Anonymous trading has its own consequences; people get scammed a lot. After all, its all blockchain with the irreversible transaction mechanism; it’s a bit sceptical about sending a considerable amount to someone whom you met on the internet. But we are here to solve all your bitcoin purchasing problems once and for all.
In this segment, we bring you a review on a platform that goes by the name LocalBitcoins (LBC). It’s quite lucrative and super easy to trade with, but is it really safe? We have also debunked some common and popular malpractices that lead to scam and have even left our few cents on secure trading exclusively while you use LocalBitcoins. So lets’ get started.
LocalBitcoins | First Impression, Overview, Terms of Service and other Hidden Policies
Are you looking to purchase or sell their Bitcoins via trading for PayPal, Fiat, or any different suitable mode of payment that suits you? The answer is always a yes; no one wants a hassle while converting their BTC to cash, and usually, while someone trades for cash, they are in need of instant money. It’s just too lucrative and can be quite the opposite if the trade is made in bad faith. Let’s take a quick overview of what you can expect.
LocalBitcoins is Peer2Peer(P2P) exchange exclusive to Bitcoin trading that allows you to connect directly with the buyer/seller and complete the trade on the terms that suit both the parties involved in an exchange. Usually, the conditions are set by the Seller. You can call it Craig list for bitcoins.
Getting on to Terms and Conditions, let’s face it. No one actually reads this. Though it’s crucial to skim through it when you are down to some serious business, they have clearly stated that they will help to the best of their abilities if any scam ever happens.
The personal data that you may share for verification purposes may be sent to a third party, and you can even request the removal of that data from their website, which they will remove within 14days after you make any such request.
Getting Started with LocalBitcoins | SignUp and Trade Volume
You visit the website, click on signup, provide the necessary details such as username, email address, and you are all set. You are also required to give your name and verify the phone number and email address via OTP. With this, you can trade up to 1000€/year.
If you were thinking of staying anonymous and trade for a higher volume than you are dead wrong. The verification doesn’t just end here. You even need to verify your identity via basic KYC that involves address validation and identity verification via Passport or any other legal document that is used in your country. It’s a Tier-1 verification that will allow you to trade up to 20,000€/year.
Tier-2 needs address verification that grants you access to trade up to 200,000€/year, and in Tier-3, after you complete the Liveness test, you unlock access to unlimited trade volumes.
Most of the sellers mandate it to complete Tier-1 verification even if you are looking to trade below 1000€. That makes it virtually impossible to stay anonymous while trading on LocalBitcoins. Some may look at it as a con, while this process reduces scams and fake profiles and spam altogether.
Trading on LocalBitcoins
After you are done with the KYC procedure, it’s time to get down to actual business. You can buy bitcoins from the Quick Buy tab. Here you need to put the amount, location(country), and the payment mode (which we discussed in the next section). After that, you click on the search, and it will filter out as per your inputs.
The same procedure goes for selling. You put in your desired amount, location, payment method, and do a search for it. One parameter that you must look after is the trading limit that a seller has imposed. If you are selling or buying a huge amount, you might want to look for prospects with a higher trading limit.
Now, the ones who have a higher trading limit might not want to deal with you at first because you have a new profile, and there’s no feedback. To get out of this situation, you need to build a trustworthy profile, and to do that, it is essential to make a few small trades with lower trading limits.
Supported Payment Methods and Fees
It’s time to address the elephant in this segment. Whether you want USD via wire transfer, Payoneer, or you can even trade it with some altcoins. There’s also an option to trade in fiat as Cash In ATM, this usually is done in person and can threaten your privacy.
Some of the popular payment methods are Payoneer, PayPal, Western Union, WeChat, Swift, Skrill, etc. (Please avoid PayPal at all cost, we have covered this topic under Safety Checklist, do have a look).
Trading on LocalBitcoins is entirely free. You can send and receive Bitcoins from any LBC user at free of cost. However, they charge for advertisements that any user creates by keeping 1% of the transaction amount on every successful trade that you make. It’s a good thing that you can trade for absolutely free, unlike some other platforms that charge a lot.
There’s also a workaround for 1% trading fees, you can make your profile trustworthy, and traders will find you instead of you searching for them via advertisements. It’s no brainer that people who advertise will eventually trade more, but if you are looking for small-time trades, than avoiding ads and search for trusted profiles instead.
Mostly everyone claims that all regions are supported by LocalBitcoins, but their terms of service have a different story. They sure support almost every country out there. Still, due to some jurisdictions, they have to limit their trading schemes in the Federal Republic of Germany and the States of New York or Washington in the United States of America. Rest, everyone is welcome to trade on the LBC platform.
Reliable customer support is key to making any business grow. According to their terms of service, a seller or a buyer can raise disputes for any open trade, which is not marked complete. As you do deal under the umbrella of LBC’s Escrow, the chances are that any trade-related issues will be solved relatively quickly.
If we talk about user reviews, there is a blend of negative reviews among the positive ones on TrustPilot with positive ones lying around on Reddit. As a platform, it’s not buggy and can deliver stable performance.
