LocalBitcoins is one of the oldest, most-trusted and widely used Bitcoin exchanges, although what made me scribble this LocalBitcoins review down is the fact that it differs from your normal Bitcoin exchanges quite widely.
Since around 2015-16 Bitcoin has gained quite a bit of mainstream media attention, not because a lot of people started understanding what Blockchain is or its true potential, but because to most it seems like a magic asset which multiplies money overnight.
Either way, to get their hands on Bitcoin anyone and everyone would need a Bitcoin exchange, and since there are quite a few out there today, it may be hard deciding which one would be the best choice.
There are quite a few factors which cash in when it comes to deciding the worth of a Bitcoin exchange, choose the wrong exchange, and you may not only end up paying a hefty fee but also probably would lose all your Bitcoins if the security isn’t good enough.
So in this LocalBitcoins review, I’d compare LocalBitcoins to some of the other top names in the industry, and bring out the differences and similarities between them.
Here are the factors which differentiate LocalBitcoins from the other exchanges available in the industry as of now:
- Slightly Longer Process
- Extremely Anonymous – No Documents Required.
- More Payment Modes Available – Nearly Everything is Accepted.
- Supports nearly All Countries.
- May have More Limitations.
- Unique Fee Structure.
- Great Security
What makes LocalBitcoins Unique?
As I’ve said already in the opening section of this LocalBitcoins review, the platform is unique and offers some features and options which almost no other cryptocurrency exchange in the market does.
The best way for me to explain LocalBitcoins is to say that it’s the “eBay for Bitcoins.” On other platforms users generally, buy/sell Bitcoins directly to the exchange itself and not any individual.
You click on buy and the exchange credits you with the amount of Bitcoins you’re buying; the same process holds true for selling Bitcoins as well.
While on LocalBitcoins, it’s not the company which buys or sells you Bitcoins, rather you deal with individuals, other people from across the globe interested in buying or selling you Bitcoins get in touch with you and get the deal done.
So in other words, LocalBitcoins is an escrow service, or simply a medium just like E-bay which helps you either find a buyer or a seller and doesn’t actually sell Bitcoins from its end. Although yes, it does guarantee some level of safety with its Escrow feature during the trade.
Slightly Longer Process
This is another one of the features I’d like to mention in this LocalBitcoins review which separates it from the other exchanges.
On other automated exchanges, you enter the amount you need, click on buy/sell and done! It’s particularly easy, simple and straightforward.
While on LocalBitcoins the process is rather long and needs some amount of research both for buyers as well as sellers. The most important part of it is being able to filter out the good, trusted buyers/ sellers from the scammers.
Then again, you need to find the cheapest or most profitable buyers/seller from the list of the trusted ones, and only if the person is willing to trade on your terms, which may be “Zero identity proof”, “amount” or anything else will the trade go forward.
Also, you need to manually text the sellers when you’re buying Bitcoins on LocalBitcoins and initiate a conversation with them before finalizing a deal.
In case you’re a seller, you need to post your listing or Ad so that buyers can find your offer and contact you if they’re interested.
So in a nutshell, the whole deed becomes somewhat longer and tiresome where on the other hand on automated exchanges like Cex.io or Binance you could buy or sell Bitcoins in seconds and literally in not more than 8-10 clicks.
Although on the other hand, dealing with an individual gets you more options so you may reap more profits if you’re a seller, or find a cheaper seller if you’re a buyer, it also has other benefits which I’ll talk about in the next section of this LocalBitcoins review.
I just mentioned that the trading process on LocalBitcoins is quite long, well that’s true, but it’s not without its perks.
LocalBitcoins is extremely anonymous, meaning no personal documents, card details, or anything else which can be personally linked to you are required.
Although some specific sellers may require identity proof in the case of large transactions, that’s the beauty of LocalBitcoins, you can always go with another seller who doesn’t.
Also, the payments you make to the sellers are “isolated”, meaning you send them the funds “outside” LocalBitcoins, maybe to their Paypal, Bank or any other receiving address, the point is those payments can’t be linked to this Bitcoin sale!
On the other hand, when compared to Cex.io or almost any other top Bitcoin trading exchange, they do require identity proofs which can be linked to your Bitcoin trades, wallet addresses, and your real-life identity.
Even for sellers, they do not need to reveal their identity to the buyers in order to sell their Bitcoins, although cell phone verification may be required in order to create an advertisement on LocalBitcoins.
So in a nutshell, where on the one hand the trading process on LocalBitcoins is comparatively longer, it’s also a lot more anonymous and private, and I will trade couple minutes of my life any day for anonymity.
More Payment Modes Available
How can you make the payments to a Bitcoin exchange to matter, don’t they? The good thing about LocalBitcoins is, it supports nearly every kind of payment method that exists out there.
The list includes, but certainly not limited to:
- Western Union
- In Person Cash.
- Direct Bank Transfers
- Other Altcoins
- Cash Deposits
- Gift Cards
The list is longer, but I’m sure you’re getting the idea. The fact that you don’t need to pay the “company” and are rather paying an individual makes it possible for you to use just about any payment method out there.
In some cases, you can even pay the person with methods “not listed” in the list, that’s so because once you initiate a conversation with the other party, you can let them know which payment mode you’re comfortable with and they may accept.
Again, comparing it with other exchanges out there, in those cases, you generally need to deposit some amount to your account and use that amount whenever you trade Bitcoins.
