Buying and selling Bitcoins are basic necessities for both new and experienced cryptocurrency enthusiasts. Peer-to-peer services such as LocalBitcoins provide a fast, easy, and safe way to trade Bitcoins in a decentralized way.
What is Localbitcoins.com?
Historically, buying and selling Bitcoins has been associated with the risk of scam. Unfortunately, dealing cryptocurrency with individuals online often results in the loss of money. This is what brought a Finnish developer Jeremias Kangas to the idea of founding Localbitcoins.
Localbitcoins is a p2p Bitcoin marketplace that provides a decentralized way to obtain and trade Bitcoin. Started in Helsinki in 2012, the marketplace aims to connect those willing to sell and buy Bitcoins in a peer-to-peer way – that is, via direct user interaction without third party intermediation. The website allows users to create listings (advertisements), communicate with prospective sellers and buyers and obtain confirmation of the transaction details before finalizing a trade.
LocalBitcoins.com acts as a gateway into the world of Bitcoin trading for people from different countries. Unlike centralized bitcoin trading sites and stock-like exchanges, Localbitcoins enables direct trading with individuals from all over the world. Thus, the process is lean, fast and customizable, with escrow protection ensuring safety of both traders and buyers at every stage. The website has acquired a good reputation, with the site currently listing exchangers in 15582 cities across 248 countries.
This article will guide you through the process of creating a Localbitcoins account and buying/selling Bitcoins, as well as shed light on some of the most prominent features of the website.
Sign up & Log in
To begin with, new users can navigate to the Sign up free section in the upper right corner of the website and register an account. The procedure to do that is pretty straightforward and only takes a couple of minutes. Similarly, one can click on Log in to access the user account.
Registered users can proceed to search for Bitcoin sellers right away. Go to the main page and fill in the search form with the amount you want to buy, your location, and the preferred payment method. If you are not sure about the latter, just choose the option All online offers.
Following your search, a number of potential offers from different vendors will show up. You can check the reputation, trading history, and typical response time of each vendor (indicated by the color of the circle). You can also directly communicate with them to discuss the details of the deal. Naturally, it is recommended to opt for a vendor with a better reputation and a large trading history. Once the seller has been selected, you can start the actual trade by clicking the Buy button.
Here, you will see more information about the trade. Make sure you read through the terms of the trade and agree with them; if not, just go back and choose another advertisement. To start the trade, you have to specify the amount of Bitcoins you wish to buy, (optionally) type in the message for the vendor and click the Send trade request button. Only click the button when you are ready to pay since the trade will be automatically canceled if you don’t transfer the money within the payment window.
After submitting the payment, click the I have paid button. Once the trader has received and verified your payment, your Bitcoin will be released from escrow and will be made available in your LocalBitcoins wallet.
Overall, the process is quite straightforward. Besides, in case of doubt, the page features several hints on how to begin and contact the trader, how to pay online, and how to cancel the trade.
Similarly, it is possible to sell your Bitcoins through the platform. For that, go to the main page and choose the QUICK SELL option. Fill in the amount you want to sell and choose the preferred payment platform. If unsure, choose the All online offers option.
NOTE: some payment methods are considered high-risk. Since Bitcoin transactions are irreversible, it is recommended to opt for low-risk payment methods. You can read more about the risk levels in the Localbitcoins guide.
Choose a trader with a large and positive trading history and click Sell.
Again, you will see more information about the trade. Make sure you read through the terms of the trade and agree with them; if not, just go back and choose another advertisement. To start the trade, you have to specify the amount of Bitcoins you wish to buy, (optionally) type in the message for the vendor and click the Send trade request button.
Once you click the button, the bitcoins will be moved from your wallet to the escrow. The buyer will ask for your payment details (e.g. your bank account information). After that, the buyer will pay for the bitcoins and confirm it to you.
IT IS IMPORTANT to make sure that you received the money before releasing the bitcoins. Bitcoin payments are irreversible, so there is no way to get them back even if the money from the buyer does not show up.
Once you have received the money, you can scroll down and click the green Release Bitcoins button. This will complete the trade.
Security features of Localbitcoins
- An Escrow Service. During trading, the traded amount is sent to an escrow administration of Localbitcoins and is discharged only after the vendor confirms the funds received.
- Reputation Ratings. Traders are given a ranking based on their activity that is open for all to view.
- Customer Support. Localbitcoins offers quick and responsive support via email. The site also hosts a forum where users can discuss relevant issues and give out advice. The website also features an extensive FAQ section to answer most questions that may arise while using the platform.
- Conflict Resolution. Localbitcoins provides a conflict resolution service via its customer support team. The team carefully investigates the case and aims to resolve any disagreements between buyers and sellers.
- 2-Factor Authentication. 2FA allows users to confirm their sign-ins with a PIN code sent directly to their mobile phone. This provides an additional level of protection against hackers.
Trading on Localbitcoins
Apart from buying or selling Bitcoins through the existing advertisements, it is also possible to trade BTC by creating your own listings. The benefits of trading on Localbitcoins include:
- Localbitcoins is the largest p2p Bitcoin trading platform that continues to grow with more than 4000 new sign-ups every day;
- Access to a global marketplace with users from more than 100 countries;
- Quick and easy way to trade Bitcoins;
- Escrow protection for safe trading secures both the buyer and the seller;
- Reputation system for filtering trustworthy customers;
- Dynamic pricing system with hundreds of sources that ensures your prices are always up to date;
- API allows you to make your own trading applications to automate trading.
A complete guide to getting started with Localbitcoins trading can be found here.
Localbitcoins also charges a fee of 1% that is usually taken from the sellers (or the one who posted an advertisement). However, buyers should be aware that Bitcoin prices are generally higher on Localbitcoins than on centralized exchanges. The latter are able to generate revenue by charging fees across all the trades on their platform. However, as Localbitcoins is a peer-to-peer marketplace, vendors often choose to generate revenue by slightly increasing their selling prices. Vendors are also at risk to sell Bitcoins to individuals that may try to initiate a chargeback via PayPal. As a result, they choose to set higher initial prices to mitigate the possible risks.
Localbitcoins is one of the fastest and easiest ways to buy and sell Bitcoins. With Localbitcoins, users worldwide can trade BTC using a selection of payment methods. Due to its peer-to-peer nature, the experience of using Localbitcoins adheres to the true principles of decentralization of Bitcoin and cryptocurrency as a whole.
However, one shall be aware of untrustworthy buyers and sellers and take precautions to secure their trading experience. Reputable sellers, on the other hand, may ask for ID verification and refuse reversible payment methods such as Paypal. Prices may also be slightly higher in the network than on centralized cryptocurrency exchanges.
Overall, Localbitcoins is a tried and trusted Bitcoin trading method for both experienced cryptocurrency enthusiasts and those new to the field.
Where to store Bitcoins
Localbitcoins is great for buying BTC, but storing it online is not recommended due to the possibility of hacker attacks. To ensure the safety of your funds, consider transferring them into a cryptocurrency wallet such as Atomic Wallet. It is safe, user-friendly and full of amazing features such as Atomic Swaps and crypto staking. Check it out here!