LocalBitcoins

REVIEW

Pros IconPros

  • Massive variety of payment methods
  • Incredibly easy to use
  • Plenty of buyers and sellers
  • Allows anonymous trading
  • Worldwide service

Pros IconCons

  • Massive variety of payment methods
  • Incredibly easy to use
  • Plenty of buyers and sellers
  • Allows anonymous trading
  • Worldwide service

I want to kick off my LocalBitcoins review by explaining what makes this cryptocurrency exchange so unusual.

When Bitcoin was just breaking onto the scene, it was popular for a few reasons. It was different from traditional fiats in its promotion of a decentralised financial system, complete user anonymity, and truly global nature.

Over time, more and more people realized how much money they could make through Bitcoin. Rather than mining it themselves, they could facilitate trading for others, which would surely remain profitable for longer than simple mining.

There are now nearly 200 cryptocurrency exchanges out there. As this sector has developed, it’s come to resemble traditional banking more and more. Things like anonymity and location irrelevance have fallen by the wayside.

LocalBitcoins.com breaks with the trend. It offers an opportunity to get back to the very basics of Bitcoin and reconnect with what cryptocurrencies stood for in the first place. In taking this “backwards” approach, it ends up as something quite rare in the modern marketplace.

How exactly does LocalBitcoins take this traditional approach? Does it still stand up against the more contemporary exchanges? These questions, and plenty more, shall be answered in my LocalBitcoins review.

LocalBitcoins Key Features

The term “feature-packed” could never be applied to LocalBitcoins—this is a very basic offering. LocalBitcoins is a peer-to-peer exchange, where users buy and sell Bitcoin directly with each other. This can be done online or by meeting in person.

Here are some of LocalBitcoins’s key features:

Liquidity

The first question that most people have when they hear about a peer-to-peer exchange is, “Is there anyone to actually trade with?” The short answer here is “Yes!”

LocalBitcoins is truly a worldwide service, with customers in over 16,400 cities and—according to them—248 countries (Yes, I know there are only 195 countries in the world. LocalBitcoins counts places like Jersey, a dependency of the UK, as a country).

Regardless, the point is that there are Local Bitcoins users absolutely everywhere, looking to trade with each other. Finding someone near you should rarely prove a problem.

Security

There’s only so much security you can implement on a peer-to-peer system, particularly one as committed to anonymity as this. Still, LocalBitcoins does as much as it can.

On this exchange, you’ll find two-factor authentication and Login Guard, a robust feedback system, and escrow for payments.

Privacy

Many modern crypto exchanges require you to verify your identity before trading. This is not the case with LocalBitcoins, which allows you to dive straight in.

Some independent sellers will still request ID verification, which is fine, of course. The important thing is that LocalBitcoins leaves the decision up to its users.

Payment Methods

I’ll dig into this in more detail later in my LocalBitcoins review, but there is an enormous number of payment methods on LocalBitcoins. These range from cash-in-hand to altcoins to Amazon gift cards.

If something you own has some monetary value, you’ll probably be able to find someone on LocalBitcoins who’ll swap it for BTC.

Bitcoin ATM

The Bitcoin ATM isn’t actually available to purchase right now. I just wanted to quickly mention it for two reasons. First, I think it’s fantastic; and second, it shows how committed the LocalBitcoins team is to replacing traditional currencies with cryptos.

The Bitcoin ATM doesn’t work exactly like its traditional counterparts. Instead, you insert cash into it, for a prearranged Bitcoin purchase. You’ll then be given a printed QR code, which you scan on your phone. Once you’ve done that, the transaction will process automatically. How cool is that?!

Supported Currencies

To be honest, it would probably be quicker for me to list which currencies aren’t supported in this LocalBitcoins review! This truly is a worldwide service, meaning that basically every fiat you can imagine is represented here.

Whatever country you’re in, you’ll almost certainly be able to use your own currency. That doesn’t mean you have to buy from a user in your country, however. You can actually search users by both the currency you want to pay in and their location. If you wanted to pay in RUB to buy Bitcoin from a UK-based seller, for example, you’d still have plenty of options.

