LocalBitcoins launched from Finland in 2012 and provides it’s users with an alternative P2P way of trading Bitcoin, especially useful if you do not want to go through the verification process and do not require the full range of services associated with the established large exchanges. Buyers and sellers (usually local to you) agree on the terms of the trade and LocalBitcoins acts as the intermediary and a kind of Escrow ensuring everything proceeds as it should.
At the time of writing LocalBitcoins has ‘exchangers’ in 16,022 cities located throughout 248 countries and the list will grow as time goes on.
The sign up process is very straightforward, simply navigate to the site and register for an account. Once registered you will receive an email to verify your account and from your profile you can add further information as you feel necessary but all of the information is not required to find sellers. One recommendation is to activate 2FA (2 factor authentication)
The site allows members to conduct a wide variety of searches, including seller location, accepted payment methods, and ID verification requirements. When you’re searching a list of sellers will show in the results along with their reputation rating and previous transaction history. Also a green light indicates their response time to your request – green being within 5 minutes (amber is 30 minutes & grey longer than 30 mins).
The entire process is very simple but shop around to get the best deal. There are some chancers who will offer ridiculous rates just hoping for the 1 time someone maybe makes a mistake, I have seen BTC offerings way over the going rate (in fact one is captured in the screenshot above!). In addition to the rate you agree with the seller LocalBitcoins will charge a reasonable fee of 1%, but other external fees may apply so please check. There are a number of payment methods available including:
- Cash on Delivery
- Bank Transfer
- Western Union
Because LocalBitcoins operates an escrow service you are protected as the Bitcoins are deducted immediately from the sellers wallet once the trade is activated, this protects both you and the seller. If there are any issues there is a conflict resolution service and excellent customer support. It is quite obvious that the safest way to trade is with an established user with excellent feedback ratings.
- Simple to use
- Easy registration (just email)
- In some areas possibly the only way to purchase Bitcoin
- Numerous payment methods
- There is the possibility of rogue users so be aware
- Depending on method the fees can add up
- Exchange rates not as competitive as larger online exchanges