LocalBitcoins.com – Scam or Not?
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.
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 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.
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.
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 hasn’t been hacked in the past, due to its p2p nature. 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.
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.
- Private and fast
- Easy to Use
- No ID verification required
- Need to keep an eye for scams
- 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!