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Local Bitcoins Review: Scam or a Decent Exchange?

Local Bitcoins Review: Scam or a Decent Exchange?

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Local Bitcoins at Localbitcoins.com is a Cryptocurrency exchange that has been around for quite some time now. If you want to trade Bitcoin in the traditional sense of buying holding and selling, then this is probably the best place to get started. 

The operations of this site are similar to those of Craiglist because people from all walks use Local Bitcoins for purposes of exchanging their local currencies into Bitcoin.

To use LocalBitcoins, one has to post an ad where they state their rate and preferred method of buying or selling Bitcoins. Users make a profit depending on their rates.

When you want to buy some Bitcoin, all you have to do is agree to their terms and buy their Bitcoins in cash. If you do not wish to meet them, you can just buy directly with online banking.

The reason why we have published this Local Bitcoins review is to inform you on how the site works and whether or not it’s a good exchange to use.

Local Bitcoins Review

One of the reasons why some individuals prefer LocalBitcoins over other exchanges is that they support a variety of payment methods.

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The last time we checked, we found out that Local Bitcoins is accepting PayPal, Wire Transfer, WebMoney, Western Union, Cash by mail or cash in person.

Since most individuals are paying in person when they use LocalBitcoins, they is no need to think of a credit card. However, PayPal still has this option since you’ll be funding your account with credit card if you don’t have a balance in your PayPal account.

It’s also worth noting that the payment method which you will chose determines the amount of fees that Local Bitcoins charges.

If you are a buyer seeking to pay with PayPal on Local Bitcoins, you should keep in mind that this can be very risky.

Generally, Bitcoin is a form of money whose transactions are not traceable. For that reason, many credit card issuers, PayPal included do not insure exchanges which are offering Bitcoins through credit card purchases.

To get Bitcoins at the best price when buying, people have always opted to use payment methods that are hard to reverse. These include wire transfers and cash deposits.

What are the transaction fees at Local Bitcoins?

Local Bitcoins is free to use if you’re looking to buy Bitcoins. However, sellers incur a fee of 1%. However, you also have to remember that once you have obtained the Bitcoins in your account and would like to send them to your personal Bitcoins wallet, you will incur standard network fees for that transaction.

Generally, the amount which you will pay to obtain the Bitcoin is a function of the sellers exchange rate. Sellers don’t charge any fee. Instead, they profit from the difference in exchange rates.

Is Local Bitcoins secure?

Definitely. The site has implemented a number of security features which should make it a safe place to transact local currency to Bitcoins and vice versa.

(a)Reputation system

Every trader on this platform has a reputation rank and trade history where you can check their past trades and gauge whether or not they are legitimate. The higher their reputation rank, the more trustworthy they are in this business. We would not hesitate to buy Bitcoins from such a person as their credibility has already been proven.

(b)Escrow service

Whenever you send money with the intention of trading it on Local Bitcoins, the system will hold it on Escrow. The funds can only be released when the seller has confirmed that the trade is complete.

(c)2 Factor authentication

This is known as 2FA in short. It is basically a feature which lets the user input a special pin number sent to their mobile device after passing the first log in stage. This is useful because people will never hack your account and still your Bitcoins in the process. However, keep in mind that Local Bitcoins has not enabled this feature by default. You will need to enable it on your own.

(d)Support and conflict management

We like their support who are always on stand-by, just in case disputes arise between buyer and seller. They will always help when these cases arise.

Generally, these security features make Local Bitcoins a safe place to transact from.

Community feedback

We love to scout major Bitcoin boards such as Reddit and BitcoinTalk. When you spend time on any of the threads here, you will see that people have various opinions concerning this Bitcoin exchange.

Generally, many people say that this platform is good to transact on. The only problem has to boil down to the people you are dealing with during transactions.

For that reason, the buyer always needs to exercise caution by following some general rules.

How to obtain Bitcoins at Local Bitcoins without getting scammed

You cannot choose a seller based on their exchange rate. If their exchange rate is too good to be true, you have all reasons on earth to doubt them.

On the other hand, you need to remember that reputable sellers will have a higher exchange rate such that one may even incur 5% or more to do business with them.

We are believing that you have already zeroed in on the seller based on their location and payment method.

What you need to remember is that it is better to pay more and deal with a legitimate user than to pay less and risk being scammed.

Of course you also need to check their reputation just to see how he has been doing in the past. This information should be readily available.

The other precaution that you should take is to make sure that you are not posting an ad informing users that you want to buy Bitcoins. If you do so, it will just attract many scammers.

The best thing to do is look for those who are actively selling BTC as they are probably more trustworthy than those you will attract if you post an ad like this.

The next step is to head over to their profiles and see if they have traded over 100 BTC in their lifetime and if they have they have processed at least 100 trades through the platform.

Their account have to be at least a year old. Their feedback score needs to be decent. That can be around the 98% mark.

The other thing to check is whether their contact and company details have been verified by Local Bitcoins. Last but not least, you need to see if they have been trusted by at least 10 people in the past.

Now, if the above conditions are a little bit tough to find, then your best bet is to find the closest person who can fit 90% of conditions mentioned above. We mean you just have to find the next best thing even if you can’t find someone who fits these requirements.

The last thing to do is probably conduct a search of their name on Local Bitcoins forum. If people have complained about them here, that’s a bad sign. If you find nothing, you’re good to go.

Our best advice for you

Now that you are fully away of what Local Bitcoins platform is and how to prevent yourself from getting caught by frauds, just head over there and sign up. You can also mine Bitcoins as an alternative way of obtaining Bitcoins.

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