By Nathan Ferguson
Buying Bitcoin on LocalBitcoins
Bitcoin has become an attractive investment and for good reason. Last year, it gained over 300%, closing the year as the best performing asset. It also started the new year 2021 with a very strong performance and rose quickly to hit the new all-time high of $60,000. Analysts project that the asset still has potential for a better performance in the future.
Because of the rising demands for Bitcoin, there are new exchanges coming up every day that allow investors to buy. One of the best places to buy the asset is on LocalBitcoins, an online Peer-to-Peer (P2P) exchange for buying and selling Bitcoin and other assets. It is also one of the easiest ways to buy Bitcoin from any part of the world. This guide will show you how to go about buying Bitcoin on this P2P platform.
What is a Peer-to-Peer exchange?
P2P exchange is a platform that allows users to buy digital assets (in this case Bitcoin) directly from one user to the other. P2P trades do not require a third party to complete. Rather, the buyer and seller trade directly with fiat money for cryptocurrency. Although there are exchanges such as Binance that provide P2P trading services, LocalBitcoins is one of the leading standalone P2P platforms in the industry.
The best thing about P2P exchanges is that they allow you to buy Bitcoin with your local currency. This is because the trade is between you and other people in the same country as you. The process is therefore much easier than buying on traditional exchanges where your local currencies may not be supported.
Fees on LocalBitcoins
If you are trying to buy Bitcoin, it is only natural to be concerned about fees. Well, the good news is that LocalBitcoins does not charge any fees to buy or sell Bitcoin. All such transactions are completely free of charge. However, makers are charged a 1% fee on every completed transaction. Transaction fees are however charged if after buying Bitcoin, you decide to send it to an external wallet. The fee will depend on the blockchain congestion at the time of the transaction.
How to Buy Bitcoin: Step-by-Step Guide
- Create an account: The very first step to take when buying Bitcoin on LocalBitcoins is to create an account. After creating the account simply with your email address and password, you will be required to complete a KYC verification process. Details such as ID verification and proof of residence will be required.
- Get a wallet: After registering and completing KYC verification, you need to get a wallet. This step is only necessary if you are absolutely new to crypto with no existing wallet. There are several wallets available out there, but be careful to choose a safe and secure one. If you wish to buy a large amount of Bitcoin, it is advisable that you get a cold wallet. This enables you to safely store your Bitcoin offline, reducing the chance of hackers stealing it. This step or the registration can come first, it doesn’t matter.
- Buy: This is the stage where you do the actual buying. It is important that you choose a payment method at this stage. This is the method you want to use to make payment for the Bitcoin you want to buy. The good thing about LocalBitcoins is that it offers its users a wide range of such payment methods. Top ones include Cash Deposit, Bank Transfer, mobile Money and Paypal. Once you have decided on which payment method to use, you are ready to buy.
Proceed to the main page to search for advertisements. There are users who want to sell Bitcoin, so they place adverts for people like you to buy. In the search box, fill in the amount you wish to buy Bitcoin with and the currency. This is usually set automatically. You can also choose which offers to view depending on the payment method you prefer. In the picture below, it shows that the buyer is interested in all available advertisements.
Select an offer that suits you. Factors to consider include the price at which the Bitcoin is offered and the payment method. You should also consider the reputation factor of the seller by looking at the rating against their name. If you like the offer, select it by clicking the “Buy” button. The terms of the seller and other information will be displayed. If you like the terms, type the amount to buy in the blue box shown in the picture below.
You can type in your local currency or Bitcoin and the other figure is set automatically. Next, get ready to pay and click on the “Accept Terms and Send Trade Request” button. You will then see an invoice stating the amount to pay and the chosen payment method. The invoice includes a reference message that you will quote for the seller to identify that it is you when you make the payment. Also, type a message for the seller in the invoice shown in the picture below. This includes a request for payment details to send the funds to.
Once you send payment, click on the blue “I have paid” button to the right. You have a window period to do this which varies with the method of payment and the terms of the seller. Once the seller confirms that he has received the funds, he will release the Bitcoin to your LocalBitcoins wallet. You can then transfer your Bitcoin to the external wallet for safe keeping because Bitcoin on LocalBitcoins or any other exchange is not under your control and anything can happen to it.
What if something goes wrong?
Conflicts hardly arise on P2P marketplaces. However if they do arise such as the seller not releasing the Bitcoin after receiving payment, you can appeal and tender evidence of payment. If the marketplace confirms that the seller did receive payment, they will release the Bitcoin to you because the funds are held in an escrow wallet immediately you mark the transaction as paid. But this is hardly ever the case, so you have no reason to fear and you can go ahead and buy Bitcoin on LocalBitcoins now.