When we think of or talk about buying Bitcoins in the present day, the first thought that most inevitably comes to our head is to go to a Bitcoin broker or trading platform. However, as has been proved time and again, these exchanges are lacking in some surprisingly necessary areas like strict payment methods or georestriction. Whether it’s due to lack of foresight about the unprecedented acceptance of the coin or lack of careful thought about the people who would most constitute their customer base, one cannot say. However, their blunders have created surprisingly effective opportunities for smart startups to fill the chasm left by their inadequate services. The creation of platforms referred to as “the eBay of buying Bitcoins”. Widespread networks of Bitcoin sellers all over the world which allows anyone to purchase bitcoins whenever they like without the restriction of location or proper banking facilities. There are actually two platforms that perform this service today and they are Paxful and Local Bitcoins.
Stripped down to the basics, the two platforms are actually quite similar. You choose the amount of bitcoins you want to buy, select a payment method and you look through the list of available sellers and pick the one you want. You make your decision based on the reputation the seller has garnered from their past sales and of course, their exchange rate.
The exchange rates on these platforms than on the regulated platforms as the sellers are facing more risks. The irreversibility of bitcoin transactions makes it possible and quite easy for a seller to find himself with no money and no bitcoins after supposedly making a trade. Some also accept some less conventional methods such as gift cards, voucher codes and so on, and they charge more for these.
To start buying bitcoins with Paxful is a quite simple process. You just log onto the site, select the amount of bitcoins you want to buy, select your the currency you want the exchange rate to be in, select your payment method and you are good to go. You are now presented a chance to go through the list of eligible sellers based on relevant criteria and then you can select the one you want.
Once you select a seller, you are redirected to a “trade” page where you can communicate with the seller directly in an online live chat and then the two of you can fully thrash out the terms of the trade before the trade is made. The seller gives payment instructions once the terms are sorted and the buyer can make the payment. The seller then releases the bitcoins into the buyers wallet once the payment is confirmed. All trades are supposedly instantaneous but a number of factors can delay a trade, such as the payment method, the availability of the seller( the seller might not be online). A number of the unconventional modes of payment take some time before the payment can be confirmed.
As soon as a trade starts however, the bitcoins are released into an escrow on Paxful and the trade is out of the sellers hand at this point. Only the buyer can cancel the trade once it is at this point, and if this happens, the coins are returned to the sellers wallet. If the buyer also does not complete payment and mark the payment as completed within the given time frame, the trade is auto-cancelled and the coins are returned. Otherwise, the trade goes through.
One of the supposedly good things about Paxful is that no transaction fees are collected from you as the buyer. Only 1% of the total sale amount is collected from the seller. Its not quite right to say there are no transaction fees however, as the sellers will most definitely fix their fees into their exchange rates.
Now to ask a potent question: is Paxful a scam?
I say no. Paxful is a very much legit bitcoin selling platform. However, as with every other online platform involving money or money related items, there are people on Paxful who will try to scam you of your money. This can hardly be said to be the fault of the platform though. They can only do so much in verifying their sellers and the integrity of the seller is not the same as that of the platform.
Here are some cautious actions to take when trying to buy bitcoins on Paxful though;
- Log in to the online forum and ask questions about whatsoever is bothering you about the platform before proceed ing to make trades. You’ll get a lot of very useful answers from people who are regular users of the platform.
- As a seller, do not release your coins from escrow until you are absolutely certain that the payment you’ve received is your and cannot be reversed in any way.
- Most importantly, never send money you cannot afford to lose.
To conclude, both Paxful and local Bitcoins are really good platforms with similar services. Local Bitcoins has been around for longer though and has a better reputation. But in the end, it is the sellers and buyers that determine all. If you get a seller that supplies your needs perfectly on either of the platforms, then use it. Beyond that, everything else is just embellishment.