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Review of LocalBitcoins
Founded in 2012 from its headquarters in Finland, LocalBitcoins is a digital marketplace for buying and selling Bitcoin worldwide. It’s a platform that works as an open peer to peer (P2P) Bitcoin exchange secured by an escrow service. LocalBitcoins’ services are available in over 1600 cities spread across more than 200 countries worldwide with 1 million registered users so far.
Pros & Cons
What can I do on LocalBitcoins?
LocalBitcoins allows you to search for, and transact with individual buyers and sellers of bitcoin. The platform allows you to sell bitcoins that you have stored on its online wallet. If you are a vendor who has organised a trade with another buyer, LocalBitcoins will hold the bitcoins stored in your LocalBitcoins wallet in escrow, and upon your confirmation of payment from the buyer, release the bitcoin to the buyer’s wallet. This is how the platform confirms the authenticity of each transaction.
What cryptocurrencies are supported?
LocalBitcoins currently only supports the buying and selling of Bitcoin.
LocalBitcoins Payment methods
You are free to use any payment method on LocalBitcoins to transfer funds into a vendor’s account if you are buying Bitcoins, so long as the vendor approves of it, and it is available in your location. We have organised the most common type of payment methods for you:
A cash deposit involves going to an ATM to deposit cash directly to a bank account. This is the safest and most effective type of payment transfer, as it is completely irreversible.
Users can buy Bitcoin through transferring funds via bank transfer or wire transfer into the vendor’s bank account. A bank transfer or a wire transfer is usually a safe option of transferring funds, as the risk of reversibility is low. The risk increases more in the context of international bank transfers.
This involves transferring money from your credit or debit card to the seller’s bank account. Card transfers are classified as a high-risk transfer on the LocalBitcoins website, due to the reversibility of payments made with such cards, so it is unlikely that vendors will accept this payment method.
Payments with electronic wallets such as Paypal, Skrill, Neteller, or similar electronic wallets operate in the same way as regular debit/credit card payments, in that you transfer funds into the vendor’s bank account.
They also carry the same amount of risk for the vendor, as payments can be reversed up to three months after a payment, which means that vendors are also unlikely to accept this payment method.
Users can buy Bitcoin through the exchange of altcoins such as Dash, Ripple/XRP, Litecoin, Monero, and Ethereum. These coins will have to be sent to the wallet address of the vendor. This is a common method of payment on the platform as there is no chance of payments being reversed.
These are only the most popular methods of payment on LocalBitcoins. As the platform serves simply to mediate between buyers and sellers, you can pay using any means the seller accepts (or accept any payments you wish if you are selling bitcoin).
What devices can I use LocalBitcoins on?
You can use LocalBitcoins through any device that can access their website through an internet browser. There is no mobile app at present.
How easy is it to use LocalBitcoins?
LocalBitcoins is incredibly easy to use, and takes only a minute to register for an account. The landing page immediately shows you available offers from both buyers and sellers around your area. You can click on a vendor’s profile to look at their customer feedback, reputation score, and buy from them if you wish. Sellers of bitcoin on the website may request buyers to post additional information before they agree to transact with them.
If you wish to post your own advertisement for a trade, you can do so by clicking on the ‘Post a trade’ button at the header section of the website. LocalBitcoins will charge an additional 1% fee for every successful trade that comes about from the advertisement.
