LOCALBITCOINS vs COINBASE

COINBASE VS. LOCALBITCOINS

One of the biggest concerns of the members of the crypto community that possess holdings of any digital currency is security. Due to the multiple security breaches experienced by crypto heavyweights such as Bitcoin and Ethereum alike, both of which resulted in community-dividing hard forks, people are concerned about how secure their holdings are.

With platforms such as Coinbase, users are given unparalleled ease of access to buying, sending, and holding Bitcoin, Ethereum, and Litecoin.  With features such as low fees, an included wallet, and an easy to use interface, Coinbase has become a popular choice to newcomers.

Although it is very user-friendly, it comes with drawbacks due to it being a centralized third party. This characteristic makes Coinbase more prone to security breaches and hacks, as there are frequent reports of users losing access to accounts and holdings they own inside the Coinbase Platform.

LocalBitcoins, on the other hand, is more inline with the decentralized manifesto that the crypto community at large adheres to. The platform is secure and private because it facilitates P2P deals and does not have a centralized store of information related to wallets or holdings. Instead, users can set up in-person deals where the seller sets the premium of the deal (which averages out to be about 6-15%).

This allows for instantaneous transactions, whereas coinbase crypto purchases can come with a delay. While this process is a favorite for die-hards, others criticize it as being too naive. The experience you have with a deal directly relates to the person you are dealing with, and the premiums have proven for some to be too much of a nuisance.

PRIVACY & SECURITY AT LOCALBITCOINS AND COINBASE

Privacy and security are the main motivators that drive the debate between using different cryptocurrency exchange platforms. Loyalists stick to their decentralized ideals, suggesting there should be no such centralized entity such as Coinbase in charge of so much sensitive information and personal assets. This feeling is not without evidence, as Coinbase has been subject to multiple hacks, reports of lost accounts, and reports of lost crypto holdings.

LocalBitcoins has been called out for its issues as well, with people stating that the premiums are consistently too high and not worth the hassle that comes with dealing with the P2P deals it hosts. In addition, some individuals have reported that there are no reasonably priced premiums in their area, making it unuseable. When choosing between these two platforms, users must choose between a better end user experience with Coinbase, or a more secure and possibly annoying process with LocalBitcoins.

COINBASE

Coinbase is one of the leading digital asset exchanges based in San Francisco, California. The exchange was founded by Brian Armstrong and Fred Ehrsam in 2012. Their focus is on the US market, but the company currently operates in 31 countries and offers Bitcoin storage in 190 countries across the world.

Review Contents

• Verification
• Coinbase Fees
• Trading at Coinbase
• Ease of Use
• Customer Support
• User Experience
• Exchange Security
• Supported Payment Methods
• Supported Countries
• Conclusion

In 2014, the company created a Global Digital Asset Exchange (GDAX) – a platform for trading a wide variety of digital assets and a direct exchange of Bitcoin and Ether for fiat currency. GDAX is primarily meant for professionals with high volumes.

Verification

There are four verification levels on Coinbase, and first three levels take only a couple of minutes. The fourth level can take a bit longer, usually a few days. Completion of each level increases user’s weekly buy/sell limits. Here’s a short overview of the Coinbase verification levels:

Level 1 – verification of email address and phone number.

Level 2 – completion of personal details such as full name, date of birth and address of residence.

Level 3 – input of bank account details as well as credit and debit card details.

Level 4 – identity verification which involves:

• Government-issued identification document
• Taxpayer identification number
• Identity verification by answering a few questions
• The limits offered by Coinbase are higher than average. Depending on the verification level of account, the limit increases. Level 1 accounts can buy up to $5,000 worth of BTC and sell up to $25,000 per day. Fully verified US account has a trading daily limit of $50,000, while European account has a 30,000 EUR daily limit.
  

The exchange supports the following fiat currencies:

• EUR
• GBP
• USD
• CAD
• SGD
• AUD

Coinbase supports only two major cryptocurrencies at the moment – Bitcoin and Ethereum.

Coinbase Fees

Coinbase doesn’t have separate deposit and withdrawal fees, and the exchange charges percentage fees instead of fixed amounts. Bank transfers in the US carry a fee of 1.49 percent, and the funds are available in 5 to 7 days. US customers can add a credit card as a backup payment method, which will enable Coinbase instant BTC buy for up to $1,000 per week.

