Based in Finland, LocalBitcoins was established in 2012 and has risen to become one of the largest peer-to-peer (P2P) cryptocurrency exchange. LocalBitcoins allows traders to post advertisements where they offer the exchange rate and payment methods for buying or selling bitcoins. Traders reply to advertisements and agree to either meet the person to buy bitcoins with cash or trade directly with online banking.
The services offered by LocalBitcoins differs a lot from other online exchanges where you are dealing directly with the exchange. LocalBitcoins enables Bitcoin to be purchased and sold based on user supply and demand. This opens up different strategies for purchasing and selling as well as additional security matters to consider.
LocalBitcoins Crypto Currencies
LocalBitcoins is a specialist in Bitcoin transactions. Bitcoin is the only cryptocurrencies currently supported for trade via the P2P LocalBitcoins search system. However, when viewing the contact details of some advertisers, traders will find that there is some additional offers of altcoins such as Ethereum, Dash and Ripple. But this is dependent upon the advertiser.
LocalBitcoins Security and Licensing
Account security at LocalBitcoins is enabled through two-factor authentication and a login guard. The two factor authentication works by requiring a one-time code from mobile phone or printed paper in addition to the account password. LocalBitcoins’ login guard remembers the web browsers and verifies logins are coming from the same browser. If an unknown web browser is encountered, an email confirmation is required before the login can proceed.
Because traders using LocalBitcoin are transferring currencies in a P2P environment, users are more exposed to the possibility of encountering online fraudsters and scammers. To address this, LocalBitcoin goes far to advise traders of the risks associated with the payment methods available on the site. It also provides low, medium and high risk classification of the various payments methods that traders can choose from. As mentioned on the LocalBitcoin site, it is a good idea to research a payment method before trading with it. Advising users to familiarise themselves with the terms of service and search online for other trader’s experience with the payment method.
|Risk level||Typical payment provider features||Mitigation|
|Low||The payment method is irreversible or almost irreversible.||It is safe to use this payment method, LocalBitcoins are aware of few or no issues with it.|
|Medium||The payment is reversible and LocalBitcoins receive the occasional report of fraud.||Set first time buyer limits.
Require reputation and account history.
Check the ID of the buyer.
|High||It is easy for the buyer to reverse the payment, reversals can occur weeks or months after the trade. The payment provider may lock your account without a refund after receiving payments for Bitcoin. LocalBitcoins are aware of several cases of fraud or other problems with trades. Proceed with caution.||Set very low first time buyer limits.
Require high user reputation and long account history.
Use trusted listings.
Check the buyer id.
LocalBitcoin offers a Bitcoin wallet for receiving Bitcoin transactions. Upon signing up with LocalBitcoins, users will receive their unique Bitcoin address. The wallet can be used to transfer Bitcoin to other users of LocalBitcoins as well as to users outside of the network.
The account user interface is straight forward and easy for beginners to navigate.
Registering, buying, and selling Bitcoin is completely free. LocalBitcoins users who create advertisements are charged a 1% fee for every completed trade.
Transactions to wallets of other LocalBitcoins users are free. Transactions to other Bitcoin wallets are subject to Bitcoin network transaction fee. When sending from LocalBitcoins wallet, a bitcoin network fee is reserved and deducted from your balance. Transactions to wallets of other LocalBitcoins users are free. Current outgoing bitcoin network: 0.00022311 BTC
LocalBitcoins Trading Features
As a peer-to-peer trading environment, the LocalBitcoin trading interface is quite unique. Taders post advertisements on the platform, stating exchange rates and accepted payment methods for selling or buying Bitcoins. Other users can reply to the advertisements and arrange to either meet in person or execute the trade online. When searching for Bitcoins, traders can select:
- The amount
- Currency to purchase in
- Payment method
LocalBitcoins also has a reputation system and feedback mechanism to help the members distinguish the trusted 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 as it’s possible to encounter fraudsters and scammers.
LocalBitcoins Deposits and Withdrawals
LocalBitcoin offers over 50 deposit methods that are available when purchasing Bitcoin from other users. The deposit methods are categorised according to a low, medium and high risk scale. Preference is given to low risk funding methods such as Bank Wire. These risk levels apply only when you are selling bitcoins online as the risk comes from accepting payments that can later be charged back. When you are buying Bitcoins you are completely protected by escrow as long as you have proof of payment.
For withdrawals, clients holding Bitcoin will need to transfer to another Bitcoin Wallet and withdraw through a cash settling exchange.
LocalBitcoins Customer Support
A 24 hour, 7 days a week support service is provided by LocalBitcoin via email and a support ticketing service. Users having issues with a particular advertiser or user will have access to dispute resolution services.
Perhaps one of the more impressive features of LocalBitcoin’s support was the comprehensive guides and FAQs that are available via the website. These cover everything from getting started, advertising, and most importantly how to use the exchange in a secure way.
Is LocalBitcoins regulated?
While LocalBitcoin utilises AML/KYC policy, we couldn’t find any information on their regulation status.
How safe is LocalBitcoins?
Safety is a big concern and a lot of information is dedicated to this on the LocalBitcoin site. There are a lot of advantages by trading in a P2P environment, but this opens traders up to encountering fraudsters and scammers. Identifying reputable traders to exchange with is done well at LocalBitcoins, but there is a degree of risk for beginner traders or the more naive.
Where is LocalBitcoins based?
LocalBitcoin is based in Finland.
How does LocalBitcoins make money?
LocalBitcoin makes money the exchange transfer fees and outgoing cryptocurrency transfers.
How to deposit in LocalBitcoins account?
Deposits are based on the requirements of the advertiser. Although there are over 50 deposit methods to choose from, it is recommended that traders use low risk, secure methods.
How to withdraw money from LocalBitcoins?
Withdrawals can be completed by transfering Bitcoin to another wallet and then withdrawn through a cash settling exchange.
How to open an account with LocalBitcoins?
Accounts can be opened via the LocalBitcoins homepage here.
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