Learn from this LocalBitcoins review about how to buy bitcoins.
LocalBitcoins have been present for such a long time. The website is a place not only to meet but also to trade Bitcoins, for both buyers and sellers around the world.
It is comparable to Craigslist with regards to trading Bitcoin. In this article, you will learn the different Bitcoin aspects and will also give you guidance on the ways of choosing a safe trade in the website.
LocalBitcoins sellers or buyers use different modes of payment. The main ones are listed here:
Cash by mail
Cash on Delivery (COD)
A credit card can’t be used since you are selling and buying to individuals. The Paypal option, however, permits you to pay using your credit card for situations where you do not have a balance in Paypal.
You are required to pay different fees, depending upon the mode of payment you choose. A certain example is when you use Paypal to buy LocalBitcoins which provides the seller a much more risk.
It is for the reason that Bitcoin is not like the usual digital or physical goods you purchase online. It is somewhat a one form of money and is somehow an untraceable one. That is the reason why a lot of credit card companies (ex. Paypal) do not guarantee Bitcoin exchanges selling Bitcoin through credit card purchases.
The usual way for having the best price to buy Bitcoin is using Cash Deposit or Wire Transfers in which it is difficult to do a reverse payment method.
If you are only aiming to purchase Bitcoins, the LocalBitcoins can be used freely. Only a one percent commission is taken by the website from the sellers. But take note that the moment you have the Bitcoins in your account, you’ll be required to pay the basic Bitcoin network fees for you to be able to put your money inside your own Bitcoin wallet.
It is very well recommended to not let your Bitcoins stay around inside the LocalBitcoin’s wallet and move it immediately to your own personal Bitcoin wallet.
The sellers as well have a free transaction fee, but they are being charged instead with higher exchange rates, so you have to remember it upon doing a trade.
Several measures are used to have a secured trading in LocalBitcoins:
Reputation system – Each and every trader has a reputation rank as well as a public history records displaying their activities in the past.
Escrow – Upon a trade, the money you sent is detained on the escrow service of LocalBitcoins. They are released only upon the seller’s confirmation of a completed trade.
2FA – Two factor authentication prevents anyone from hacking your account by requiring an additional PIN CODE that was sent to your cellphone whenever you log in into your account. This option should be enabled personally since it is not readily enabled.
Login guard – It is used to verify that you are just using the same browser upon logging in. If a different browser is used, email verification is needed.
Conflict and support resolution – For instances when a user has questions and conflicts, LocalBitcoins provides a support team just to answer and resolve it respectively in case it happens between sellers and buyers.
Upon going to the main community board of Bitcoin such as Bitcointalk and Reddit, you will see different opinions about LocalBitcoins. But, after reading more than fifteen reviews, in summary, the same things were said by most people – The platform is really great but we can’t be sure of the people. One comment in Redditor said that trades are as trustworthy as the person you are making deals with.
That is the reason why I am going to teach you how to securely trade on the platform.
Ways to Prevent Scam in LocalBitcoins Trading
Even though LocalBitcoins is a good platform, it’s the traders that are not so good. Since you are trading with people, you have to exercise the right precautions. These are the ways to guide you in trading safely.
When you are done filtering out sellers based on your desired method of payment and location, you have to make sure who you’re going to transact with. SELLERS SHOULD NOT BE CHOSEN BASED ON PRICE. There are times when it is worth paying five percent more so that you can have transactions with a trustworthy seller. You should check on the seller’s history of transactions and double check his activities in the past.
Additionally, a request to purchase Bitcoins should be avoided since it will just attract many scammers. Why not look for sellers who are selling Bitcoins actively for they’re probably more legit.
Check the profile of the seller and see to it that he fits for the following:
Was able to trade over 100 Bitcoins in his lifetime but with 100 trades as minimum as well
At least has a 98% of a feedback score
Has an account for more than a year
Considered a verified seller (email, phone number, company account)
There’s at least ten people who trusts him
If you are able to follow these rules then you will probably be great. If you are unable to find a matching seller for all the criteria above, then look for the next best option. The concept is just doing a thorough research and seeing to it that the seller has large successful trades that are actually completed in the past
After that, look through the LocalBitcoins’ forum and check the username of that seller. If anything comes up like a complaint, you’ll most probably see it there. Otherwise, you should have found now your chosen seller.
You can send the seller a message to request for a trade and patiently wait for their reply.
Send more information before you are able to receive a reply from the seller.
Allow trading outside of LocalBitcoins with the seller for you won’t be protected by the escrow service of LocalBitcoins.
Share your payment details in ways aside from the message box of LocalBitcoins. Don’t do any phone calls, send emails or text messages. The LocalBitcoins interface should only be used.
Only then after your payment has been sent, you can mark payment as done or made, otherwise you will be denied probably from the trade.
Now, you just have to wait for the Bitcoins to show up in your personal LocalBitcoins account. If there’s any issue, try settling it first with the seller. You shouldn’t worry about losing your own money, if you only used the LocalBitcoins’ system then the escrows service will protect you.
Take note that if you are absolutely new to LocalBitcoins, there’s a big chance that “power sellers” will not do a trade with you since you don’t have adequate feedback yet. It means that you have to do a couple of small trades with a not so trustworthy seller first in order to raise your feedback and be able to transact with the highly respectable ones.
So those are the things that you need to know to safely use Localbitcoins. Just follow the procedure and you will ninety-nine percent avoid fraud. For any additional queries, just refer to the FAQ page of LocaBitcoins. Good luck!
Written on 16 Dec 2010.