Credit or Debit Card payments in US, Europe, Canada and the UK cost 3.99 percent of the sum transferred, and the money is available right away.

European SEPA transfer fee is 1.49 percent, and the money is available within three days of the transfer. Xfers transfers in Singapore carry a fee of 1.49 percent as well, but the money is available immediately.

Cryptocurrency deposits and withdrawals are free of charge.

When it comes to trading, Coinbase charges 1 percent flat fee per every purchase made.

Trading at Coinbase

Coinbase is a convenient and secure place to trade Bitcoins and Ethereum. The exchange has a good liquidity in both cryptocurrencies, and the trades are very fast.

They have order slip, candle charts, and variable time frames.

Coinbase doesn’t support margin trading, short selling or futures and derivates trading

Ease of Use

The Coinbase interface is very intuitive and easy to use. The trading is always at a click or two away, with excellent website speed.

The company offers fantastic mobile products for iOS and Android, with probably the best Bitcoin exchange apps on the market today. The apps provide full functionality of the website-based exchange and require two-factor authentication combined with email verification. It allows pin locking and a unique feature which lets users disable the app at a distance in case the device is lost or stolen.

Coinbase API is also top of the line, allowing access to the exchange functionalities through a third-party app, product or service. Many merchants and traders use this API on their websites to enable Bitcoin payments.

Support Findings about Coinbase

Coinbase support is very professional, with guaranteed 24 hour email response time, which is much quicker during the work week. They also offer instant chat support which operates according to US business hours.

One of the problems we encountered with the Coinbase support is the “canned response” issue, where the support team doesn’t try hard to resolve the problem but has a series of replies sent by default, neglecting to explain the issue or to help solve it efficiently.

They also have a community, where users can post questions and get answers from other users. Their FAQ section offers little information, so it’s best to avoid it.

User Experience

There’s a lot of controversy surrounding Coinbase in the Bitcoin community. Numerous complaints online include the following issues:

Tracking how users spend their cryptocurrencies

Coinbase tracks how their users spend Bitcoins. They are also inclined to close or freeze accounts of the customers that used BTC to pay for gambling, adult services, darknet stuff or any other shady business.

Affiliate reward abuse

Coinbase officially offers an excellent referral program which attracted many affiliate merchants, but there are numerous cases where the partners haven’t been paid accordingly.

Participating in cryptocurrency debates

Coinbase has a history of taking sides in many internal Bitcoin discussions. This is okay for individuals, but the exchange of this type and size should remain neutral and simply follow the market movements instead of trying to dictate them.

Security

Coinbase offers the most robust security in the entire Bitcoin exchange market. Over 97 percent of coins are kept in cold storage. The private keys used for authorization of cold storage transactions are held in fragments between offline hard drives and paper, in different locations with backups in case of losing any pieces.

They offer two-factor authentication for logins and withdrawals and allow customization for maximum transaction limit. Passwords are hashed and encrypted.

They offer email notifications and use PGP email encryption.

The exchange hasn’t been hacked in the past.

Supported Payment Methods

• SEPA
• Wire Transfer
• Debit Card
• Credit Card
• iDeal
• SOFORT
• Paypal

Supported Countries

Angola, Benin, Botswana, Cameroon, Ghana, Kenya, Mauritius, Namibia, Rwanda, South Africa, Tunisia, Uganda, Zambia, Armenia, Bahrain, Brunei, Hong Kong, India, Indonesia, Jordan, Kazakhstan, Korea, Kuwait, Kyrgyzstan, Macao, Maldives, Mongolia, Nepal, Oman, Philippines, Singapore, Taiwan, Uzbekistan, Andorra, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man,Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, Aruba, Bahamas, Barbados, Bermuda, Canada, Cayman Islands, Costa Rica, Curaçao, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Trinidad and Tobago, USA, Virgin Islands, Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Africa, Europe, Asia, North America, South America

Coinbase Review Conclusion

Coinbase is one of the largest Bitcoin exchanges and the largest Bitcoin storing company in the world. It holds over 600,000 customer wallets, and it’s integrated into the US banking system.

