Paxful is a p2p Bitcoin trading platform founded in 2015 by Ray Youssef and Artur Schaback, it is based in 3422 old Capitol Trail, Wilmington, Delaware in the United States of America. Paxful is considered the “Uber of Bitcoin” due to the ease it brings to the purchase and sale of the currency; it is similar to LocalBitcoins but supports a lot more payment methods than its rivals ( Remitano, LocalBitcoins, BitkoinAfrica etc).
I have compared Paxful with remitano and LocalBitcoins in the past, however, this review intends to guide you through the features, pros and cons associated with trading in the Paxful platform.
Countries supported in Paxful
Paxful currently supports traders from every single country in the world. With the exception of traders who reside in the state of New York, U.S.A. this is because they have not obtained the required BitLicense to operate in that state. Anyone in the world can trade with Paxful even North Koreans (that’s if they succeed in blasting their way to a data connection). Although its services are not directed to a particular region or country, it gives special recognition to nations such as Nigeria, India, USA, Russia and China.
Setting Up an Account in Paxful
The process of setting up an account in Paxful is relatively easy. You can either provide your emails on the checkout page (the later stages of a buying process) or fill the registration form that can be found on the site.
After filling the registration form, a confirmation link will be sent to your email address. Click on the link and set up two security questions, these security questions will come in handy in an event where you forget your sign-in details.
As an alternative, you can verify your mobile phone number and opt to receive SMS Alerts from Paxful. At the bottom of the registration form, you can choose to receive email alerts from Paxful concerning your account activities and other important notifications, while you receive critical alerts via SMS.
Mails sent by Paxful are not encrypted and so should be treated with caution; even passwords are sent in plain text and can be read by a third party who has access to your devices. It is important that you keep such sensitive emails away from prying eyes.
Users who do not register directly but provide their emails during checkout will be automatically be assigned passwords, this password and the emails they used in the checkout process will serve as login details for further transactions.
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How to sell your Bitcoins on Paxful
Before selling on Paxful, here is what you need to know.
- The minimum amount you can sell is 0.001 BTC
- You will be charged 1% fee on any successful sale; this will be automatically deposited into escrow alongside the amount requested by your client.
- Paxful has a reputation system, where users are given the opportunity to rate each other according to their trade experiences.
- Once you make up to 50 different successful trades with above 20 different clients, you will be qualified to apply to become a verified vendor, your application will be considered if you have a high response rate and a success score above 33% (though at the moment only Canadians, Europeans and Americans can access this feature). Click here to learn more about this.
How to buy Bitcoins on Paxful
Buying Bitcoins with Paxful is relatively easy, all you need to do is:
- Choose the number of Bitcoins you want to buy
- Choose the currency you want the exchange rate to be in
- Select a payment method (Paxful accepts multiple payment methods)
A list of sellers will be displayed, you can either search through the list to pick a seller or request for the list of recommended sellers based on their past transaction records.
Upon choosing a seller and clicking on the trade button you will be redirected to the trade page where you can communicate directly with the seller through live chat, once you are satisfied with the sellers terms you can then proceed with making payments, after successfully sending payment to the seller/vendor, click “mark as paid” and wait for your Bitcoins to be deposited into your Paxful wallet.
The time it will take your Bitcoin to reflect in your wallet is subject to certain factors, the factors include your payment method and an active seller, online payment methods such as Paypal, gift cards, card transfer etc. are instant while others such as western union transfer, MoneyGram, and cash deposit might take longer pending on the time it takes your bank to process your cash transaction.
Here is how Paxful handles a transaction. When a buyer and seller reach an agreement and decide to trade, the seller will be required to deposit the amount of Bitcoin the buyer is willing to buy into Paxful’s escrow, at this stage the seller cannot cancel the transaction. This is to ensure that the buyer doesn’t make payment only to find out that the seller already cancelled the transaction.
Furthermore, the buyer is free to cancel a transaction at any time. Whenever a buyer does cancel a transaction; the Bitcoin will be transferred from Paxful’s escrow back to the seller’s wallet. Paxful has a payment timeframe, if a buyer fails to make payment within that timeframe and doesn’t hit the “mark as paid” button, the transaction will be cancelled and the sellers’ Bitcoin transferred back to his/her wallet.
The plus side of this platform is, you can buy Bitcoins with any currency of your choice and with several payment methods which include gift cards, bank transfer, credit/debit cards, cash deposit, hand to hand payment(if you reside close to a vendor) etc…
Although you can buy with any currency only Bitcoin can be bought in Paxful, you will be charged zero fees for buying Bitcoins. But, it is important that you pay attention to your currency conversion rates, these rates are charged by banks, for instance, sending money from Papua New Guinea to the United States will incur charges in exchange rates. (Put that into consideration.)
It is also important to note that not all currencies have offers; for example, when you search for currencies like KRW you will find no available offers for them. In cases like this, users whose local currency is KRW will have to request for offers and in the process be forced to negotiate for transactions that might see them pay more for fewer Bitcoins.
Most users including myself have found the platform’s interface to be smooth, clean and adaptable. It perfectly fits into numerous screen types and offers an array of options and an eye-catching menu.