As those are companies and automated bots you need to deal with. Obviously, options such as gift cards and cash become obsolete. Only a handful of options such as credit/debit cards or Paypal kind of payment modes remain.
Not only does the list get shorter, it also creates more footprints, every payment from your Credit/Debit card, Paypal or any other such payment processor can be traced and tracked, and also it can be verified whom you’re paying (Bitcoin companies) letting authorities or individuals link those payments to your Bitcoin trades.
So bottom line, when it comes to Payment modes there’s almost no exchange which can beat LocalBitcoins as long as we’re solely talking of Payment Modes.
Supports Nearly all Countries
Another feather in the cap of LocalBitcoins is its country-support. Because it’s a platform based on real people across the globe, and as people exist in almost all the countries on the planet, LocalBitcoins can be used to buy/sell Bitcoins almost anywhere (with some exceptions).
The list of available countries includes, but again not limited to:
- United States (Not all states).
- Switzerland etc.
The “country list” shows all countries as there always can be an individual willing to buy/sell Bitcoins from that specific country. However, there’s no guarantee that you’ll always find a seller or a seller who suits your needs in your country.
Obviously, you can also buy from sellers residing in other countries, as long as the seller agrees to it and you can make a payment to his/her requested address/account.
Although there are some countries where LocalBitcoins has been banned for one or other reason, Germany is one such country.
New York too is a state where LocalBitcoins ceased operation as the local laws required sellers to obtain Bitlicense in order to trade on the platform.
Russia again is one of the countries where LocalBitcoins was banned in the September of 2016.
So in a nutshell, LocalBitcoins is available almost anywhere, with some exceptions. And again if compared to its rivals, there aren’t many exchanges which support as long a list of countries as LocalBitcoins does.
Fee and Limitations
A major aspect of any Bitcoin exchange is the fee it levies, and the limitations that it imposes.
Here is the fee that LocalBitcoin levies on its users:
- Registration Free
- Fee for sellers who create advertisements for their offers: 1% of the sale.
- Sending Bitcoins from LocalBitcoin wallet to other third-party wallets are Free
- Merchant Invoicing: 0.5%
Although obviously the Bitcoin network fee is deducted from each Bitcoin transaction which is transparently reflected on the Wallets page.
As for limitations, there aren’t any except the country restrictions we just discussed, and some manually imposed restrictions by some sellers, who may require SMS verification or Identity proof before agreeing to a trade.
There are no limitations on amounts, number of trades or basically anything else either. So in a nutshell, the fee is negligible, acceptable and there aren’t any major limitations, quite the platform, isn’t it?
Account Security and Trader Verification Features
Now for the second last section of this LocalBitcoins review, how secure is LocalBitcoins? By secure I mean not only the account security but security in general encompassing trade, user-data, Escrow and everything else.
Well, first of all, LocalBitcoins has a two-step authentication feature which requires you to authenticate logins from your registered E-mail account.
Advanced authentication can be enabled which would require a one-time password from your mobile phones, or from paper sheets to login which makes it nearly impossible for someone to get into your account without proper authorization.
It also auto-notifies you in case there’s an unusual login attempt to your LocalBitcoins wallet.
In addition to account security, it lets you verify a seller’s creditability before trading with him/her, it shows you:
- Trade Volume
- No. of Trades + No. of different partners for each trade.
- ID/Passport Verification status.
- No. of users who Trust the trader.
- No. of users who’ve blocked the trader.
- Real Reviews by real people.
Now obviously, a trader who has traded 10-20 BTC worth of money isn’t likely to run away with your couple hundred or thousand bucks.
Secondly, if a trader has verified his Driver’s License / Passport or any other identity proof, he can be traced and that further reduces the risks of being scammed.
Finally, there are real reviews by users like you which can be read to get an idea how good or bad the trader is.
All these points combine together to prove that LocalBitcoins is pretty secure, as well as transparent when it comes to traders.
It also has a very efficient Escrow system in place, meaning if you’re a seller and you sell Bitcoins, the buyer doesn’t instantly get the Bitcoins and hence can’t run away with it without payment.
Rather it get’s deposited with LocalBitcoin’s Escrow till the payment is confirmed by the seller and only then are the Bitcoins released to the buyer.
The same holds true if you’re a buyer as well, the Escrow reserves the amount of Bitcoins you’re buying as soon as you initiate a trade, this makes sure that the Bitcoins are released once you make the payment and the seller doesn’t have any control over them.
So in a nutshell, LocalBitcoins has taken care of every aspect from the first (login) to the last step (confirmed trade) as far as security goes, so yeah it’s secure enough.
Support – Yay or Nay?
Support is a very important part of this LocalBitcoins review, primarily because it’s probably the only aspect I’m not satisfied with.
First of all, their ticket-response time is messy. We need to wait days just to get replies, and when they do reply, they’re generally just twisting and turning the question without any proper answers.
Also, there have been numerous cases of accounts getting banned without any serious or major reasons, and then the support doesn’t reply.
Also, when a trade is disputed by a buyer, they generally side with the sellers, no proof of payment seems to be of help in those cases.
So in a nutshell, LocalBitcoins is one of the best Bitcoin exchanges as long as you don’t have to deal with their support team although that’s my personal verdict for this LocalBitcoins review and your experience may vary.
So that’s a wrap as far as this LocalBitcoins review folks, I’ve tried to compare and contrast the platform with its rivals and bring out as transparent and honest a picture as possible.
Do let me know your verdict on LocalBitcoins as well as what you think of this LocalBitcoins review.