Pros

• High liquidity
• Integrated debit and credit cards
• Newbie friendly

Cons

• Major violations of users privacy
• High Trading Fees for < $50k Trading / Month
• Puts investors before customers

Coinbase may be the largest Bitcoin broker service in the world, but advanced traders may want to look for a more reliable option.

One of the most widely used exchange/wallet services available, Coinbase provides its users with an easy-to-use platform that allows them to buy Bitcoins. In addition, users can also send and receive money from the included wallet service, check the going rates for each digital currency, and instantly send and pay for services/products with any of the available currencies.

The biggest concern with Coinbase, as mentioned, is its security. There are consistent reports of people simply losing access to their accounts and crypto holdings, with no hope for a solution. Since Coinbase is a singular, centralized entity, your holdings are held within a single ledger, rather than an open ledger that is present across an entire blockchain. This clashes with many people’s beliefs in the blockchain and crypto, and its mission for society. In addition to this, many users that reside outside the US have reported that the platform is not friendly to them, with the rate of locked accounts and stolen funds increasing almost three times in countries such as Australia.

LOCALBITCOINS

Localbitcoins is the largest peer-to-peer service which helps to match Bitcoin buyers and sellers who live close to each other, enabling face-to-face and online transactions. The platform also provides an escrow service which is used to ensure fairness of every transaction made by the users.

The company is one of the oldest exchanges in the industry, founded in 2012 by Jeremiah Kangas, a programmer, and entrepreneur. Currently, it operates in 248 countries and 13774 cities, with a base in Helsinki, Finland.

Review Contents

• Verification
• Fees
• LocalBitcoins Trading Analysis
• Ease of Use
• Customer Support
• User Experience
• Exchange Security
• Supported Payment Methods
• Supported Countries
• Conclusion

Verification

LocalBitcoins respects the anonymous nature of Bitcoin, so it doesn’t have a mandatory I.D. verification, and it doesn’t require any personal details.

Email address is the only thing needed for signup. While the exchange doesn’t require any personal information, some sellers or buyers may request identification in order to proceed with the trade.

When it comes to fiat currencies, users are free to trade in any currency, which means that if there’s someone willing to accept your local fiat currency, you can buy Bitcoins for it.

The exchange allows only trading with fiat currency for Bitcoin. No altcoins are supported.

Fees on LocalBitcoins

LocalBitcoins leaves everything to the users and tends to keep things simple. It’s the same with the fees. Simple 1 percent fee is applied to all trades. The seller pays the fee.

Of course, standard Bitcoin network fees apply for all transactions. The sellers are free to form their own BTC price, so usually they cover a transaction fee by asking for higher exchange rates.

LocalBitcoins Trading Analysis

The exchange doesn’t have a typical brokerage business model, instead – it’s a peer-to-peer network which connects the sellers with buyers in the local area. The traders post advertisements on the platform, stating exchange rates and accepted payment methods for selling or buying Bitcoins. Other users reply to these ads and arrange to meet the trader in order to make a transaction, in person or online.

LocalBitcoins also has a reputation system and feedback mechanism to help the members distinguish the legit traders from the scammers. The trading platform also offers an escrow service in order to help establish trust between the parties, and a conflict-resolution service which helps users overcome any misunderstandings.

Users are advised to be cautious when trading on LocalBitcoins because it’s possible to get scammed. After all, the deal is made between individuals. Here are a couple of things to keep an eye on when it comes to trading.

The seller should meet these qualifications:

• Has a feedback score of 98 percent or higher
• Has traded over 100BTC in trading history
• Has successfully completed at least 100 trades
• Has an account older than a year
• Is verified seller
• Is trusted by 10 or more people

Do not post ads for buying Bitcoins, because this type of ads usually attracts scammers. Do not choose your seller based solely on the price.

When it comes to communication, do not:

• Agree to trade outside the exchange
• Send more information before getting a response from the seller
• Send payment information outside the exchange (no emails, phone calls, etc.)

Also, major traders may refuse to sell cryptocurrency to the new users without any feedback. In that case, a new user should make a few minor trades with less-reputable sellers in order to get a positive feedback and be accepted into the “big league.”

