LOCALBITCOINS – EXCHANGE REVIEW & USER GUIDE
The eBay of Bitcoin, LocalBitcoins provides an over-the-counter marketplace to bring buyers and sellers together with no middleman, and in turn, the lowest fees available
- Direct peer-to-peer trading
- Feedback rating system
- Largest range of payment methods
- Bank Transfer
- Google Wallet
- Gift cards
- And more...
- Free trades between buyers and sellers
- No verification required
- Anonymous buying and selling crypto
- Easy-to-use platform
- Only bitcoin transactions
- No advanced trading features
- Transactions must be completed off-site
EASE OF USE
It can take awhile to get comfortable purchasing bitcoin on LocalBitcoins.com.
Transactions are completed through a series of steps, which include payment off-exchange and coordination between users.
It will most likely take several back and forths between another user just to complete one transaction, which is a vastly different experience than utilizing an order book on an alternative centralized exchange.
If there is a problem, disputing a transaction can be a hassle and leave users wishing they used another exchange.
The one big upside for LocalBitcoins is the elimination of user verification, allowing users to go from registration to transaction in a matter of minutes.
LocalBitcoins is exactly as its name describes, an exchange to trade bitcoin and bitcoin only.
This extremely limited choice of coins is not great for investors looking to diversify their cryptocurrency holdings.
Is LocalBitcoins safe? As a peer-to-peer network, trust on LocalBitcoins comes less from the exchange itself and more from the users transacting on it. A user feedback system makes for a secure way to get a sense of the users trading on the network.
This puts a lot of faith in other users and not a centralized third-party, which will make some users happy, and others skeptical.
Scammers have been found on the exchange, which degrades the quality of the platform, although most users are transacting honestly with one another.
A layer of trust is added with the use of multi-signature escrow wallets to secure Bitcoin while fiat currency is being transferred.
This ensures the seller cannot go back on their side of the transaction, and usually ends up working out for both parties.
The people transacting on LocalBitcoins have generally come to embrace the peer-to-peer nature of the Bitcoin economy and have respect for the exchange and one another.
The only piece of information needed is an email address to register for an account.
There is no personal identification verification to give over, and transactions can be done directly with another user and not via a third party.
Depending on the payment method involved, sellers may choose to provide bank account, PayPal, or other financial information, but nothing that will compromise identity or privacy.
The nature of the bitcoin blockchain is that wallet and transaction information are pseudonymous and public, but as far as bitcoin transactions go, LocalBitcoins is the most private way to purchase and sell the cryptocurrency.
FUNDING & WITHDRAWAL
As a peer-to-peer bitcoin trading platform, there are no deposit or withdrawal methods to speak of on the exchange except via bitcoin.
However, fiat purchases of bitcoin are completed off-exchange and can range the gamut of payment options, such as bank transfer, PayPal, and even cash for in-person meetups.
In that sense, LocalBitcoins offers the most payment options of any exchange. Withdrawals are limited to bitcoin only.
Without a third-party completing trades, LocalBitcoins can reduce fees to almost nothing.
There is zero fee for registering, buying, and selling bitcoin via the exchange, and only a 1% fee for users advertising on the exchange looking to find a trading partner.
Withdrawals to wallets outside of the LocalBitcoins network will cost 0.00005 BTC, a nominal fee compared to most exchanges.
Users will also have to pay the blockchain transaction fee that comes with transacting via bitcoin, but on the whole, LocalBitcoins fees are the best out of any exchange reviewed.
Support on LocalBitcoins.com is extremely low level, and it can take several days to get a response for an open support ticket.
The exchange has a FAQ section along with user forum to try and facilitate most of the problems users might have with the exchange, but it’s mostly made of user complaints and horror stories.
Luckily, disputes can be opened for transactions that do not go as planned, but arbitration on settling disputes can also be time intensive. Customer service on the exchange leaves a lot to be desired.
SPEED TO COIN
No verification process means users can get up and running in no time.
Payment for trades are actually made off-exchange and can vary depending on the method used.
Trade confirmation is also dependent on the peer-to-peer nature of the exchange, where the receiver of fiat must confirm payment before bitcoin can be released.
This back-and-forth process tends to slow down the speed of an individual trade, but still makes for a quicker experience than formal verification processes required by most other exchange platforms.
If the buyer and seller work together transactions can be completed rather quickly.
Signup - 5 minutes
ID Verification - N/A
Deposit - N/A
Trade - Instant to 2 weeks (depending on payment method used and communication between buyer and seller)
Withdrawal - Instant
Globally, trades on LocalBitcoins range from $75-$100 million daily, giving it a great deal of liquidity in the Bitcoin marketplace.
However, without an order book, users may find it takes some time to complete a trade at a price that they’re looking for.
