This review concerns LocalBitcoins, an online peer-to-peer (P2P) exchange that offers services regarding cryptocurrencies. The information that you will get from this article will help you choose the best option available to you as a trader.
The investigation contains personal take on the online business, with pros, cons and concluding remarks serving as a general remark on the exchange.
About the Exchange
LocalBitcoins is probably one of the largest P2P marketplaces where traders can purchase and sell bitcoins between each other. The platform works with bitcoins only, as other coins can be used only to buy them out. You cannot work directly with Litecoins, Ripple or Ethereum. Check Ethereum Ethereum exchanges list, Litecoin exchanges list or Ripple exchanges list for those currencies.
There is no margin trading here, only direct purchase and sale of the coin. The volume is usually small on individual transactions, unlike in Coinbase or itBit, where you can get large blocks of the digital money.
Registration and Verification
Registering an account at LocalBitcoins automatically means you get a free wallet as well. All you have to do at the beginning is to provide your account username, email, and password. The wallet concerns bitcoins only, as that is the only crypto accepted at LocalBitcoins.
The verification level depends on individual trades as the company does not impose any rules on what needs to be verified and when. You can provide your email and phone number at the beginning, while scanned ID can be sent to individual sellers that require you to do so.
LocalBitcoins has a buy/sell widget that filters out orders that require ID from you, providing you with the list of orders where privacy is achieved.
Its services are available globally, as long as there are traders that wish to work with BTC in the country you reside in. The firm itself does not offer regulated services for the regions but rather traders make up the service availability themselves.
Deposit/Withdrawal Methods and Fees
At LocalBitcoins, you have an abundance of choices when it comes to deposit and withdrawal methods, even those that are rare, such as PayPal. The transaction fee stands at 1% while transfers themselves are not charged. You should take into account your provider’s cost structure in any case.
The direct competitor of LocalBitcoins, Paxful, offers a similar platform in many aspects, except it has over 300 deposit/withdrawal methods available.
In the safety aspect, LocalBitcoins does not excel when compared to larger exchanges, such as Coinbase, Bitfinex, and others. The platform offers email notification system, two-factor authentication (2FA) and escrow system. All of which might protect you from hacker to a certain degree but not from sellers that use scams to get bitcoins.
Thefts have been confirmed in the past and are still going on in LocalBitcoins if you are not careful.
Pros and Cons
+ potentially cheap way to get bitcoins
+ possibility to purchase coins without scanned ID
+ a large amount of payment/withdrawal options
+ low transaction fees of 1%
+ globally available
- high possibility to get scammed
- low volume trade in most cases
- no margin trading
- only bitcoins are accepted
We would recommend LocalBitcoins for beginners that wish to learn about the trade, blockchain and wallet services. The purchase level should not exceed $50, as it is a risky platform to work with. Experts would find nothing interesting here, as no margin trading is supported and only BC can be purchased/sold.