Post SummaryI made this post in such a way that even a 10-year-old can understand. Below is a list of what I will be covering today. You can click on any of the links to take you directly to the content.
- Company Overview
- Currencies and Payment Methods
- Supported countries
- Transaction Fees And Limits
- Trading Security
- Customer Support and Reviews.
- How to Trade safely on Local Bitcoin
- Frequently Asked Questions
LocalBitcoins OverviewLocalBitcoins is about the most popular Bitcoin exchange in the world. It was founded by Jeremias Kangas in 2012 and available in all countries of the world. In this platform, Bitcoin buyers and sellers come together to make exchange person to person using several payment methods while Local Bitcoins act as the ‘escrow’. As of August 2016, the company recorded 1.35million users on its platform and was generating up to $14 million weekly in revenue. Due to its constant traffic, by 2017 the site temporarily paused new user registration. The traffic also attracted a lot of bad eggs to the site, and so many customers’ funds were lost. The platform is legit and safe to trade on. however, to avoid being scammed, I have given a detailed guide on how to trade safely on Local Bitcoins later in this post.
What Is An Escrow?Escrow is a strategy employed by some Bitcoin exchanges like LocalBitcoins, Remitano, Paxful where sellers and buyers are linked to trade directly with each other to ensure fairness of trade. When a buyer indicates interest to buy bitcoin from a seller, the seller’s Bitcoin is held by LocalBitcoins in an escrow. When the buyer pays the required amount to the seller, LocalBitcoins releases the bitcoin to the buyer once the seller confirms the reception of the fund. In case of a dispute, the buyer will have to provide proof of payment to LocalBitcoins support, the seller also provides a statement of account. Then the issue is being resolved.
Supported Currencies And Payment MethodLocalBitcoins allows users to buy and sell bitcoin only. They can do this via any payment method which will be convenient for them and depending on the location too. For example
- Bank Transfer
- Money gram
- Direct Cash Deposit
- Wire Transfer
- Cash (If you are in close proximity with the person)
- Payza etc…
Supported CountriesAt the time LocalBitcoins was established, it provided support for all countries. Recently, due to some licensing issues, it was restricted in some places like; Germany, Russia, and New York City.
Transaction Fees And Limit
FeesA flat fee of 1% is charged on all trades. Takers don’t pay any fee; Makers pay the 1% fee – this statement is not totally true. Because Sellers charge higher rates in their listing to accommodates for this fee so it all falls back on the buyer. Also note that when you receive Bitcoin in your local bitcoins wallet, you will need to pay the standard Bitcoin transfer fee to move the bitcoin to an external wallet.
- Makers: These are the people that set the price either Buy or Sell
- Taker: These are the people that buy at the set ‘sell price’ or sell at the set’ buy price’
LimitsThere is a limit to the amount you can buy depending on your level of verification;
- Level 1: Name+ Country+ Email+Phone Number. Trade limit is 1000 Euros/year (#405,000).
- Level 2: Level 1+ Physical Address+ID+KYC info. Trade limit is 20,000 Euros/year (#8,100,000).
- Level 3: Level 2 + Proof of Residence. Trading limit is 200,000 Euros/year (#81,000,000).
- Level 4: Level 3 + Extra ID verification. No trade limits.
Trading SecurityThere are various measures taken to ensure the security of trading on LocalBitcoins, These are;
- Reputation System: Past trading activity and rating of each Trader is made public for individual assessment. This is to aid you decide if you want to trade with the trader or not.
- Escrow: This has been explained above.
- 2 Factor Authentication (2FA): The 2FA is an optional feature; It simply means that on each log into your account, you will have to enter a pin code that will be sent to your phone.
- Login Guard: Each time you log in from a different browser or IP, you will be required to verify it’s you by clicking on a link sent to your email address.
- Support and Conflict Resolution: LocalBitcoin has a support team 24/7 ready to answer questions and resolve conflicts if any.
Customer Support and ReviewsA lot has been said about LocalBitcoins and a lot is still being said. You can check out community opinions searching LocalBitcoins on Facebook, Reddit, Trustpilot, Cryptocompare, etc…I found out it needs to work on its customer care system, it takes a lot of time to get a reply from the customer care. Most opinions identify the site as being legit. Some users complained of lost funds from trading with the wrong person. Since you are dealing directly with an individual on the site, you have to take caution because people are not always trustworthy. Although LocalBitcoins have put measures in place to discourage scam, you can never be too careful because people still get scammed. I have taken time to highlight measures you should take so as not to get scammed on LocalBitcoins.
How to Trade Safely On LocalBitcoinsWatch the video below to learn how to trade on local bitcoins. This Guide ensures you are 99.99% safe when trading on LocalBitcoins
Step 1: Choose the Right SellerThe top listed price is usually the cheapest, it might be tempting but ‘NEVER CHOOSE A SELLER BASED ON PRICE’. Sellers and Buyers are filtered based on their IP. You are only shown Sellers and Buyers from your geo-region. When choosing a seller, follow these rules. They are strict but if you don’t want to lose your money, you should follow them: Make sure that:
- The user has traded over 10BTC in total on LocalBitcoins.
- He has at least 100 confirmed trades
- He has at least 10trade partners
- His feedback score is at least 98%
- His account is being active for at least 6 months
- He has a verified phone number, email and company account.
- He is trusted by at least 10 people.
Step 2: Communicate With the SellerIf the seller meets the above criteria, send a message to him requesting a trade, do not provide any other information about yourself until you receive a reply.
Step 3: Make PaymentOnce you receive a reply and feel comfortable to buy from the seller, make payment using the details provided by the seller on LocalBitcoins. After making the payment, Mark payment as ‘made’. (only do this when you have made the payment or else you might be denied transaction) Wait, your Bitcoin will be released to you by LocalBitcoins’ escrow once the seller confirms. If you have any issue, try to resolve it with the seller first before contacting the LocalBitcoins Customer Support.
- Make payment and mark it as paid within the allotted time.
- Never you trade outside LocalBitcoins with the seller even if he offers you a lower price. If you do so, you will not be protected by the LocalBitcoins escrow hence you might get scammed.
- Send your payment details to the seller using only the LocalBitcoins Payment interface. Do not send it to email or another medium.
- Once you have bought Bitcoin, always move your Bitcoin to your personal Bitcoin Wallet. Do not leave it in LocalBitcoins wallet.
Frequently Asked Questions
What is the meaning of the Green Dot Next To Usernames?There is a green, yellow or grey dot next to the user profile. This indicates how long it takes for a user to reply to trades.
- A green dot means the user Replies within 5mins
- A yellow dot means the user replies within 30 mins
- A grey dot means the user takes longer than 30 mins
Why Are Some Payment Methods Cheaper?Recall that bitcoin transactions are irreversible. Payment methods like Paypal are very strict, they can decide to take the money back from the seller’s account after he had sent the bitcoins to the buyer. This is why sellers attach a high fee when using this type of method to cover the for the risk taken.
Conclusion (My Take on LocalBitcoins)LocalBitcoins is a legit platform to buy or sell bitcoins. Its Reputation has made it survive over the years. However, LocalBitcoin only connects buyers and sellers to trade bitcoins and modulate the process. They do not sell or buy from a user directly, so the integrity of the system depends on the person you are dealing with. Join millions of traders to start trading on local bitcoin today, catch the vibe and get the feeling. Have you ever visited this platform? Or do you have experience using Local Bitcoins? Well, this is my own review, drop your comments below or any questions you might have regarding this post or other related matters. I will be right there in the comments. If you enjoyed reading this, kindly help us to share by hitting on any of the social media icons below. we’d be making more content like this one.