What is LocalBitcoins
They are a Peer-to-Peer Bitcoin exchange complete with Escrow service. In the Marketplace users can buy and sell to each other.
Buyers can browse the Marketplace to find traders selling in a variety of different payment methods. Sellers called Traders can create Advertisements and offer the payment methods they prefer to receive in.
With the ever changing laws in different countries amount of Traders may vary from time to time.
Where is their website and other useful links?
Protection
As I mentioned earlier there is the Escrow Service, basically the sellers bitcoins are held and once payment has been confirmed they are released. This negates a situation where a seller doesn’t send the bitcoins, as LocalBitcoins support will release the bitcoins if you provide proof of payment. Bear in mind this protection is only for Online Trades.
Now as a seller things are a bit different, what you need to consider if the payment methods you use.
Payment Methods for sellers to consider
The main risk for the seller is that at some point down the line they do a chargeback, which may mean your account is locked and no refund of your Bitcoins. Given the protection in favour of buyers with some payment methods this could happen, days, weeks or sometimes months after the transaction.
National bank transfer, SEPA (EU) bank transfer, Cash deposit, QIWI, Swish – Consider these low risk as these methods are either irreversible or almost irreversible.
Moneygram, Western Union, MobilePay, Yandex Money, Pingit, PostePay, Xoom – Consider these Medium Risk in that the payment is reversible and LocalBitcoins receives the occasional fraud report.
OKPay, Paypal, WebMoney, Neteller, PerfectMoney, Payza – Consider these High Risk. It’s very easy for the Buyer to reverse the transaction, do a chargeback or other things to gain a refund whilst keeping your Bitcoins. LocalBitcoins are aware of several cases of fraud or other problems with trades. Although accepting these payment methods maybe profitable with the increased profit comes increased risk.
Trade Methods – Local and Online, what’s the difference?
Local trades are meant to be carried out face-to-face, and escrow is not automatically enabled. Given the current pandemic this is perhaps not the best or safest thing to do. But if you do, then do not pay the seller using an online payment method.
Online trades are as the name suggests done online through the trading platform and unlike Local Trades you do not meet your trading partner. Escrow is automatically enabled and funded for Online trades, meaning that as a buyer you’re automatically protected by the escrow system. Most trades therefore on LocalBitcoins are online trades.
PROS vs CONS
PROS:
- In some countries, it can be the only way to buy and sell bitcoins
- LocalBitcoins offers one of the most private ways to purchase bitcoins
- Provides a lot of different payment methods
CONS:
- Fees can be slightly high when buying with some payments method
- As with any online marketplace beware of scams and scammers