It is common to trade cryptocurrencies through digital exchanges like Luno and SINERGY. Alternatively, you can now trade bitcoin through peer-to-peer platforms like LocalBitcoins.com and Localcryptos.com where it becomes possible for you to exchange your currency into bitcoins as other functions.
Trade with peace of mind
LocalBitcoins function as a marketplace that allows people to trade Bitcoin with each other. Users are allowed to advertise their own manner of trading. This could include advertising on how payment can be made as well as the current exchange rates to attract other traders. What this will do is that once a trader response to an ad, the chat is activated and this will invoke automated escrow protection. What happens here is that the bitcoins are protected until payment is completed which will then require the release of the bitcoins. Besides that, you will have your own LocalBitcoins digital wallet to manage your Bitcoins.
Another popular platform that offers a peer-to-peer marketplace for cryptos is LocalCryptos. Basically, the functions and processes are similar where the meeting of buyers and sellers are facilitated. LocalCryptos was formerly known as LocalEthereum where they changed the name back in November 2019. Before that, it was started as the first Ethereum trading peer-to-peer marketplace which has now been extended for Bitcoin and other cryptos.
Trading on these platforms
One of the major reasons why peer-to-peer platforms are preferred is because you will be trading with other traders and not through an automated or centralized platform. In the past few years, several cases involving loss of funds have been reported in centralized networks. In 2019, it was reported that some US$4 billion was lost through these exchanges. There was also a report of identity theft when passport scans of users were lost and then sold on the dark web.
Using a peer-to-peer platform is easy and straightforward.
- First, you need to create an account on the exchange. LocalCryptos allow you to sign up with your own Ethereum wallet (if you have one).
- Next, you can browse through the listing of who is buying or selling. Any user can post an ad on the selling price and other information. You just need to identify who and what you want to buy. This search can be filtered through a type of currency, location and payment methods, among others.
- Once you have identified who you want to buy from, you will then open a trade where you will select the amount you want to trade-in. Then, you will lock in the price which will send a notification to the trader.
- When the seller accepts your offer, the agreed amount of the crypto will then be put into escrow. You will then pay the seller through the agreed payment method.
- This is important! The escrow account is a decentralized platform that will hold the crypto until the transaction is done.
- The seller will then confirm receipt of payment and then the crypto is subsequently released to you.
Take Note: LocalBitcoins charge 1% for every completed trade. LocalCryptos charges 0.25% for every offer you post and 0.75% when you respond each time.
Pointers when trading
When you trade on peer-to-peer platforms, there are several practices and issues that you need to take into consideration to protect yourself and be fair to everyone.
- Sellers will require your registered mobile number for verification as they want to deal with a legitimate buyer. Some might call you on video.
- If you transact using cash deposits, you will be required to send the receipt to them.
- Every transaction takes an average of 20 to 30 minutes depending on the block time.
- For sellers, be cautious when dealing and ensure that you are trading with legitimate buyers.
- Beware of unscrupulous buyers who might trade with you and report that the money was actually stolen. This could compromise your cryptos which can be subjected to investigation for fraud.
- In your ads, never reveal your bank account information until the buyer confirms the transaction.