LocalBitcoins is supported worldwide in over 248 countries. However, due to regulatory laws, they are unable to operate in the states of New York and Washington, as well as Germany. Here is a list of the countries supported:
- Aland Islands
- American Samoa
- Antigua and Barbuda
- Bonaire, Sint Eustatius and Saba
- Bosnia and Herezgovina
- Bouvet Island
- British Indian Ocean Territory
- Brunei Darussalam
- Burkina Faso
- Cabo Verde
- Cayman Islands
- Central African Republic
- Christmas Island
- Cocos Islands
- Congo, The Democratic Republic of the
- Cook Islands
- Costa Rica
- Côte d’Ivoire
- Dominican Republic
- El Salvador
- Equitorial Guinea
- Falkland Islands
- Faroe Islands
- French Guiana
- French Polynesia
- French Southern Territories
- Heard Island and McDonadl Islands
- Holy See (Vatican City State)
- Hong Kong
- Iran, Islamic Republic of
- Isle of Man
- Korea, Democratic People’s Republic of
- Korea, Republic of
- Lao People’s Democratic Republic
- Macedonia, Republic of
- Marshall Islands
- Micronesia, Federated State of
- New Caledonia
- New Zealand
- Norfolk Island
- Northern Mariana Islands
- Palestine, State of
- Papa New Guinea
- Puerto Rico
- Russian Federation
- Saint Barthélemy
- Saint Helena, Ascension and Tristan da Cunha
- Saint Kitts and Nevis
- Saint Lucia
- Saint Martin
- Saint Pierre and Miquelon
- Saint Vincent and the Grenadines
- San Marino
- Sao Tome and Principe
- Saudi Arabia
- Sierra Leone
- Sint Marten
- Solomon Islands
- South Africa
- South Georgia and the South Sandwich Islands
- South Sudan
- Sri Lanka
- Svalbard and Jan Mayen
- Syrian Arab Republic
- Trinidad and Tobago
- Turks and Caicos Islands
- United Arab Emirates
- United Kingdom
- United States
- United States Minor Outlying Islands
- Virgin Islands, British
- Virgin Islands, U.S.
- Western Sahara
LocalBitcoins account verification
LocalBitcoins аccount verification is optional. However, unverified accounts (both on the seller’s and buyer’s side) are mostly avoided. To get your account verified, all you have to do is upload a government issued ID document, passport photo or valid driving license.
LocalBitcoins customer support
Users can reach LocalBitcoins’ customer support through social media (Facebook, Twitter, Instagram, and Reddit) or by creating a ticket request. Alternatively, users may discover that their queries can be answered on the FAQ section of the website, or ask other online forum users for help.
LocalBitcoins’ peer to peer exchange is straightforward and easy-to-use. The landing page allows for users to immediately see the most competitive offers from users looking to buy or sell bitcoin near their area. Users can also view the profiles of specific traders to look at their reputation score, as well as feedback from previous customers. It’s also incredibly easy for users to set up their own trades/advertisements for the buying and selling of bitcoin. This can be done by clicking on the ‘Post a trade’ button located at the top of the page. However, users must provide verification of identity before they are allowed to post advertisements. Furthermore, an additional 1% fee will be charged by LocalBitcoins for every successful transaction that comes about from the advertisement.
Is LocalBitcoins a secure exchange?
Yes. LocalBitcoins is a safe exchange. However, it’s important to take caution with the individuals you are trading with on the platform as there is always the possibility of scams. This is usually a risk for sellers, as a buyer’s payments might be reversible. This is why it is recommended for sellers to accept low or no risk offers, such as domestic bank transfers and cash deposits.
This is not something LocalBitcoins can control, as it is up to the seller to take special care in ensuring they are trading with reputable users and accepting payment methods that are secure. Additionally, LocalBitcoins employs a range of security features that aim to provide the best user security possible:
- Escrow. LocalBitcoins’ escrow service works at the disposal of the buyer and seller, by holding the seller’s funds in escrow until payment is verified and subsequently releasing it to the buyer when the payment is complete.
- Reputation ranking. LocalBitcoins provides a reputation ranking system that shows the historic activity of an account so as to help users differentiate between a reliable user and a potential scammer. It is recommended to always go with highly ranked users, who have a good feedback history.
- Conflict resolution support. LocalBitcoins comes with a conflict resolution support team that is always ready to help users resolve disputes. At times, they may refund payments to users who have been scammed.
- Login guard. The login guard verification feature requires email verification every time you log into your account from a new browser. This prevents unauthorized access to your account.
Are there trading fees on LocalBitcoins?
Yes and no. There is a standard 1% trading commission fee charged by LocalBitcoins for all transactions that are completed by a user who has posted an advertisement, regardless of whether they were offering to buy or sell. For users who are simply trading with people who have posted advertisements, there are no trading fees.
What are the withdrawal and deposit limits?
There are no set limits for transacting on LocalBitcoins’ exchange platform. Users can deposit or withdraw any amount of bitcoin into or out of their own LocalBitcoins wallet. However, vendors will set their own limits for transactions.
