Localbitcoins Vs Paxful
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
Overall great exchange, but might not be the best choice for beginners.
Do you have good or bad experiences with this Bitcoin Exchange? Please share them!
Paxful Review
Paxful is an online marketplace which allows buyers and sellers to meet online and trade Bitcoins. Similar to LocalBitcoins, Paxful allows a wide range of payment methods and buying options which can’t be found on traditional exchanges.
In this post I’ll review the company and its services. I will also compare the service to LocalBitcoins, its popular competitor.
Paxful Review Summary
Paxful brings users the ability to buy Bitcoins with almost any conceivable payment method. The user experience is extremely intuitive.
While everything seems pretty neat there are still some things you’ll need to look out for like how to avoid scams and get a decent exchange rate (see details on both below).
If you want a more detailed review of Paxful keep on reading, here’s what I’ll cover:
Company Overview
Paxful Services
Currencies and Payment Methods
Paxful Fees
Buying Limits
Supported Countries
Customer Support and User Reviews
Paxful vs. LocalBitcoins
1. Company Overview
Founded in 2015 with offices in multiple cities around the world (HQ is in the US) and over 200 employees, Paxful aims to be the “Uber” of the Bitcoin community. Paxful enables individuals to become merchants and sell Bitcoin online, similar to how eBay allows people to sell merchandise.
Paxful also offers a great alternative for buyers, since sometimes traditional exchanges just don’t cut it.
While most exchanges suffer from geographic restrictions or limited payment methods, Paxful is free of both, giving the power for trading Bitcoins back to the people and allowing for a more decentralized trading market.
Paxful also offers a payment processing service for websites, which enables merchants to more easily accept a wide variety of payment methods.
2. Paxful Services
Paxful offers their marketplace service in two forms:
On their website via an easy to use form
Via a “virtual kiosk link” that any person or website owner can use.
The virtual kiosk is basically Paxful’s affiliate program, allowing people to spread the word about Paxful while generating a 2% revenue from any amount bought.
Paxful also offers “Pay with Paxful”, a payment processing feature which can be added to websites. This allows merchants to accept any one of Paxful’s 300+ payment options via a Paxful widget on their website.
Escrow
Paxful also provides an escrow service for all Bitcoin transactions. Once a buyer finds a seller and the offer is accepted by the seller, the Bitcoin are automatically moved from the vendor’s wallet to escrow.At this point, the seller can’t cancel the trade. However, the buyer has a limited time frame to deliver the money to the seller and mark the payment as ‘complete. If the buyer fails to do that in the given time frame, the deal will be auto-cancelled and the Bitcoin will be returned to the seller’s wallet.
When both the buyer and the seller have verified that the transaction has been confirmed and all the terms have been met, the money will be released to the buyer’s wallet and the deal will be concluded.
If at any point there will be a disagreement between the two parties, the process will move along to dispute.
Paxful moderators will then investigate all the info, consider all the available details and finally make a decision to whom the bitcoins will be awarded.
Having said that, in most cases transactions go through smoothly thanks to Paxful’s intense moderation that clamps down on potential scammers.
3. Currencies and Payment Methods
Paxful deals with the buying and selling of Bitcoin only. Since the money is sent directly to the sellers, the site itself doesn’t hold fiat currencies for users.
Sellers on Paxful accept over 300 payment methods, with the most popular ones being credit cards, PayPal, Amazon gift cards, wire transfers and Western Union.
Keep in mind that different payment methods will result in different exchange rates. For example, non refundable payment methods (bank transfers, cash) will usually have lower exchange rates while payment methods that allow for chargebacks (i.e. credit cards, PayPal) will cost more.
4. Paxful Fees
If you’re buying Bitcoins on Paxful, you won’t have to pay any fee to the site itself. Different sellers, however, may charge fees or a premium, depending on your payment method as I’ve stated before.
Sellers on Paxful pay a 1% fee to the company.
Additionally, there are normal Bitcoin network fees which are paid by the sender, in order to transfer money through the network. These fees do not go to Paxful but to Bitcoin miners.
5. Buying Limits
Paxful has 4 verification levels, each one with different limits:
Level 1 – Email and phone verification Limit is $1,000.
Level 2 – Level 1 requirements + ID verification. Limit is $10,000.
Level 3 – Level 2 requirements + address verification. Limit is $50,000.
Level 4 – Level 3 requirements + enhanced due diligence. No limit for this level.
Users from the US are required to complete levels 1, 2 and 3 to trade on Paxful at all, while users from the EU and Canada must complete at least levels 1 and 2, as well as 3 if they wish to withdraw any funds.
6. Supported countries
Paxful is available worldwide except for the following countries:Burundi, Central African Republic Sanctions, Cuba, Crimea region, Iran, Iraq, Lebanon, Libya, North Korea, Republic of Congo, Somalia, South Sudan-related Sanctions, Sudan and Darfur, Syria, Yemen
7. Customer Support and User Reviews
Paxful has a relatively extensive FAQ, although I found it to be somewhat outdated. Some pages were just missing when I clicked their link and there was even a high Bitcoin mining fee warning that wasn’t updated since March 2017.On the other hand, there’s a very easy to use chat box for all relevant support requests. Support representatives either answer immediately or reply later via email.
Most negative reviews about Paxful on Trustpilot are to do with unverfied users from the US and the EU having their funds “stuck” on Paxful, due to not knowing they had to provide full identification to withdraw.
Other negative reviews are about specific sellers which have scammed buyers and not about the platform itself. Avoiding scam on Paxful is indeed an issue that needs to be taken into account (more on that later in this post).
Both of the above problems can often be avoided with a little caution and common sense.
Aside from those two common issues, the Paxful experience appears to be very smooth and enjoyable for most users.
8. Paxful vs. LocalBitcoins
Paxful’s main competitor is undoubtedly LocalBitcoins, a similar marketplace that has been around since 2012.Paxful appears to have caught up to LocalBitcoins in global trading volume over the last year, despite LocalBitcoins previously having a much larger market share. While LocalBitcoins has been around longer, Paxful seems to be crushing it when it comes to customer satisfaction.
Have you used the above exchanges I\"d like to see your experiences
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