Back in 2014, there were very few exchanges supporting local currencies. And that is when I discovered Localbitcoins.com. Today, Localbitcoins is one of the largest P2P Bitcoin trading platform on the web.
There are more than a million registered users from 240+ countries transacting regularly. And this regular transaction has led to several fraudulent activities.
There have been scams, stolen IDs, and bad sellers on the platform. That is why the first-time buyer is always wondering:
How safe is Localbitcoins?
It Is As Safe As You Want It To Be
What does it mean?
If you are not careful, you will be scammed. You will lose your money. And you won’t get your Bitcoins. It is not just the buyers — even the sellers are taken for a ride.
Take this post as an example in which the buyer chargedback the seller through PayPal:
The end result? Seller had to file a dispute. It is a lenghty and heart-breaking process for a seller.
For the buyer, however, the process to purchase Bitcoins through Localbitcoin is fairly easy when certain rules are followed.
These aren’t my rules. But rules I have picked up through several Localbitcoin sellers because they know it better — they know the system in and out.
And if you remember these rules, you will be able to complete your purchases — as a buyer — quickly and easily without getting scammed.
4 Golden Rules For Buyers
Rule #1: Price is secondary
As a buyer, you should NOT focus on the price. Sure, price is important. But it isn’t the only factor to focus on.
Because you will find lots of sellers offering Bitcoins for a dirt-cheap price. At first, you will be tempted to get discounted Bitcoins.
But the reality is different because:
If it seems too good to be true, then it is too good to be true.
So make sure your buying decision isn’t solely based on the price. Which brings us to the second rule:
Rule #2: Pick Trusted Sellers
As a first-time buyer, always get your Bitcoins from Localbitcoins through trusted sellers who have been around for some time now.
How to find them?
Analyze their profile. Like a detective.
For example, here is a profile of a Localbitcoin seller. You can see the trade volume, the number of confirmed trades (transactions), feedback score and so on.
Ask yourself these three questions when you are selecting a seller:
- What are the confirmed trades of this seller?
Anything above 50 is good.
- How good is the feedback score of this seller?
100% is the best.
- Is this seller verified?
Make sure his email, phone number, and ID / password / driver’s license is verified.
Rule #3: Invest Small
Once you are comfortable with the details, trade small. Do a tiny transaction to get a better understanding of the platform — and how it works.
You can always contact the seller — take to them over WhatsApp, phone, or Skype — and even request for an identity verification.
Or meet them in person.
Any time you feel comfortable, or you are suspicious of the seller? Go with your instinct and pick a different seller.
Make sure you take one step at a time. This is to get a better understanding of the Localbitcoins platform and the seller.
More Safety Measures:
- If you are trading online, then make the payment, take a screenshot and save it as your proof of payment.
- Localbitcoins wallet system is available to protect you, so never trade outside of the platform. You can meet the seller but always follow the Localbitcoins guide for safer transaction.
- Loclabitcoins has a verification system for sellers (and even buyers). Always look for those green tick boxes (meaning the account is verified) before initiating a transaction.