Summary of LocalBitcoins’ exchange
LocalBitcoins’ exchange is a solid choice for anyone who is looking for a decentralized option of buying and selling Bitcoin. However, there is the possibility of scams, which only applies to sellers, as various payment methods can be reversible. Users can circumvent this by only accepting lower or no risk options such as bank transfers or cash deposits. The exchange platform allows users to look at each other’s reputation score and previous feedback if any. Most users will only accept trade offers from other verified users.
LocalBitcoins’ wallets are online wallets that are simply meant to supplement the P2P exchange platform and process. Before a vendor enters into a trade, they must have the amount of Bitcoin they want to sell stored on their wallet. When a trade is in progress, LocalBitcoins hold the requisite amount of the vendor’s Bitcoin in escrow until the seller guarantees successful payment, at which point the held Bitcoin is moved into the buyer’s wallet. The wallet also comes with an additional layer of security, which is explained below.
What are the security features?
LocalBitcoins’ wallets feature Two Factor Authentication (2FA) security, which can be set up to add an additional layer of security onto wallet access beyond simply entering your username and password. There is also the Login Guard feature, which is designed to verify any login activity to your account from a new browser through email. As an online wallet, it is still less secure than a hardware wallet, which is why it is recommended that users only store funds on the LocalBitcoins wallet that they intend to transact with.
Are there fees?
Nope, there are no direct fees related to buying, selling, or storing Bitcoins on LocalBitcoins. However, there is a standard network transaction fee of around 0.0002 BTC (under £2), which will be the cost of sending Bitcoins from your LocalBitcoins wallet to external wallets. Additionally, the exchange charges a 1% fee per transaction to users who complete transactions through their own submitted advertisements.
What are the deposit and withdrawal limits?
Currently, there are no deposit or withdrawal limits on LocalBitcoins’ wallets.
Summary of wallet
LocalBitcoins’ wallets perform as expected for anyone looking to store funds for the purpose of trading on the LocalBitcoins marketplace. Therefore, vendors should only aim to store an amount of Bitcoin that they intend to transact with. Buyers will receive the Bitcoins that they have bought on the online wallet, and it’s suggested that they move the funds into a more secure location, such as a hardware wallet, unless they plan to sell the bitcoins back to other users through LocalBitcoins.
Extra LocalBitcoins Features
These are now currently not available for order, but could be re-released to the public in the future. Previously, LocalBitcoins offered users the opportunity to buy their own ATM machine, which would help automate the Bitcoin exchange process without access to the internet. The previous model of ATM (the ATM A3) came in a simple and secure cash box design, with a 30 note recycler capacity. It could handle a volume of up to 300 BTC, with a 5 to 8 percent trading margin going back to the owner of the ATM.
LocalBitcoins is a reliable, decentralised peer-to-peer exchange and wallet platform for anyone looking to buy or sell Bitcoins quickly, with transactions guaranteed through the use of an escrow service. However, there is a slight safety risk of payments being reversible. Users can circumvent this issue by only accepting payment options, such as a cash deposit (via ATMs) or domestic bank transfer, which removes the risk of transfers being reversed by a buyer after the transfer is completed. Additionally, the platform provides support options such as the ability to look at the reputation and feedback history of users.
Ultimately, LocalBitcoins presents itself as a unique platform that might make it more profitable for users to buy and sell Bitcoin in comparison to other exchange or brokerage platforms, which charge higher fees and commission rates.
How to open an account with LocalBitcoins
Decided to register for a LocalBitcoins account? Great, here’s how it’s done:
- Start by signing up for LocalBitcoins account with an email, and password. (Make sure your password is strong enough, using capital and lowercase letters as well as numbers).
- Then, you will be prompted to confirm your registration through an activation link sent to your email. Click on this link and you be redirected to your account.
- At this point, you can go ahead and enable Two Factor Authentication (2FA), through the Google Authenticator app (available on Android and iOS platforms). This will help provide additional security to your LocalBitcoins account.
- Because most users are hesitant to trade with unverified users, it is now recommended that you verify your account. This can be done by providing a document that shows proof of identity (POI). This document can be a clear copy of your government-issued ID, valid driving license, or passport photo. This process could take a couple days, but once you are verified, you can start to buy and sell bitcoin!