If we talk about the prospects in terms of traders (buyers/ sellers), it’s open for everyone, and even they have no control over who signs up. Though its KYC system repels fake profiles, you need to be sure before trading.
Also, it’s hard to predict when the deal will go south, but there are certainly good and bad indicators which you must look after before trading with anyone. We breakdown these indicators, which you must look for in the upcoming section.
Secure trading must be your number one priority. Now how do you make a trade secure and stay on the safer side? Well, let’s get right into it.
First and foremost, it’s essential to check your security. With your security, it merely means to keep your account security in check. To do that,
You can enable this under settings > security > and click on enable 2FA. You always get an OTP to login. It’s good to have it around as even if your password is compromised, you can be sure that 2FA has your back covered.
Alternatively, if you use Telegram, then you can enable the telegram bot that will send you OTP and also give you trade notifications and keep you updated on what’s going on with your profile. You can activate this same way from security under the telegram tab.
Validate Seller / Buyer profile before trading
It’s vital to check out the prospect’s trading history before you even consider to trade with them. LBC allows you to do this just fine. After you have filtered out the best deals from the search bar, open the one you want to trade with and look for the feedback. Never ever choose a seller based on the price. There’s a higher chance of getting scammed when the deals are lucrative, just stay away from those profiles.
You need to find a reliable seller. Look for their past trading history. See the number of previous trades that profile has completed, check their feedback score, their verification status. Also, see if someone trusts them or not, and how many people have blocked their profile. While checking the feedback and past trading history, rather than completion status, look for dates when the trade was successfully completed.
If you ever come across such a profile where all the trades were completed in a single day, or it gained multiple feedbacks without any comments that too on a single day, without any backdated trading history, there’s a high probability that the profile is not genuine, and you need to avoid it at all costs.
Apart from these parameters, look for their median escrow release time. It’s time they took to release bitcoins in your wallet after you made the payment. It needs to be as minimum as possible, which just shows their activeness and depicts a smooth trading experience.
A quick overlook of what a reliable profile looks like would be
- They have completed at least 100BTC worth of trade over one year span or have completed at least 100+ deals with average trade ranging from 0.5-1BTC.
- Has an excellent feedback score (100% would be ideal, but it needs to be at least 95% and above).
- Trusted by 10% of people whom they have traded with. It merely means that if the profile has made 100 trades, then at least ten people must have marked the trader’s profile as trusted.
- Last but not least, the Seller must have a Tier-3 verification completed.
Also, it would be wise not to post any buying request as it will just attract a lot of attention and spam profiles in general.
Payment Methods for Sellers | Always Escrow
For Buyers on LBC, when a trade is started, the Seller has to send his BTC to an escrow wallet that is controlled by the LBC platform. Once the Seller marks the payment as completed, his BTC will be transferred to the buyer’s wallet. Now, if any seller does not agree with this process and makes any excuse, just block that profile and report it as it is sure a scam.
For Sellers on LBC, you will get multiple buying requests. You might want to filter the genuine buyers out. Now it may seem virtually impossible for a seller to get scammed as there’s the involvement of an escrow service, but it is so easy to scam. Firstly, don’t accept PayPal or any other form of reversible transaction. Here, the buyer will send you money over PayPal, and as soon as you mark the payment as a success, Escrow will release your BTC to the buyer’s wallet. After this, the buyer will revoke the transaction over PayPal, and the amount will be blocked and reversed to where it came from.
It’s a common scam tactic and must be identified early. It’s also not advisable to exchange BTC face to face or Cash Deposit over ATM. It just voids privacy, and you might get into trouble with authorities in case if it’s illegal to trade BTC in your area.
Communicating with prospects
Excellent and clear communication is a sure sign of professionalism. Now, there are some key points that you must keep in mind while chatting with a seller or a buyer.
- Never share your personal information. Be it your phone number, email address, or any other medium of communication. Use LBC as your only means to communicate.
- If any profile asks you to message them over any other platform by making an excuse that they are not much active here, please refrain from trading with them. Block and report them instead.
- Refrain from trading outside of LocalBitcoins.
Now, once you have followed everything, you can be sure to make a trade. Also keep in mind that you are not supposed to mark the payment as sent or received before you actually do, that if done, will just release your BTC or mark the trade as incomplete and cancel it even if the Seller receives the BTC and you won’t be able to do anything as the BTC will be sent back from Escrow to the sellers wallet.
If you are a seller, and have not received the payment or have received only half payment and the buyer is asking for the BTC to be release and then only they will send the remaining sum, please feel free to contact the LBC support team. They are active 24/7 and will guide you through everything. They even become a mediator to ensure that the trade will go smoothly.
Overall, LocalBitcoins is an excellent trading platform for small towns and remote areas where it is tricky to get BTC from any other exchange. Rest, you need to be alert all the time while making a trade. Never fall for low price gimmicks.
It isn’t worthy at all. We wish you safe trading while you give LocalBitcoins a shot. Do let us know in the comment sections on what trading platform do you prefer to get BTC or exchange it in fiat or any other form of currency.