What is the LocalBitcoins exchange?
The LocalBitcoins exchange is different to most other platforms – as it is a site where you can find people who own Bitcoin – so you can contact them directly to trade in the currency. Users to the site create adverts for the buying and selling of bitcoin and these are made available for searching by others on the site. Essentially, in simple terms, it a genuinely open, peer-to-peer marketplace for Bitcoin – similar to the classifieds in a newspaper.
The LocalBitcoins exchanges was established in 2012 by a company in Finland. The site acts like a gateway for those wishing to get started in the buying and selling of cryptocurrency. If the volume of users is a positive certificate for a site, then LocalBitcoins does well. It lists users in nearly 16000 cities – in over 240 countries around the world.
How LocalBitcoins works?
To get started on LocalBitcoins you will need to register for an account. The initial demands for setting up an account are low – with just the need for an email address and a password to get started. As you can be filtered from searches because of your level of verification, it may also be worth going through the identification and validation process. It would not be surprising for most newbies to cryptocurrency to refuse to go near anyone who demanded the right to be anonymous – even if this is one of the major tenets of virtual currency.
Once signed up and with profile created, it is then possible to search for vendors using location, accepted payment methods and more. Once you have found the vendor, you can communicate with them directly to discuss issues relating to the trade. You can start the trade simply by clicking buy on the listed advertisement. You will then agree the payment method, how you will receive the Bitcoin and if it is necessary to provide ID and in what form.
There are lots of payment methods – mostly because it is possible to meet up with the person and make the trade – receiving your Bitcoin unique code on a piece of paper potentially. This means you can offer cash on deliver, cash via mail, PayPal, Webmoney, Western Union and wire exchange.
If you are worried about how safe it is to trade this way – the site offers an escrow service – where funds can be held on the site to ensure that the trade is completed honestly. This means the funds are only discharged when both parties have fulfilled the obligation of the trade. You can also judge whether the person advertising Bitcoin are worthy of working with by their reputation ratings and feedback. Obviously, everyone will naturally start at 0 ratings – but if you are new and you are worried about this – then it is best to go with someone who has 10+ successful trades with feedback.
The unique selling point of the site is that you can see the Bitcoin sellers on a map of your city. You can see where they are located and potentially meet up for coffee. This makes a global currency accessible in your neighbourhood – and for most the personal touch will be reassuring.
Key information about LocalBitcoins
Before we offer you our LocalBitcoins review it is important to provide you with some important information and allow you to make your own judgements first. The key information relates to security, reliability and fees.
The site is acting merely as a mediator between two traders. This means that no funds are held on the site as such. Even so, the site offers 2 Factor Authentication – and there is an additional PIN code that adds an extra layer of protection against hackers to your account.
As mediator, the site offers a conflict resolution service. This means they acknowledge the potential for there to be problems between clients. However, they have a support team who will investigate and then resolve this disagreement. There is also customer support via email – which offers a relatively quick response to queries. Another positive is the sites forums – where you can discuss any issues and receive advice – this helps new users navigate potential glitches and problem users.
As this is a truly decentralised site, the onus for proper security measure is placed on the user. It is up to the individual to initiate safe trading practices and ensure that the person they are trading with is legitimate.
The fees on the site will seem high in comparison to other exchange. LocalBitcoins demands a 1% commission from the seller – that is the person placing the advert on the site. There is no fee for buyers – although the prices they will pay for Bitcoin on the site are likely to be higher than an individual would pay elsewhere – as there is no mechanism for generating the best price or setting a market price – the price is dictated by the seller and in turn what the buyer is willing to pay.
Your LocalBitcoins Review
Positives
- you can literally meet someone in a coffee shop and make the trade – it is local with a capital L. There is something particularly reassuring about knowing there is a real person behind the virtual currency – especially for beginners
- the interface is simple and setting up a trade is as easy as clicking buy
- there is good support service through the site to allow for conflict resolution and security of the deal – if the user chooses to take up these features
- it is easy to search and check out the sort of seller you are wishing to trade with – but remember the onus is on you to protect your own funds.
- you can pay in cash
Negatives
- you can only trade in Bitcoin
- you will pay more for your Bitcoin on this site
- get the wrong seller – or buyer for that matter – and the trade can become messy quite quickly
Overall LocalBitcoins Review
Our overall LocalBitcoins review comes with a thumbs up. The site offers something different for users – and allows those new to trading the security of knowing there is a real person out there in virtual land.