LocalBitcoins peer-to-peer cryptocurrency exchange – 2021 review
|Product Name||LocalBitcoins P2P Exchange|
|Fiat Currencies||AUD, USD, EUR, GBP, CAD, CNY & 120+ more|
Bank transfer (ACH)
|Deposit Fees||Fees vary|
Learn more about LocalBitcoins:
What fiat and cryptocurrencies are supported?
- Supported fiat currencies: AUD, USD, EUR, GBP, CAD, CNY & 120+ more
- Supported cryptocurrencies: 1 cryptocurrencies
Which payments methods are accepted?
- Bank transfer (ACH)
- Credit card
What’s it like to use LocalBitcoins?
Fees and limits
The fees below are accurate as of 11 October 2019.
|Buying and selling||Free|
|Posting a successful advertisement||1% on completion of the trade|
|Transactions between LocalBitcoins wallets||Free|
|Merchant invoicing service||0.5%|
|Custom work (e.g. research of external issues)||EUR€200 per hour. Minimum billable amount is EUR€200.|
How fast will my funds be available?
Fiat payments. How long a payment takes depends on the payment method you and the other trader use.
Upon received payment
Bitcoin release from escrow. Bitcoin sellers will typically release BTC from escrow as soon as they receive your payment.
Is LocalBitcoins safe to use?
- Regulation. LocalBitcoins operates around the world in compliance with local laws. Traders are required to provide identification for most transactions, and reputable traders on LocalBitcoins will typically require identification from their counterparts.
- Verification process. LocalBitcoins has different verification tiers, with all except the lowest requiring users to provide ID documents.
- Security features. LocalBitcoins has ongoing bug bounties and only gets involved in trades between users as the escrow provider. However, scams from other LocalBitcoins users are a constant problem.
How to avoid scams on LocalBitcoins
LocalBitcoins requires buyers and sellers to verify their identity for most transactions, and it has an escrow service to help prevent scams. But even with these precautions, there are still two common scams to watch out for when using LocalBitcoins.
1. Chargeback fraud
This scam targets Bitcoin sellers.
How it works
A scammer buys Bitcoin with credit card, bank transfer, PayPal or another service with reversible payments.
After the payment is made, they claim a chargeback through the payment service.
Now the scammer has the Bitcoin and the money, while the seller has no Bitcoin and no money.
How to avoid chargeback fraud
- Deal only with well-known buyers with a high reputation score on the platform.
- Check the buyer’s platform trading history for any gaps. These could mean the scammer purchased or otherwise acquired a high-reputation account to perpetrate the scam.
- Only deal with verified, identified buyers.
- Only make small transactions to reduce the amount lost if you become a scam victim.
- Be wary of offers that are too good to be true, or even slightly too good.
Outside of cash payments, which are not allowed on LocalBitcoins listings, there are no guaranteed ways of avoiding chargeback fraud.
2. Man in the middle scams
This scam targets Bitcoin sellers.
How it works
The scammer tricks someone into unknowingly purchasing Bitcoin, which is sent to the scammer’s wallet. This type of scam has two victims. Victim A (VA) is someone who wants to buy something online. Victim B (VB) is someone who wants to sell Bitcoin on LocalBitcoins.
The scammer offers to sell something to VA. This can be anything sold online, such as a car, clothing or anything you’ll find on eBay or Amazon.
Once a price is agreed, the scammer offers to buy exactly that amount of Bitcoin from VB and presents VB’s payment details to VA.
Now VA ends up paying VB, who releases the Bitcoin to the scammer after receiving payment. Naturally, VA will typically not receive the goods they thought they were buying and will typically initiate chargeback procedures.
Consequently, this scam can lead to innocent Bitcoin sellers losing money and being labelled as fraudsters and even having their bank accounts cancelled.
How to avoid man in the middle scams
All the same rules as avoiding chargeback fraud apply – only deal in small amounts and only with reputable and identifiable buyers. In addition, you can do the following:
- Where possible, ensure that the payment method incorporates ID, such as a bank account name, and that this matches the buyer’s ID.
- Ask for photographic confirmation of the payment, such as requiring the buyer to take a photo of themselves physically making the payment.
- Have smaller payment windows (e.g. require payment to be made within half an hour of a purchase being requested).
- Require a detailed description, including the purpose of the payment, on the buyer’s bank transfer.
Scams are a risk on any peer-to-peer cryptocurrency trading platform, and LocalBitcoins is not any better or worse than the others in this regard.
You can reduce your chances of being scammed by being careful, but there are no guarantees and even experienced traders sometimes fall victim.
If you don’t want to worry about the risk of scams, you should look for large, reputable cryptocurrency exchanges instead.
How do I create an account at LocalBitcoins?
What else do I need to know about LocalBitcoins?
LocalBitcoins is based in Helsinki, Finland.
It was founded in 2012 and has been a significant name in the cryptocurrency trading ecosystem since then.
In earlier years, it was best known as a no-ID cash-in-hand trading platform, but it now requires verification in most cases, and users can no longer select cash in person as a preferred payment option.
In a nutshell
- Low fees. The platform trading fees are low or even non-existent in some cases.
- Many traders. It’s a busy and global platform, making it easy to find trading counterparts.
- Risk of scams. Scams are a constant risk, and users need to be vigilant.
- Prices vary. In many markets, you’ll find a large spread between the buy and sell rates.