There is a common misconception that newer is always better. While this might be true in some cases, it doesn’t always apply to crypto. The crypto market has proven time after time that old projects remain popular. Don’t believe us? Just look at Bitcoin, Litecoin, and Ethereum!
This also applies to other types of platforms. Here at Turbo Wallet, we have reviewed many exchanges in order for you to find out which one is the best for you. All of them shine in their own way and have a loyal user base. However, very few have done more for the community than the object of this review.
Today we will be doing a LocalBitcoins review—one of the most used P2P (peer-to-peer) trading platforms in the world. We will analyze how it works, how it connects its buyers and sellers, its security, and finally, who we recommend it for.
Let’s get started!
What is LocalBitcoins?
LocalBitcoins was founded in 2012 by Nikolaus Kangas, who was their CEO for more than 5 years. However, Sebastian Sonntag took over as CEO back in 2017. Ever since its founding, LocalBitcoins has remained a household name in the crypto community.
The company is based in Helsinki, the capital of Finland, and as such, it answers to the laws of the Finnish state and the European Union.
The company acts under the rules of the Act of Virtual Currency Service Providers. This is an implementation of the European Union’s Fifth Anti-Money Laundering Directive (AMLD5). While this is quite a mouthful, you need to know this brings added security to users.
Unlike most exchanges that automatically connect their users through orders, LocalBitcoins allows you to connect with users directly.
The platform works as a marketplace where sellers can list the price at which they want to sell their crypto. The buyer then chooses which seller they want to buy from… and just does!
To ensure the safety of the platform, all users are listed by a “trust” system. As such, buyers can decide who they are going to buy from by choosing the top-rated sellers.
In short, LocalBitcoins operates like a sort of Craigslist or eBay, but with crypto.
It connects you with other users relatively close to you and offers both of you a secure platform where you can communicate to make a sale. This brings a lot of benefits we will talk about later in this LocalBitcoins review.
How Does LocalBitcoins Work?
It is important that you know how a platform works before you start depositing your money. Knowing what makes it different from the others is a crucial reason to choose it. As such, in this LocalBitcoins review, we will tell you all you need to know to make an informed decision.
Very simply, LocalBitcoins offers a sort of virtual Marketplace. Here you will be able to post in crypto how much money you want to buy or sell. Once another user is interested, you can get in contact and complete the transaction.
There are even more advanced options that will allow you to specify the value of the transaction, your location, and which payment method is more convenient for you.
Even if you are in a hurry to complete the exchange, you can advertise your offer to make it more visible. You will have to pay LocalBitcoins for the advertising and visibility of your post, but this is only if you are looking to make the trade immediately.
LocalBitcoins ensures the safety of your funds by operating as an escrow. This prevents the parties from cheating each other in an attempt to steal the other’s money. Let’s take a look at how this works.
Once you initiate a trade, the cryptocurrency will be stored in the LocalBitcoins system. Once the buyer fulfills its part of the contract, and both parties confirm everything went smoothly… LocalBitcoins will transfer the crypto. If a dispute was to arise between the parties, LocalBitcoins will mediate.
Another very important feature that we want to highlight in this LocalBitcoins review is its reputation system.
Mainly due to the fact that in e-commerce bad dealings or scams are usually quite recurrent. So after each exchange, both users will be able to review and rate each other. This tool is very useful for future users to know if they can trust an offer.
What Cryptocurrencies Does LocalBitcoins Support?
As the name suggests, LocalBitcoins only accepts Bitcoin. Although you may see it as a negative thing, it’s really not. Bitcoin is the most popular and requested cryptocurrency, after all.
If the platform were to provide support for more cryptocurrencies, the system would become overly complicated. This has proven to be the case with P2P markets, which in turn makes the user experience unnecessarily bad.
However, if you want to trade other cryptos, you can try their twin platforms LocalEthereum and LocalMonero… Or one of the other cryptocurrency exchanges we have reviewed!
Does LocalBitcoins Charge Any Fees?
The truth is that LocalBitcoins is one of the best fee-free platforms we have seen. The platform doesn’t charge money to download it nor to register…they don’t even charge for making trades. It’s completely free if you are a buyer.
You’re probably wondering “where does the company get money from?” Well, the answer is quite simple: It charges 1% of the trades made to users who choose to advertise their offer.
The only fee you will have to pay is when you make a transfer outside of LocalBitcoin, as you will have to pay the Bitcoin Network fees for using the blockchain. This is standard to all exchanges, as network fees are a necessary part of crypto.
Which Countries Are Supported by LocalBitcoins?
We said earlier in this LocalBitcoins review that this is the oldest Bitcoin exchange out there. Well, this has allowed it to become truly global!
