Is LocalBitcoins.com a Scam? My Experience With This Place
If you are looking to buy and/or sell Bitcoin, then LocalBitcoins.com is one of the options out there. But with all the hype surrounding this new crypocurrency there are a lot of scams lurking in the shadows and you can never be too safe. Its like the wild west when it comes to Bicoin and you need to careful where you trade.
So anyways… is LocalBitcoins.com a scam? Or is this a safe site that can be trusted? I have been using this site along with several others on an off over the past year. Overall the site itself is definitely not a scam, but there are some things that you need to be aware of if you are thinking about using it. And in this short review I’ll be going over what you need to know.
When it comes to Bitcoins its a dangerous world out there. There are Bitcoin investment scams like Gladia Coin and Cointherum, there are cryptocurrency exchange scams, there are scams of all kinds. I hope to clarify and show you the truth of this LocalBitcoins site here in this review.
- Website: localbitcoins.com
- Type: Peer to Peer Bitcoin Trading Site
- Recommended?: For some people, more on this
LocalBitcoins.com is what you call a peer to peer trading site. Basically it is just a platform that connects people looking to sell Bitcoin with people looking to buy Bitcoin. It facilitates the trading process between people and helps to ensure a safe transaction.
This site has been been around since 2012 and is headquartered in Helsinki Finland. They have been able to keep a pretty good reputation over this time period and that is because this is a decent trading site overall.
How It Works
Ok, so this site is for both buyers and sellers alike.
Sellers can post trades on the platform where buyers can then go and find these trades. Alternatively, buyers can post trades and specify how many Bitcoin they are looking to buy, how much money they are willing to spend, and what form of payment they will use and the sellers can then find buyers to trade with. So this platform works both ways.
The Process of Trading
Ok, so here is how it works if you are looking to buy Bitcoin.
First off, you will need to search for sellers that you want to buy from. What you will do is go to “Buy bitcoins” in the top menu. This will bring up a massive list of sellers. You can filter these results based on the amount of money you are looking to spend, the currency, the location of the seller, and the payment method you are going to use.
Just for the purpose of an example I will look for a seller in the US that is willing to sell me $100 worth of Bitcoin and that will except PayPal.
Ok, so I found this trader named bitcoin.PLUS at the top of the search results and clicked on his offer. He is offering Bitcoin at a rate of $3218.12 USD/BTC.
The Terms of the trade are listed over on the right hand side. These terms were created by the seller and you must follow these.
As you can see in the bottom right, he lists the steps you must make to trade successfully. He wants your Paypal email address, your name, a picture of your ID, and then on Step 4 (which you can’t see) he asks for a selfie of you holding a piece of paper with this trade written on it.
This is all to verify that you are legit and this is very common. Just about all of the trades I have made required the same thing.
You will have a 90 minute window to execute this trade. During this 90 minutes LocalBitcoins.com will take the Bitcoins out of the sellers account and hold them in a safe escrow account. Then when the trade is complete and your payment is confirmed the Bitcoins will be released to you and will end up in your wallet at LocalBitcoins.com.
To start the trade you will “Send Trade Request” to the seller and then you will be able to communicate and go over how its going to go down.
So everything I just went over is how you go through the process of buying Bitcoin. As a seller you will be able to post a trade in which you will be able to specify the following…
- min/max trade amount
- % you want to sell the BTC above market value
- hours that the trade is open
- terms of the trade
- and more
One of the nice things about selling here is that you can specify the trade hours. So lets say you work a full time job and only have 2 hours from 8pm to 10pm when you are free. You can set your trade to only be open during those hours.
When someone sends a trade request you can accept their trade or deny them.
What I Like About LocalBitcoins.com
As I mentioned, when you start a trade LocalBitcoins takes Bitcoins out of the sellers wallet and holds onto them in a safe escrow account. This is so that you don’t end up paying and then they refuse to give you the Bitcoins. Once the trade is completed they will release the coins to you.
There is a pretty good reputation system in place where you can see feedback that sellers and buyers have received from past trades. This is important because you can see what other people think of the trader and any problems that they might have caused.
As a rule of thumb I only deal with people that have good feedback/ratings on this site.
Lots of Payment Methods
There are literally over 30 ways that you can buy Bitcoins on this site. You can pay with PayPal, MoneyGram, iTunes Gift Cards, cash by mail, credit cards, etc.
Remember, you are dealing directly with other individuals here. So they can ask for just about any payment method that they want. There are a lot of weird ways you can pay people for them to give you Bitcoins.
You can contact the support center by submitting a ticket. I would say that their support is pretty good and this is a very important aspect of a site like this.
What I Don’t Like
Sellers on this site can set their prices at whatever they want. You will often see people trying to sell Bitcoins at extremely high prices that are way above market value. This is especially common from people that accept more desirable payment methods like PayPal. This is the main reason that I hardly use this site any more.
There are good deals but many are ridiculous.
Each trade cost the seller 1% of the total trade amount. This is only a pain for sellers but honestly isn’t too much. I don’t really like it but I see it as necessary.
LocalBitcoins.com does a good deal to ensure safety for all traders but they will never be able to totally eliminate all the scammers out there. There are scams that occur.
Although LocalBitcoins holds Bitcoins in escrow it is still possible for sellers to scam you. What could happen is that you could pay for the bitcoin as instructed and the seller could simply say that you did not pay. You can always dispute this with the support center but that doesn’t guarantee you will get your money back and depending on how you pay it can be hard to prove.
My advice here is to only deal with reputable traders. I have never been scammed and that’s because this is what I do.
Final Thoughts & Do I Recommend LocalBitcoins.com?
Ok, so LocalBitcoins.com is definitely not a scam. They are just a 3rd party platform that hooks buyers up with sellers and helps create a smooth and safe transaction of money for Bitcoins, etc. They do a darn good job in my opinion of keeping it a safe environment and I have never had any problem with them.
I would recommend them for both buyers and sellers. My biggest problem with this site isn’t the site itself, but rather the sellers on the site. There are just too many ripoffs with people selling Bitcoin at extremely high rates. This is why I rarely use the site anymore, because its hard to find a good deal sometimes.
A better choice when it comes to price is CoinBase. They sell at market value and not at inflated prices. They are basically like one big Bitcoin bank and you buy from them, not from individuals. They are definitely better when it comes down to the price and you don’t have to jump through a bunch of hoops to buy the Bitcoins.
Anyways, that’s my review. I hope you found this helpful and all. If you have any questions, comments, or concerns leave them below in the comment section and I’ll get back to you soon 🙂