On top of the fiats, there is also a wide range of cryptocurrencies supported here too. These include DASH, ETH, XRP, and LTC.

LocalBitcoins Signup and Login

LocalBitcoins always places an emphasis on simplicity and user friendliness. I’m pleased to report that this is certainly the case when you sign up at www.localbitcoins.com and subsequently go through the login process.

To register for an account, all you need to do is provide a username, email address, and password. Simply tick a reCAPTCHA box after that, agree to their terms of service and privacy policy, and you’re done.

The whole process takes about thirty seconds at most, and there’s no need to verify your identity before you start trading (although you will need to verify your email address).

If you need to log back into your account at any time, that’s simple enough to do. There’s no “Remember Me” option, but you simply have to enter your username and password, tick a reCAPTCHA box, and you’re done.

If you want to activate two-factor authentication or the LocalBitcoins Login Guard—both of which I’ll touch on in more detail later—that’s easy enough to do in the user area.

Interface

The LocalBitcoins interface is another example of how committed the development team is to making things basic. This is a website that’s entirely focused on buying and selling Bitcoins, and the interface is utterly geared towards that.

There’s no messing around on the home screen, no trumpeting all the features that are on offer or bigging up the brand. Based on your current location, LocalBitcoins simply displays your top options for buying and selling Bitcoin, cash and online transactions alike.

I’ll explain the trading process in more detail in the “How to Make a Trade” section shortly, but the screens you navigate for this are also extremely well designed. They’re basic, yes, and you could even call them unattractive. The point is, however, that they get all the actually important information over to you—the buyer’s or seller’s feedback, their terms, their trading limits, and so on—almost instantly.

The top bar is also a masterclass in simplicity and understatement. To the left, you have all the general sections you might need: Buy Bitcoins, Post a Trade, Help, and so on. To the right, you have your various personal areas neatly expressed by small icons.

The LocalBitcoins interface isn’t going to win any awards for its looks. Regarding its sheer usability, however, it’s absolutely outstanding.

Markets

In terms of its actual markets, LocalBitcoins is extremely limited. This is purely a Bitcoin exchange, with no other cryptocurrencies whatsoever available to purchase.

This alone renders something like a “LocalBitcoins vs Binance” debate moot. If you simply want to buy and sell Bitcoins, LocalBitcoins is certainly an option. If you want to become a full-on cryptocurrency trader, however, you should look for a much more feature-packed exchange like Coinbase or Binance.

The good news is that, as I mentioned in the Supported Currencies section, there is an enormous amount of currencies you can use to buy that Bitcoin. These include nearly every fiat under the sun, plus a host of cryptos.

Trading Tools

This is another area found wanting in my LocalBitcoins review for 2019. Again, however, it’s not something you can really fault the site for—simply because it’s not trying to be an all-round, flexible cryptocurrency exchange.

There are basically no trading tools whatsoever on LocalBitcoins. There aren’t any price charts (something which wouldn’t be too hard to implement, surely). There isn’t even a basic price guide showing how much BTC is generally valued at.

Instead, LocalBitcoins simply lets its users set the market entirely. Whether you like that approach or not will, in turn, play a large part in whether or not you’re interested in using this exchange.

Literally the only thing that could vaguely be called a “tool” is the LocalBitcoins API. If you’ve got coding talent, this allows you to do a few cool things, including querying the platform’s public trade data and setting up automated trading.

Finally, there doesn’t appear to be any official LocalBitcoins app at this time. This doesn’t mean, however, that there aren’t several third-party apps out there that claim to let you use LocalBitcoins.

I urge you to exercise extreme caution if you’re determined to use one of these, as it’s not the smartest move to give an unknown developer access to your financial data. Simply using the mobile version of LocalBitcoins (which works very well anyway) seems a safer choice.

How to Make a Deposit

LocalBitcoins isn’t like most cryptocurrency exchanges, in the sense that you rarely actually make “deposits” to your account.

