If you want to make a bitcoin-based international money transfer, using LocalBitcoins.com is one of the best ways to do it.
Bitcoin isn’t usually the best medium to make an international money transfer. In fact, most of the time it’s actually slower and more expensive than other methods like forex services and even bank transfers.
A different story emerges with LocalBitcoins.com, a peer-to-peer exchange. Because you trade bitcoins with other people, you can find attractive exchange rates as long as other traders are willing to offer them. And best of all: LocalBitcoins charges very few fees, if any.
LocalBitcoins is such an effective option that you could theoretically complete an entire money transfer at no cost. Even if you don’t get a deal that good, you could realistically walk away with a low-cost money transfer that’s completed in as little as an hour.
|Product Name||LocalBitcoins P2P Exchange|
|Available Fiat Currencies||AUD, USD, EUR, GBP, CAD, CNY & 50+ more|
|Payment Methods||Cash, Credit card, Cryptocurrency, Debit card, BPAY, Flexepin, Neosurf, Neteller, M-PESA, PayPal, Perfect Money, WebMoney, Western Union, iDEAL, SEPA, Skrill, SWIFT|
- Available in more than 200 countries.
- Can be cheaper than other bitcoin and money transfer providers.
- No minimum or maximum transfers.
- Many methods for fiat currency delivery.
- May not be many sellers in some countries.
- You'll need to handle transfer details yourself.
- Buyers and sellers may set transfer limits.
- Some methods are considered high risk.
LocalBitcoins exchange rates
Bitcoin exchange rates aren’t set by LocalBitcoins — instead, they’re set by individual buyers and sellers on the platform. Because of this, exchange rates can vary.
When you buy bitcoins. you could theoretically get an exchange rate that matches the mid-market rate. However, this is unlikely because many users want to make at least a little profit for selling bitcoins.
More often, you’ll get an exchange rate that’s worse than the mid-market rate. The best online offers often hover around 1% above the mid-market rate. As an example, let’s say one bitcoin is worth $1,000. In that case, someone may sell a bitcoin to you for $1,010 instead.
If you’re willing to make bitcoin trades in person, you’ll often find even better exchange rates.
What is the mid-market rate?
The mid-market rate is what your money’s actually worth on the global market compared to another currency. It’s the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves.
Use the mid-market rate as a baseline to compare against the rates provided by your bank or transfer service. With it, you’ll discover which companies offer the best rates.
Just as people will post ads selling bitcoins, they’ll also post ads seeking bitcoins. If you have bitcoins, you may be able to sell them for better than the mid-market rate. Exchanging your bitcoins for 2% above the mid-market rate would be quite a good deal.
How much will it cost me to send money with LocalBitcoins?
Fees can be overbearing on other bitcoin platforms, but they’re relatively light on LocalBitcoins.
If you’re responding to an ad, you won’t pay a fee to buy or sell bitcoins. If you’re the one posting an ad, you’ll be charged 1% of the bitcoins traded.
When you transfer bitcoins to your recipient, there’s no fee if you transfer to their LocalBitcoins wallet. If you transfer to a third-party wallet, you will pay a fee of between 0.0001 and 0.0010 XBT.
What is bitcoin’s three-letter currency code: XBT or CBT?
In its earliest days, bitcoin’s currency code was CBT. With its growing acceptance as a legitimate currency, the International Standards Organization (ISO) has since designated bitcoin’s notation as XBT.
As bitcoin’s legitimacy (and the general public’s interest in it) increases, you’ll continue to see references to both CBT and XBT until one eventually sticks as the standard.
|Buying and selling option||Description|
|Buying and selling bitcoins (without an ad)||Free|
|Buying and selling bitcoins (as an advertiser)||1% fee for bitcoins released from escrow|
|Sending bitcoins to another LocalBitcoins wallet||Free|
|Sending bitcoins to a third-party wallet||0.0001 to 0.0010 XBT (depends on traffic in bitcoin blockchain)|
How long will it take to send money with LocalBitcoins?
When you buy and sell bitcoins, it may take time to line up the right trade partners. Further, the time it takes to complete a purchase or sale depends on how quickly you and your trade partner can send funds to LocalBitcoins (see “How do I send or receive money through LocalBitcoins?” below).
The good news is that bitcoin transactions are usually completed within 10 to 60 minutes. That means if the money transfer process goes smoothly, you could complete an entire transfer within a few hours — maybe even within one hour.
Minimum transfer fees and available countries
There’s no minimum or maximum on how much you can transfer. Limits are set by individual buyers and sellers.
LocalBitcoins has exchangers in more than 200 countries and 14,000 cities around the world. (LocalBitcoin’s office is actually located in Helsinki, Finland.) You can trade bitcoins in over 100 currencies.
What types of transfers does LocalBitcoins support?
You can buy and sell bitcoins using dozens of payment methods, including:
- Wire transfer
- Credit card
- Amazon gift card
- Google Wallet
- Square Cash
- Western Union
There’s no set method you have to use — you can decide on which one you’ll use with your buyer or seller.
How do I send or receive money through LocalBitcoins?
To complete a money transfer through bitcoin, you’ll need to take these basic steps:
- You use fiat currency — government-issued money like US dollars, euro and yen — to buy bitcoins.
- You transfer the bitcoins to your recipient.
- Your recipient sells the bitcoins for the fiat currency of their choice.
Here’s how to do that in four steps.
1. Find a listing that sells bitcoins.
On LocalBitcoins, you can buy bitcoins online or in person. You’ll see listings on the website’s homepage with ads — click one to see how much a trader is selling bitcoins for. You can also post your own ad.
2. Transfer the funds.
When you initiate a trade, you’ll go through LocalBitcoins’ escrow process. Basically, this means that you send money to LocalBitcoins — not the seller. At the same time, your trade partner will send bitcoins to the platform.
When both you and the seller have sent the funds, LocalBitcoins will release the bitcoins to you and the money to your trade partner.
3. Send bitcoins to your recipient.
After you’ve purchased bitcoins, send them from your LocalBitcoins wallet to your recipient’s wallet.
4. Your recipient sells the bitcoins.
Finally, your recipient can sell the bitcoins on LocalBitcoins for the fiat currency of their choice.
What to look out for
- Fraud. Because LocalBitcoins is a peer-to-peer service, you’ll be exchanging money and bitcoins with other people. Be wary of deals that seem too good to be true — your instincts are probably right.
- Safety when exchanging bitcoins in person. When making in-person trades, exchange only in well-populated areas. Don’t be afraid to call off a deal if you sense that something’s wrong.
- Unusual payment methods. Avoid exchanging money with payment methods you haven’t used before. Also be careful about selling bitcoins for gift card codes, which LocalBitcoins considers a high-risk payment option.
Benefits and drawbacks
|Countries||200+ countries||May not be many sellers in some countries|
|Transfer options||Transfers can be very quick||Unlike dedicated money transfer platforms, you need to handle all transfer details yourself|
|Pickup options||Recipient can receive fiat currency through many methods||Some methods are considered high risk|
|Competitive fees||Can be much cheaper than other bitcoin and general money transfer platforms||Exchange rates can vary wildly|
|Minimum and maximum transfers||No minimums or maximums set by LocalBitcoins||Buyers and sellers may set limits|
|Convenience||Offers online trades||In-person trades can be cumbersome|
|Customer service options||Quick responses to online support tickets||No phone support|
To get started with LocalBitcoins, sign up for a free account online. Just enter a username, an email address and a password. Once approved, you can begin trading bitcoins with users in your area and around the world.
Frequently asked questions
Image source: LocalBitcoins