The exchange doesn’t support derivates or futures trading. Also, it doesn’t have margin trading, short selling or any other option, because it isn’t the traditional trading platform.

Ease of Use

LocalBitcoins.com provides well-outlined information, and the entire website is easy to use and spot-on. All the information needed is available in an instant and without any need to navigate to find it.

Sign up takes only 20 seconds, and the website is very fast. Nothing but praises for the design.

Support

Support team on LocalBitcoins is well organized and competent. Their FAQ section is quite thorough, and they offer special forms to report phishing, lost two-factor authentication or password.

They only offer support via email, but overall service is excellent. The support team typically answers within 1 hour.

User Experience

Many users get scammed on LocalBitcoins, primarily due to peer-to-peer interaction. There are many scam reports all over the web, which damaged the reputation of LocalBitcoins. The exchange is still a great place to buy or sell Bitcoins, but it’s user’s responsibility to stay safe and educate itself about the potential dangers of peer-to-peer trading.

The trading platform also offers a place for fraud and scam warnings, where users can post about their experiences with other traders.

LocalBitcoins Security

The exchange has a strong security with two-factor authentication, HTTPS encryption, and Login Guard. LocalBitcoins also has a great white hat program for the security researchers, which help the exchange to stand out from the competition.

The trading platform has been hacked in 2015. They have SMS and email alerts and the coins placed in Escrow are kept online on the site. The PGP encryption is used for email communication.

Supported Payment Methods

• Credit Card
• Debit Card
• Wire Transfer
• SEPA
• Perfect Money
• Cash Deposit
• Tele2
• Swish
• Qiwi
• Payza
• Skrill
• Neteller
• Payoneer
• Alipay
• Paypal
• OKPay

Supported Countries

All countries except: Germany, Iran, States of New York and Washington in the USA

LocalBitcoins Review Conclusion

The LocalBitcoins are the great way to buy Bitcoins if you’re looking to protect your privacy and trade locally. Otherwise, it may be too much of a hassle.

Pros

• Private and fast
• Easy to Use

Cons

• Need to keep an eye for scams
• Now a ID verification is required
• Not suitable for large buyers

LocalBitcoins is a popular recommendation for crypto enthusiasts due to its private, secure nature, along with its decentralized, community-focused mentality that allows for P2P deals and user-set premiums. Once a deal is completed between the buyer and seller, there is no delay in receiving your Bitcoin. Given that you’re dealing with locals with local bank accounts, the entire process can take place very quickly.

While LocalBitcoins is not the well-rounded platform that Coinbase is, not including a wallet or availability of any other currency except Bitcoin, it still keeps its die-hard fans due to its respectable mission. Keeping local communities of Bitcoin trading alive is a noble cause, and it protects its users from hacks and security breaches. LocalBitcoins has yet to experience the problems Coinbase has faced such as account lockouts or lost funds.

The main complaint for LocalBitcoins is the trustworthiness of the people you are dealing with. Since users set premiums, it is out of your control if there is anyone in your area with a premium rate below 30%, which some Reddit users have reported. Each person’s LocalBitcoins experience can differ, and this is why its reputation and value is so hotly debated.

WHICH EXCHANGE SHOULD YOU CHOOSE?

While both platforms offer their unique benefits, which one you choose depends on your goals, location, and opinions about the crypto community and safe practices. For those who are relatively new to crypto trading that are located in the US, Coinbase (in combination with a hardware wallet) is the easiest way to obtain Bitcoin, Ethereum, or Litecoin.

There are those who prefer the P2P, secure nature of LocalBitcoins, despite the uncertainty of rates in your area. At the end of the day, choosing between these two platforms comes down to convenience, the same way you would justify buying a product from your local 711 instead of driving to WalMart.

With that being said, always practice security when buying and selling digital assets. It is our recommendation to use a hardware wallet, such as Ledger  to safely and securely store your private keys. This removes any possibility that your holdings could be hacked or accessed by a third party, and ensures peace of mind.

Whichever platform you choose to work with in the end, participating in the cryptocurrency community only adds to its capability of reaching mainstream adoption, so get involved today!

You can also share your experiences!!!!!