If you’re buying Bitcoin, then you never need to deposit anything into your account. Instead, you simply send the payment—whatever form it’s in—directly to the person selling you the BTC. (If you choose to pay by LocalBitcoins cash deposit, then I guess you’re “depositing” something, but it still isn’t going into your actual LocalBitcoins account.)

If you’re a seller, then you will need to deposit the Bitcoin into your account before the trade. Doing so is extremely easy.

Once you’re signed in, you can simply open up the LocalBitcoins wallet and find your “Receive Bitcoins” address. Copy that Local Bitcoin wallet address and use it to send BTC from wherever you’re holding them to LocalBitcoins. Once the transaction has gone through three confirmations, the funds should show up in your account, ready for trading.

How to Make a Trade

When literally the only thing your platform offers is the ability to buy and sell Bitcoin, well, you’d better make sure it’s done really, really well!

Fortunately, LocalBitcoins accomplishes exactly that. Whether you’re buying or selling, the trading process is extremely streamlined and easy to understand. This is helped by some excellent “How to use LocalBitcoins” tutorial videos on the site.

Let’s look at the mechanics of buying Bitcoin first. The easiest way to start off is by using the “Quick Buy” search, located on the front page.

Simply fill in the currency you want to pay with, the amount of that currency you want to spend, the country you want to buy from, and your payment method. Once you’ve hit “Search,” you’ll be shown all the sellers out there who match your criteria. The screen will look something like this:

All the most important information is displayed to you at one glance: each seller’s feedback rating, their price to sell 1 BTC, and their personal trading limits. Look around until you find someone you like the look of, then hit “Buy.”

You’ll be taken to a screen showing everything you need to know before completing the trade. All the aforementioned vital tidbits will be included, as well as a personal “Terms of Trade” section written by the seller, which outlines exactly how they like to make transactions. If they require ID verification from you before the trade—as many sellers do—this is where they’ll tell you.

If you’re happy with everything, then enter how much BTC you’d like to buy, write out a message to the seller, and send a trade request. Bear in mind that from this point forward you have committed to the trade if the buyer agrees.

Once everything’s lined up, and you’ve made your payment, click on “I have paid.” The seller will check that funds have appeared in their account, and if everything’s okay, the BTC will be transferred from escrow into your LocalBitcoins wallet.

So that’s how you buy Bitcoin. There are two different ways to sell it on LocalBitcoins.

The first is to sell directly to a person. This works in a very similar way to buying—you do a search, find a potential buyer that you like, and offer them a trade.

The second way is to post an advert. This is what shows up when buyers carry out their searches. To do this, you will need to verify your ID with LocalBitcoins and have at least 0.04 BTC in your wallet. Once you’ve satisfied those requirements, you can advertise how much BTC you’d like to sell, your preferred payment method, and so on.

All in all, this is an extremely simple system, which even absolute beginners can immediately get the hang of.

LocalBitcoins Fees

Generally speaking, there aren’t too many fees to fear when using LocalBitcoins. All the fees that are in place are clearly stated and explained on the website.

Aside from the trading fees (which I’ll outline in the next section), the only fees to be aware of are a 0.5% charge for using the invoicing service, and a network fee (which LocalBitcoins has no control over) that will be charged on Bitcoin deposits.

Trading Fees

There are a couple of trading fees to be aware of here, but they are extremely low compared to most of LocalBitcoins’s competition.

If you just buy or sell BTC, it’s completely free. Users will be charged, however, for posting an advert, with LocalBitcoins taking 1% of the value from a subsequent completed trade.

Aside from that, the only fees you need to be aware of come from the Bitcoin network. These will be applied to essentially all transactions involving Bitcoin, but, again, they’re out of LocalBitcoins’s hands.

Trading Limits

Much like the overall market price, LocalBitcoins allows its users to set their own trading limits.

Both buyers and sellers can post this on their adverts so potential trading partners are fully aware of the limits coming in. They are clearly displayed on search results, meaning no time whatsoever is wasted in trying to deal with someone whose limits are out of kilter with your own.

