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LocalBitcoins 101: A Beginner’s Guide to Buying Bitcoin on LocalBitcoins (and Not Get Scammed)

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LocalBitcoins 101: A Beginner’s Guide to Buying Bitcoin on LocalBitcoins (and Not Get Scammed). thinkmaverick

LocalBitcoins, a popular peer-to-peer (P2P) bitcoin exchange, closed down in February 2023 due to market conditions.

 

If you are looking for a P2P bitcoin exchange to buy or sell, I recommend using LocalCoinSwap. 

LocalCoinSwap is a decentralized exchange that allows users to trade cryptocurrencies with each other without the need for a third party. The platform supports a variety of payment methods, including cash, bank transfer, PayPal, and Western Union.

 

 

Read my real review and get the full details of the pros, cons, how you can buy, sell and trade on this P2P exchange platform.

 

So you’re ready to invest in Bitcoin?

 

That’s a smart move.

 

Here’s the thing: the money you’ve in your bank account or wallet right now is about to lose (a lot of) value.

 

There have been trillions of dollars printed, with more probably on the way. And inevitably, everyone has to pay this hidden tax of inflation.

 

That’s right.

 

You’re paying the tax of inflation by just sitting in cash.

 

So why not convert some local currency into Bitcoin?

 

In fact, more and more people -especially millennials are drawn to bitcoin, a safe haven asset, to protect the value of money and perhaps reap long-term rewards.

 

With that said, understand exactly how Bitcoin trading and exchange platforms work can be pretty challenging.

 

Not to mention, due to government regulation and trading limits placed by international banking, some may need to pay premium prices for Bitcoin, especially those in developing countries.

 

What if there’s a better way to buy, sell and trade Bitcoin?

 

Let me introduce you to LocalBitcoins, one of the world’s longest–standing peer-to-peer Bitcoin exchange.

 

Unlike most centralized cryptocurrency exchanges (e.g. Coinbase, Binance) which are slow and cumbersome, LocalBitcoins makes Bitcoin trading process fast and easy. 

 

Instead of buying bitcoins off an exchange order book, you buy directly from another person who has a set price.

 

This way, you can shop around for the best possible deals.

 

Whether you’re a cryptocurrency newcomer who wants to purchase some bitcoins in a straightforward manner, or you’re simply fed up of dealing with complex candlestick charts, LocalBitcoins is for you.

 

While there are a handful of reviews and user guides for LocalBitcoins that have been published in the past, there have been some pretty significant changes to their service recently, and some of the information in those articles may be out of date.

 

That’s why we did some digging of our own to get all the latest information. After reading this quick guide, you will learn what LocalBitcoins is, how to use it, as well as the pros and cons, and you’ll be able to decide if it is right for you.

 

If you’re new to the world of cryptocurrency, you might want to check out the different ways of buying Bitcoin later:

 

If you’re not ready to start investing yet (with your hard-earned money), don’t lose heart. You can still earn free Bitcoin during your spare time. Check this out later…

 

What is LocalBitcoins? How does it work?

Having been started back in June 2012, LocalBitcoin is one of the oldest, biggest and most trusted P2P exchange platforms present today.

 

LocalBitcoins has done a fantastic job of connecting buyers and sellers in the marketplace, create a fully peer-to-peer Bitcoin exchange.

 

Kind of like Craigslist or eBay, but for Bitcoin.

 

You can buy, sell, and trade directly with other users from 249+ countries around the world through an intuitive platform without the need for a trusted third party.

 

And it supports over 60+ payment methods.

 

That’s what makes it different.

 

You communicate and trade directly with other users, choose to trade only if you’re satisfied with the exchange rate, terms and payment method. Once you send money to a seller using your preferred payment method, you’ll receive Bitcoin directly into your wallet.

 

Plus, there’s an escrow service to protect both sellers and buyers until the payment is done.