Paxfuls website’s interface seems to focus on customer support. Its help menu is clearly visible and in it lays a comprehensive FAQ section and a customer support forum that runs non-stop, 24hrs daily.
The support forum is lively and active as questions are attended to in a timely manner. Although it is written that questions in the live chat section are replied to within 10 mins it took longer for me to get a reply, but once you get your first reply in that chat session, your subsequent questions will be replied within 5 to 10 mins, that seems to take the “live” out of the livechat.
The exchange rates in Paxful are slightly higher than what you find in regulated platforms, this is understandable because sellers here are taking on higher risk since they are dealing with complete strangers and can end up transferring their Bitcoins and not getting paid, giving the fact that Bitcoin transactions are irreversible.
Secondly, some sellers accept alternative and less traditional payment methods like (e.g Skype voucher codes, Amazon gift cards etc.), and so charge more for the convenience they provide.
Furthermore, sellers display their terms, conditions and service details so you will be kept abreast with what is expected of you, you can choose to accept or decline these terms. And can go into direct communications with a seller to negotiate terms.
Buying Bitcoins from Paxful is free as you will be charged Zero fees, however, sellers are charged 1% of the total sale amount in every successful sale. It is wise to note that, most sellers will simply integrate this fee on their exchange rate. And have you pay them unknowingly, this shouldn’t come as a surprise, as it is a common practice in such situations.
Trade with Caution
Paxful is a p2p trading platform where you trade with individuals from around the world, it will be unwise to trade carelessly and with money, you cannot afford to lose. Some people have had bad experiences in the past trading with platforms of this nature, and they sometimes mistake a seller’s integrity for the platforms integrity. What this means is, you might encounter a seller who will scam you of your money but that doesn’t mean you were scammed by the platform itself.
Reading online reviews you will find instances where users accuse the platform of sponsoring fraudsters and placing them on the list of recommended sellers, so they can defraud users of their hard earned money. What they fail to understand is, there are fraudsters who seek short term gains and there are those who think long term.
A fraudster can decide to sell his Bitcoins in the platform for as long as it takes to build his/her trade reputation because with a better trade reputation they will likely have access to larger trades as more people will be interested in trading with them. At this point, they can choose to defraud unsuspecting users of millions of dollars and gladly smile away.
Normally, when a user is defrauded by a seller with a good reputation he/she is likely to tag the platform as a scam platform not minding the fact that millions of people have successfully traded with the platform in the past.
Also, note that Buyers are more likely to scam unsuspecting Sellers. A buyer can click that he has made payment and upload fake evidence, if the seller releases this bitcoin without verifying the reception of the payment, he would have lost his bitcoin.
Here is how Paxful protects its users
- Each user is asked to set up 2-factor authentication especially through the use of Google Authenticator
- Authy and SMS verification can be used as an alternative to adding a second layer of protection
- Paxful list all logins performed by users and their last 20 actions, this is to let users spot account irregularities at a glance.
- During trades, the seller’s Bitcoin is sent to Paxfuls secured escrow and can only be released by the seller upon a successful confirmation by the seller that he/she has been paid by the buyer. Paxful’s hot wallet is secured by Multi-sig.
- The site has never been reported to have been hacked.
How To Trade Safely With Paxful
Some people are of the opinion that Paxful is Legit others think it is a scam, but whatever you are thinking, remember that millions of users have had hitch free transactions. And yes there are scammers in Paxful like every other P2P marketplace; it is your responsibility to pick the right vendor and trade safely. If you wish to trade safely, here are my recommendations:
Choosing a seller
The common mistake most people make is choosing a seller based on the rates they charge per Bitcoin, most scammers in their bid to get fast clients will place lower rates, this is meant to lure in people seeking for so-called “good deals”. At the end, the good deals will turn sour and so will their hard earned money. Rather than cheaper rates, here is what you should be looking for in a vendor.
- He has completed over 2BTC worth of trade with minimum of 30 trades
- His feedback score should be at least 98% from a minimum of 10 persons
- His account should have been active for over 2 months
- He has a verified identity, residence, phone number, Facebook ID etc…
- He has at least 10 partners
- He has a maximum delivery time you are comfortable with.
- Only trade with verified buyers and sellers.
Below is a list of actions you should never take to be safe.
- Do no trade outside Paxful with a seller even if he/she offers you a discount since you will lose the safety of trading with Paxful’s secured escrow
- Do not disclose more information about yourself to the seller when trade is ongoing
- Pay attention to the trade time to avoid transferring money to the seller after timeout
- Only send your payment information through the remitano interface and endeavour to check that the names in the account details are in consonance.
- Mark payments ‘as made’ only when you have paid or received payment else you be denied the trade
- Should you encounter any issues or sense irregularities with the seller or buyer endeavour to talk it out with the buyer or seller before proceeding to contact customer support. Customer support should be your last resort.
Paxful is a decent choice for the normal person who wishes to buy Bitcoins without being charged transaction fees. It has low fees, a wide variety of payment methods and is easy to trade with. If you follow the instructions listed in this post, you’ll surely have a pleasant experience with Paxful. All the best.
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