What is LocalBitcoins And How Does it Work?

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What is LocalBitcoins And How Does it Work?

LocalBitcoins is a cryptocurrency exchange with a difference. Based in Helsinki, Finland, the startup provides a platform for peer-to-peer Bitcoin trading. Registered users can use LocalBitcoins to advertise, buy, and sell Bitcoins, without having to use a conventional CEX exchange.

With LocalBitcoins, it is the individual sellers who set the conditions. For this, and several other reasons, the platform is often compared to Amazon or eBay. Sellers state the relevant exchange rates and the payment methods they accept, and buyers need to abide by these. The platform charges a fixed, 1% fee on successful transactions.

When a deal is agreed upon, the buyer and seller can choose to meet in person to trade the Bitcoin. Following the deal, both parties have the opportunity to review the other party, and this helps build credibility amongst users. Furthermore, LocalBitcoins offers an escrow service together with a conflict resolution team. As a result, this exchange counts over 110,000 active users worldwide, with around 2,500 Bitcoins traded daily.

How Does LocalBitcoins Work?

Although in the past using the platform could be done without user identification, the increase in users and trading volume has resulted in the need for better security. As a result, all active users today are duly registered and have undergone some form of KYC.

Registration

If you would like to open your LocalBitcoins account today, all you need is an identity document, such as a passport or national ID card. Register your email and follow the instructions to upload your document. Once your account is opened you can and should complete your profile. For safety and money laundering reasons, many users will not speak to you if your profile is not complete.

Search Trades

You can quickly start searching to buy or sell Bitcoin using the “Quick Buy” or “Quick Sell” tabs. You can use several filters, such as location or fiat currency, to narrow down the results. Another important filter is the payment method, since, depending on the seller, you could use LocalBitcoins to trade Bitcoins with PayPal, cash, or a variety of other methods.

Get to Know Your Buyer / Seller

At the edge of each offer, you will see a “Buy” or “Sell” button. Clicking on these will take you to the user information page. This is where you can evaluate the trustworthiness of the individual, and see stats such as the number of successful trades, overall feedback score, and status of profile verification.

Proceed with the Transaction

If you are satisfied with the conditions and the buyer or seller you should proceed with the transaction. In order to stay safe, you should always use the platform’s escrow service, which stores the Bitcoin until the funds reach the seller. Should the seller suddenly disappear, the team at LocalBitcoins resolution centre will be able to provide you with the coins.

Leave Feedback

Just like when you purchase an item from Amazon or eBay, you can and should leave feedback whenever you trade on LocalBitcoins. This helps keep the platform more secure and alerts other users to possible scams or other malicious activity. In more serious cases, you can also opt to block the other user without leaving feedback.

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