 

Until very recently, users could purchase Bitcoin without having to verify their accounts. THIS IS NO LONGER THE CASE. LocalBitcoins now requires email and phone verification for ALL users. In addition to that, in-person cash trading was removed from its service.

 

Rating★★★★★
WebsiteLocalBitcoins.com
CEOSebastian Sonntag
HeadquartersHelsinki, Finland
FounderJeremias Kangas
FoundedJune 2012
Customer ServiceKnowledge base
More informationRead review

 

Pros

 

Cons

 

How Can I Buy Bitcoin with Localbitcoins

LocalBitcoins acts as a mediator that matches people who are willing to trade bitcoin.

 

Buying and selling Bitcoin on LocalBitcoins is pretty straightforward.

 

What’s great is that LocalBitcoins will automatically provide a free Bitcoin wallet for all users upon signing up.

 

STEP 1: Sign up for an account for free on LocalBitcoins.com

 

Click on the sign up button to get started on creating a LocalBitcoins account. Fill in the details in the form provided – enter your username, passwords and email address.

Make sure your password is memorable, yet hard to crack.

 

Once you click the “Register” button, an email will be sent to your inbox. Open it and click on the link in that email to confirm your account.

 

You’ll also get a free wallet to keep your coins.

 

STEP 2: Verify your account

Depending on your country and level of activity, you need to submit documents such as passport, identity card or driver’s license. (Read on, I’ll explain this a little more later)

 

STEP 3: Search for a Bitcoin seller

Log in to your LocalBitcoins account and click “Quick buy”.

 

Select your country, preferred payment method and enter the amount of Bitcoin you want to buy in your local currency.

 

Alternatively, choose “All online offers” to see the list of all payment methods available.

Click “Search” and LocalBitcoins will immediately show you a list of offers according to your search requirements.

 

STEP 4: Find a reliable seller

 

From the list of sellers, always choose one with a good reputation score and a high amount of trades.

 

Also, take the response time into consideration:

 

Click on a trader name, and you’ll come to a page where you can check out seller’s profile, trade volume, transaction history and ratings.

 

STEP 5: Pay the seller

 

If you agree to trade, enter the amount you wish to buy and click “Send trade request”.

 

Don’t click the button if you’re not ready to buy Bitcoin with the seller. Because if you don’t make a payment within a given timeframe, the trade will be automatically cancelled.

 

Follow the instruction and make a payment to the seller via the chosen type of payment.

 

STEP 6: Receive your Bitcoin

 

The escrow will release the bitcoins into your LocalBitcoins wallet instantly.

That’s it. You just made your first Bitcoin investment.

 

TIP: Don’t store your Bitcoin on Localbitcoins any longer than you need to. Move out your Bitcoin from your Localbitcoins wallet to your own hardware wallet like Ledger or the Trezor once you complete a transaction.

 

Selling/ Buying Limits

Currently, LocalBitcoins has 4 account verification Tiers that come with different buying limits.

  • T0 : Trade up to €1,000/year. Requires your full name, country, email address and phone number.
  • T1: Trade up to €20,000/year. Requires T0 documents + physical address, ID verification and KYC info.
  • T2: Trade up to €100,000/year. Requires T1 documents + proof of address.
  • T3: No limits. Requires T2 documents + extra ID verification.

 

LocalBitcoins Fees

LocalBitcoins doesn’t charge you any fees to buy bitcoin.

 

You can register an account, buy and sell Bitcoin on LocalBitcoins at no extra charge.

 

You’ll only asked to pay for 1% advertising fee or escrow fee if you choose to advertize your buy/sell orders.

 

This means, if you buy or sell bitcoins without creating advertisements, then there’s no fee charged.

 

What’s more, transferring coins between wallets of LocalBitcoins is also free of charge.

 

The only fee you need to pay is Bitcoin transaction fee, that’s when you want to withdraw your coins from your LocalBitcoins wallet to your own Bitcoin wallet.

 

Do note that you’re actually paying this transaction fee to miners (NOT LocalBitcoins) for getting the transaction included in the Bitcoin network.