Spreads between buyers and sellers can range drastically on the peer-to-peer network, where users must search individually for the trading pair that matches their needs.
Trading volume matters less on the exchange than finding the right buyer or seller for the payment method and quantity of bitcoin desired.
FEATURES & BENEFITS
Features are limited, as LocalBitcoins is a barebones exchange that only provides trading between users, so by design it’s intended to be a minimal system.
The user forum is a good place to get help from fellow users and discuss any questions or issues with the site, and a feedback rating system is extremely helpful when determining if a seller or buyer is trustworthy.
Mediators are used to assist in transactions that are disputed by one or more parties.
LocalBitcoins is one of the only exchanges offering in-person meetups to complete transactions, creating a community of cryptocurrency enthusiasts that continues to grow.
With the advent of so many cryptocurrency exchanges offering trading services, many people might wonder why there is a need for LocalBitcoins.
However, the ability to transact directly with another user on a peer-to-peer network, at no cost, provides a great service to those wanting to complete financial transactions off-site and anonymously.
Additionally, the option to meet in-person is a nice touch that helps create local Bitcoin communities.
Without having to give up personal information and go through a verification process, LocalBitcoins is a great exchange for secure, anonymous, private, peer-to-peer bitcoin transactions.
LOCALBITCOINS – USER GUIDE
LocalBitcoins provides one of the easiest signup processes in the industry, and with no form of identification or third party verification needed, you’ll be able to purchase Bitcoin in no time
1. Sign up
Register with a username, password, and email address to get started.
Agree to the Terms of Service by clicking ‘I agree’ to complete your registration.
Next, you will be asked to check your email for verification of your registration.
Be sure to check your spam if you don’t see the email appear immediately, as some email providers push LocalBitcoins emails to the spam folder.
Click the link to verify your email address, completing your account signup process.
Because LocalBitcoins is a peer-to-peer exchange, it doesn’t require any user identification verification to transact on the exchange so you’re immediately ready to start purchasing bitcoin once you’ve verified your email.
Enabling Two-factor authentication (2FA) is the recommended method of securing your account.
To do this, click the top-right drop-down then select Account security’.
Go to the 2FA section and click ‘Enable two-factor authentication’.
Choose between using 2FA on your mobile device or to receive a paper code.
You’ll then get directions on enabling 2FA. When ready, click ‘Proceed to activation’.
Using your mobile app, scan the QR code then type the authentication code.
After writing down your backup code, click ‘Enable two-factor authentication’.
5. Purchase Cryptocurrency
The first step to purchasing bitcoin is to search for the amount and type of fiat currency you would like to spend in the Quick Buy bar at the top of the Buy bitcoins screen.
Next, search through the listings to find the transaction that works best for you.
You’ll want to look at the Price/BTC, seller feedback, payment method, and fiat currency limit for the purchase.
When you have found a transaction that best fits your needs, click the Buy button.
The next screen will show the details of the trade and a note from the seller in the Terms of trade that gives you additional information for the transaction.
Choose how much bitcoin you’d like to buy, write a note to the seller, and click ‘Send trade request’.
Following this, it’s your turn to make the payment as outlined in the ‘Terms of trade’.
When submitting your payment, don’t forget to include the reference message so the seller knows the payment is from you.
After making the payment, mark the payment as complete.
When the seller confirms your payment, the BTC will be released from escrow (holding account) and delivered to your bitcoin wallet.
6. Trade/Market View
LocalBitcoins has a simple trading view that allows you to view the potential trades that best fit what you’re looking for.
- The top navigation pane allows you to buy, sell, and post trades on the exchange.
- Quick Buy and Sell templates are used to filter orders based on currency, amount, country, and payment method.
- After using the filter for Quick Buy/Sell, the corresponding results display with transaction information such as seller, payment method, Price/BTC and links to buy or sell bitcoin directly.
Withdrawing bitcoin is fast and easy, and requires nothing more than the wallet address to send the cryptocurrency.
First, navigate to the Sell bitcoins page on the top navigation pane.
Copy and paste the wallet address you would like to send your bitcoin in the ‘Receiving bitcoin address’, as well as the amount of bitcoin to send.
You can also add a description to the transaction if needed.
Once all of the information is entered correctly continue to complete your bitcoin withdrawal.
Bonus Tip – LOCALBITCOINS ATM
LocalBitcoins operates ATM machines for bitcoin deposits and withdrawals.
These machines are simple and operate as cash boxes, and allows exchange of bitcoin for cash, and vice versa, in a matter of minutes.
LocalBitcoins ATM machines can be programmed to handle almost any of the world’s currencies and operators make money on the price spread.
LocalBitcoins is always on the lookout for ATM operators to purchase machines and place them in locations around the world.
You can contact the exchange if you’re interested in purchasing a machine, or be on the lookout for a LocalBitcoins ATM near you.