While there are other exchanges that claim to offer a global service…They really aren’t! Due to the laws of where the exchanges are located, most of them are forbidden to trade in some countries. These generally include North Korea, Venezuela, Bolivia, Ecuador, Thailand, and Pakistan.
In this aspect, LocalBitcoins is a truly universal exchange! If you can access it, you can use it!
Does LocalBitcoins Offer Good Customer Support?
We always consider this section very important, which is why we put a lot of emphasis on it. This LocalBitcoins review will be no exception. Let’s be clear from the start, LocalBitcoins is not the best exchange in terms of customer service. Don’t get us wrong; it is acceptable, just not great.
When using LocalBitcoins, you won’t have any problems with the customer service as long as you understand and accept the conditions.
The response time can take some days, which is not the best when you are worried about your crypto. That being said, every inquiry will get a response from the exchange’s customer service team.
A great aspect of LocalBitcoins in terms of customer service is its FAQ section. It is quite complete and offers guides on how the platform works. You will also be told what considerations to take when choosing who to contact!
As for contact options, you can only communicate with them via email. This offers the advantage that you can be very detailed and extensive about your problems at the cost of speed.
So in this LocalBitcoins review, we consider that although the customer support could be improved, it is currently quite acceptable, and you should not have any kind of problem.
What Features Does LocalBitcoins Offer?
In addition to offering a great system for transfers between users, we want to highlight one of its other features: An internal wallet system so that you can store your BTC conveniently.
This means you won’t have to waste money on fees moving your crypto from your wallet to the platform and back to your wallet.
Everything will be kept inside the platform to ensure your complete convenience and save you from those annoying fees.
However, we only recommend using this wallet in the short term. You should use a third-party wallet if you are holding! Maybe check some of our wallet reviews?
As we said earlier in this LocalBitcoins review, this platform is pretty straightforward. This means there are no more features for us to cover!
Is LocalBitcoins Secure?
We believe that this is undoubtedly the most important point of any review, and even more so in this case. The truth is that in P2P marketplaces, there will always be people trying to scam.
Unfortunately, this is something very difficult to control for a platform, even big names like Binance are suffering from it. This could be very negative for any exchange that works this way, but with LocalBitcoins, this is not the case.
The platform has developed an exemplary security system for all users. By giving their users the ability to rate themselves on a reputation system, identifying scammers is super easy. This is because no one in their right mind would trade big sums of money with a trader with a low reputation… And low-value transactions are not worth scamming for.
As you can choose who to trade with, the smart thing to do is to trade with the highest-rated people on the platform. This ensures the security of your money and crypto at all times.
As dealing with anonymous people is always dangerous, this reputation system offers you guarantees that you know who you are trading with is someone you can trust.
LocalBitcoins have even designed a way to categorize their users according to the personal data or proof of security you provide. The more they can trust you, the better profits you will make.
These categories are distributed as follows:
- T0: To register, you must provide your name, country where you live, email address, and phone number. By providing this data, you will be able to trade up to €1,000 per year.
- T1: To reach the next verification level, you will need to provide information about where you live, your ID, and pass a KYC test. Once you pass this level of verification, you will be able to trade up to €20,000 per year.
- T2: To get here, you will have to add to the previous information some proof of residence documentation. This is to confirm that you live in the country and the address you declared before. Now the limit scales up to €200,000 per year.
- T3: The last level of verification only requires you to add another ID different from the one you gave before. It is a fairly simple step that frees you to trade without any limits. So we recommend you to access this level of verification to be considered a reliable user for others.
As you can see, LocalBitcoins takes several steps to ensure the security of its platform. After all, trading crypto shouldn’t be a troublesome affair.
Considering all the points we have seen in this LocalBitcoins review, we cannot do anything else but recommend this exchange. If you are investing in Bitcoin, we believe you should go and try LocalBitcoin right now.
Some of the reasons for LocalBitcoin success are that its P2P exchange idea is excellent and perfectly executed. In addition to this, the reputation mechanic itself is an almost infallible security measure if used correctly. It is only up to the user to decide to trust another person, and they provide you with all the data you need to know if you can trust each other.
The exchange limits for the verification categories are logical, and the information is not at all invasive. The fees are so exclusive that it is very likely that if you don’t want to pay them, you won’t ever have to. And in case you do, it is only 1%, which is way lower than those of other platforms.
The platform’s simplicity also ensures it can be used by traders who are just beginning the crypto journey.
The only “negative” we can think of is its lack of support for other currencies. LocalBitcoins’ approach is so straightforward yet so effective that it should be available for every coin. We would love nothing more than to see a version of the platform for all major currencies!
All in all, LocalBitcoins is entirely deserving of its reputation. That being said, we are aware it might not be what some users are looking for, especially altcoin lovers. As such, we also offer other exchange reviews you can check by clicking here.
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