 

Can I Buy Less than One (1) Bitcoin?

Yes, you can. In fact, you don’t have to buy 1 whole bitcoin as your first crypto investment. The Satoshi is the smallest unit of Bitcoin. A unit of satoshi is equal to 0.00000001bitcoin.

 

From the offer, you can see the “limits” set by sellers – the minimum and the maximum amount of Bitcoin that can be purchased from the advertisement.

 

Payment Methods and Exchange Rates

There are over 60+ payment methods to choose from, such as:

 

Since LocalBitcoins does NOT have a fixed market price. And users set the pricing, you’ll notice that different payment methods will have different exchange rates.

 

Using payment methods that can later be charged back are considered “risky”, and thus, incur higher exchange price.

 

For instance, it costs only 9178GBP to get 1 BTC if you pay through bank transfer, but you need 10638.55GBP to get the same amount of 1 BTC if you pay via Paypal. That’s 1460GBP difference!

 

Is Localbitcoins Safe to Buy Bitcoin?

 

Yes.

 

Localbitcoins is legitimate and I’ve personally tested and used it. It’s one of the cheapest ways to buy Bitcoin without paying fees- especially useful for those live in developing countries where banks that support accounts of cryptocurrency exchanges are limited.

 

Can You Get Scammed on LocalBitcoins?

 

You’re dealing with strangers on Localbitcoins. Undeniably, it also attracts a small number of scammers who aim to defraud honest traders.

 

But don’t worry.

 

Here are few tips to help you stay safe while trading Bitcoin on LocalBitcoins:

  1. Don’t choose a seller based on price! If the price seems too good to be true, it probably is. Always pick a reliable seller based on their history, feedback score and trade volume.
  2. Before you start any trade, make sure you read the seller’s profile. Only deal with users if they meet these requirements:
    • They have traded over a total of 100BTC with over 100 completed trades.
    • They have at least 98% positive feedback.
    • They have an established account with more than 1 year old.
    • They have verified their account (email, phone number).
    • They are trusted by at least 10 people.
    • They have a complete profile.
  3. Enable Two Factor Authentication (2FA) to enhance your account security. If you need help, check out this article.
  4. Always communicate and conduct all of your transaction on the Localbitcoins platforms. There’s no escrow service that can protect you if you do all or part of your deal outside the platform.
  5. If you’re a buyer, check that the seller’s payment account details are compatible with their LocalBitcoins’ verified name.
  6. Never click on the Cancel Trade button if you’ve already make a payment to the seller.
  7. If you’re a seller, never release the Bitcoin from escrow manually before you verify that your payment has been received!
  8. If there are any disagreements in the trade, open a dispute.
  9. Don’t open any links that your buyer/seller is sending to you.
  10. Bookmark LocalBitcoins in your web browser. And use the bookmark every time you visit the site to avoid accidentally clicking phishing websites.

 

Conclusion – Is LocalBitcoins safe?

LocalBitcoins is a trustworthy and legitimate company. The sign-up and verification process is smooth and straightforward.

 

It’s very easy to use, allowing anyone in the world to buy/sell bitcoins using a wide range of payment methods with zero fees.

 

That said, LocalBitcoins is NOT a scam. In fact, they takes the safety of your money very seriously. However, you still need to use caution and watch out for scammers on LocalBitcoins.

 

If you incorporate the safety measures mentioned above, you don’t have to worry about getting scammed.

 

I hope this article cleared up some of the questions you had about LocalBitcoins and how to use it.

 

All in all, take that first step, go out there and start exploring today, you will never know how it works unless you start today.

 

Are you ready to convert your money into Bitcoin?

 

What do you think?

Would you use LocalBitcoins to trade Bitcoin? Why or why not?

 

Last but not least, if this post was of any help to you, please share it on Facebook, Twitter and Pinterest!

If you think any of your friends would find this helpful, share this post with them.

 

I’ve handpicked a few guides for you to read next:

 

I live and breathe making an income online. 

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