Security

Is LocalBitcoins safe? This might be a simple question, but it’s also a pretty hard one to answer.

Of course, this is mostly due to the peer-to-peer nature of the platform, which will always open itself to the possibility of scams. To its credit, LocalBitcoins tries to crack down on this by requiring sellers who post adverts to have their ID verified. Likewise, sellers can make ID verification a requirement before they sell to anyone.

LocalBitcoins’s excellent feedback system also helps in this regard. You can see someone’s feedback score in the search results without even clicking on their profile, allowing you to immediately discount unreliable users.

Finally, the developers also do their best to help secure your account, thus also lowering the chances of a LocalBitcoins scam. This is done through both 2FA and a Login Guard, both of which are easy to set up.

Customer Service

Cryptocurrency exchanges tend to struggle when it comes to customer support—at least, in terms of the support options they offer. Unfortunately, LocalBitcoins fails to buck this trend.

The main way to directly contact the customer service team is via a ticketing system, with the current listed response time being a hefty 2–3 days. There’s no live chat or phone support, so if you’ve got an urgent issue, you’ll simply have to wait. The LocalBitcoins team replies to Twitter messages too, but their responses also don’t seem to be the quickest.

The situation is somewhat rescued by a fairly good FAQ section. While it’s not the most comprehensive I’ve seen, the answers there are well written. There are also some nice tutorial videos explaining the basic “How does LocalBitcoins work?” topics.

LocalBitcoins Reputation

LocalBitcoins was founded in Helsinki, Finland, in mid-2012, which was long before Bitcoin really took off. BTC was only trading at around $6.50 at the time (which is unimaginable now), so founder Nicholas Kangas deserves a huge amount of credit for his foresight.

Since then, LocalBitcoins has enjoyed tremendous success. It recently passed the 30 million trades mark and has truly become a worldwide exchange.

While LocalBitcoins’s reputation among critics (including yours truly) is genuinely excellent, some user-based LocalBitcoins reviews aren’t so great. Trustpilot currently has it pegged at a mere 3.8/10, with BitTrust reviews averaging 2.4/5. Most of the complaints revolve around scammers, as you’d expect, but there’s really only so much you can do about this on a P2P platform.

Overall, I’d say LocalBitcoins—thanks to its sheer long-term commitment to the original principles of cryptocurrencies—enjoys a solid reputation.

Conclusion

To judge LocalBitcoins fairly, you simply have to accept it for what it is.

This is not a direct competitor to a platform like Coinbase or Changelly, but it’s not supposed to be. This isn’t a do-it-all cryptocurrency trading platform. It’s simply a place to buy and sell Bitcoin.

When it’s evaluated on those grounds, I have to say that LocalBitcoins.com is a tremendous success. Its mechanics of advertising are great, buying or selling Bitcoin is simply flawless, and all of this is aided by a brilliantly minimalistic, straightforward interface. The endless payment options and the extensive worldwide user base also help make this a phenomenally simple service to use.

LocalBitcoins falls foul of some of the problems plaguing many crypto exchanges. The customer support could certainly be improved, and a few trading tools—perhaps at least a basic guide price for BTC—wouldn’t hurt. Thanks to its P2P nature, LocalBitcoins’s users will always be potential prey to scammers too.

This all goes back to the basics of what made cryptos so fresh and exciting to start with, and it executes everything brilliantly. If you want to buy or sell Bitcoin, this should absolutely be one of your first ports of call. All in all, I think LocalBitcoins is fantastic, which I hope I’ve made clear detailing all of its perks in this LocalBitcoins review.

Pros IconPros

  • Massive variety of payment methods
  • Incredibly easy to use
  • Plenty of buyers and sellers
  • Allows anonymous trading
  • Worldwide service

Pros IconCons

  • Massive variety of payment methods
  • Incredibly easy to use
  • Plenty of buyers and sellers
  • Allows anonymous trading
  • Worldwide service
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