a credit card payment method. However, you can use credit/debit card via Paypal payment method. Paypal payment method is also rare on Local Bitcoin since it is a high risk to the seller – this is because sellers are not insured by Paypal when selling Bitcoin. Also, payment made via Paypal could be reversed but Bitcoin received cannot be reversed.
Having said this, the easiest and most common options are bank transfer, cash payment, and wire transfer.
Transaction Fees on LocalBitcoin
A fee of 1% is charged on Sellers for sold Bitcoins, this fee is paid to LocalBitcoins in Bitcoins. Buyers don’t pay any fee; Sellers pay the 1% fee – this statement is not totally true. Because Sellers charge higher rates in their listing to accommodates for this fee so it all falls back on the buyer.
Also note that when you receive Bitcoin in your local Bitcoin wallet, you will need to pay the standard Bitcoin transfer fee to move the bitcoin to your personal wallet.
There a various measure taking to ensure the security of trading on LocalBitcoins:
- Reputation System: Past trading activity of each Trader is made public for individual assessment
- Escrow: This has been explained above.
- 2 Factor Authentication (2FA): The 2FA is an optional feature; It simply means that on each log into your account, you will have to enter a pin code that will be sent to your phone.
- Login Guard: Each time you log in from a different browser or IP, you will be required to verify it’s you by clicking on a link sent to your email address.
- Support and Conflict Resolution: LocalBitcoin has a support team 24/7 ready to answer questions and resolve conflicts if any.
What are people saying about LocalBitcoins
A lot has been said about LocalBitcoins and a lot is still being said. You can check out community opinions searching LocalBitcoins on Facebook, Reddit, Bitcointalk.com etc.
Most opinions identify the site as being legit. But since you are dealing directly with an individual on the site you have to take caution because people are not always trustworthy. Although LocalBitcoins have put measures in place to prevent/discourage scammers, you can never be too careful because people still get scammed. I have taken time to highlight measure you should take so as not to get scammed on LocalBitcoins.
How to Buy Bitcoins on LocalBitcoins and not get Scammed.
This Guide ensures you are 99.99% safe when trading on LocalBitcoins
Step 1: Choose the Right Seller
The top listed price is usually the cheapest, it might be tempting but ‘NEVER CHOOSE A SELLER BASED ON PRICE’. Sellers and Buyers are filtered based on their IP. You are only shown Sellers and Buyers from your geo-region. When choosing a seller, follow these rules. They are strict but if you don’t want to lose your money, you should follow them:
Make sure that:
- He has traded over 100 BTC in total on LocalBitcoins
- He has at least 100 confirmed trades
- He has at least 100 trade partners
- His feedback score is at least 98%
- His account is being active for at least 12 months
- He has a verified phone number, email and company account.
- He is trusted by at least 10 people.
All this information can be found on the seller’s public profile.
Step 2: Initiate a communication with the Seller
If the seller meets the above criteria, send a message to him requesting a trade, do not provide any other information about yourself until you receive a reply.
Step 3: Make Payment
Once you receive a reply and feel comfortable to buy from seller, make payment using the details provided by the seller on LocalBitcoins. After making payment, Mark payment as ‘made’. (only do this when you have made payment or else you might be denied transaction)
Wait, your Bitcoin will be released to you by LocalBitcoins’ escrow once the seller confirms reception of your fund. If you have any issue, try to resolve it with the seller first before contacting the LocalBitcoins Customer Support.
- Never you trade outside LocalBitcoins with seller even if he offers you a lower price. If you do so, you will not be protected by the LocalBitcoins escrow hence you might get scammed.
- Send your payment details the to the seller using only the LocalBitcoins Payment interface. Do not send it to email or another medium.
- Once you have bought Bitcoin, always move your Bitcoin to your personal Bitcoin Wallet. Do not leave it in LocalBitcoins wallet.
What is my Conclusion?
LocalBitcoins is a legit platform to buy or sell bitcoins. Its Reputations has made is survive through the years. However, LocalBitcoin only connects buyers and sellers to trade bitcoins and modulate the process. They do not sell or buy from a user directly, so the integrity of the system depends on the person you are dealing with. When you strictly follow the steps I highlighted above, you are 99.99% guarded against scam.
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