Buying and selling bitcoins online on localBitcoins

Buying and selling bitcoins online on localBitcoins Why to trade bitcoins online on LocalBitcoins.com? LocalBitcoins trade happens person-to-person, also known as over-the-counter (OTC) trade. People like to buy and sell bitcoins OTC because it allows fast transactions and more diverse payment options. Centralized exchanges are often slow, so selling directly to the users of same bank or payment provider makes the money move faster. The wide variety of payment methods enables wider audience to access the bitcoin trade. If you want to buy or sell large amounts of bitcoins, a good strategy would be to trade the bitcoins directly in p2p-fashion, offering diverse set of payment methods. You can use some more intelligent pricing using the localbitcoins pricing formula system. You can also be a "liquidity provider" on localbitcoins by setting up your own online buy/sell advertisements. This means that you offer speedy cash out or buy-in to the people who need it, and make profit in the process. Some people make their living this way, and you can too. Benefits Protection for both the seller and buyer: seller can't run with bitcoins after payment, seller can hold the bitcoins in escrow until the payment is cleared. Automated process for the seller Quick and easy way to trade bitcoins Reputation system for finding and filtering trustworthy traders Buying bitcoins online with escrow First, find an advertisement which is selling with your desired payment method. Then create a request, and you will receive payment instructions. When you have paid the invoice, push the "payment paid" button and wait when the seller spots the payment. Usually the process takes only 10 minutes. There are some amount trading limits which depend on your reputation. The more you use the site, the bigger deals you are able to execute. Note that the payment has to be initiated withing 60 minutes from the start of the request. Selling bitcoins via escrow If you plan to sell bitcoins online, please do the necessary risk assesment. Some traditional online payment methods have very high rate of fraud. Basic risk assesments to do before selling online Check your local legistlation about when you are required to identify your customer. Typically this applies to sums over 3000€-15000€ depending the country Ask your bank to stop accepting payment orders with mail. This is to ensure that your banking details cannot be misused. If the buyer has recently created account and has small amount of confirmed trades, you should consider requiring additional information about the buyer, especially if the trade sum is relatively big. If you receive unauthorized payments to your account, your bank might freeze your account. Consider creating another bank account primarily to bitcoin trading if you are planning to sell internationally. Currently the escrow service is only enabled for advertisements selling bitcoins, and the seller has to have the bitcoins in the localbitcoins wallet before selling them. Only suitable currently for online transfers - 90 minutes payment window for buyers! Not suitable for cash deposits, which require usually bigger payments windows. Bitcoins need to be in the localbitcoins wallet before they can be sold. Minimum sellable amount is 1 BTC Setting up advertisements First of all, you should carefully consider what payment methods you are going to provide. Very good start is to advertise payments with specific bank. People are usually willing to pay extra, when: You can offer quick and convenient payments. You can offer support with your local language. People feel safe when they see familiar bank name and advertisement with their local language. It is easier to identify the legitimacy of the customer if you live relatively close. To set up an advertisement with specific bank, choose "Transfers with specific bank" from Payment method listing. See an example screenshot below: Then the bitcoin buyer would see following invoice: Method: Fairyland Bank Plc My bank number: 123456789-12345 Bank Bic: FAIRY Amount: 50 EUR Reference/message: L367Ba7 The reference/message is automatically generated, and is unique for each deal. It helps you to separate the different payments. Just check when you have received the payment to your account, and release the escrow with the same reference. Note that with the escrow service, you have to have bitcoins in your wallet before an user can make a purchase. Newbie buyers have some amount restrictions. How escrow service differs from the transaction service? The LocalBitcoins. transaction service is designed for face-to-face physical transactions. With these deals, agreements and timetables often change, therefore the deals have to be cancelable. The transaction feature suits also other types of deals, which are not very straightforward. With the escrow service, the buyer has more protection, therefore it is more suitable for electronic deals where no face to face meeting is done. This includes bank transfers and other electronic payment methods. Also the process is designed to be extra easy and fast for both the buyers and sellers. Risks with traditional payment methods Many transfer methods are reversible, such as paypal and credit card payments within 60 to 90 days. It is very inadvisable to use these methods for receiving payments. Research the transfer method you are going to use before you start accepting it. Bank transfers are safer than paypal and credit cards, but even them can be reversed by the banks. Verify the user Always check the reputation of the buyer from the profile. If there is suspicion that the sender of the money might be using a stolen bank account for example, it never hurts to wait a bit, and ask for additional validation like phone call, facebook message or even picture from phone bill or ID, if in doubt. You can call the bank to verify the buyer, or ask to conduct an physical cash exchange first. Recommended reading: The May Scale of Money Hardness and BitCoin Scams and fraudulent activity There are lots of fraudulent activity happening in the bitcoin trading community. Most of the scams we have heard of rely on social engineering and simple tricks. Some rules of thumb: Don't open any links that the counterparty is sending to you. If you must, use different browser than the one you are using. Don't do any actions based on the emails only, or on the information that the counterparty provides you. On the browser you are trading on, don't visit other sites than https://localbitcoins.com/?ch=jwa Open different browser for other sites. On principle, don't trust anyone anonymous. If the buyer is paying with wrong reference message, the seller is not obligated to release the bitcoins. There have been cases where the buyer has tricked someone else to pay his/her invoice. Terms & conditions Buyer must initiate and mark the payment within an hour, otherwise the purchase will auto-cancel. LocalBitcoins staff handles disputes based on evidence and reputation supplied by trade participants. Disputes can be filed after 48 hours after payment is marked complete. If buyer has zero feedback and is not responding to messages after the initial contact, escrows may be reversed faster (within 6 hours). Fee is 1% for the advertiser on succesful trades. If the buyer cancels the deal, no fees. Limits apply how much you can use the escrow feature - first timers are only able to purchase maximum of certain amount etc. These are automatically enforced. Any kind of irresponsible behaviour will result in negative reputation. Please behave in a good & professional way. After the escrow has been released by the seller, the trade will be considered finished by localbitcoins, and cannot be disputed. When sellers turn unresponsive, we can release the bitcoins to buyer after 4 days of unresponsiveness. If the advertising buyers are unresponsive for 6 hours after request, the escrow can be reversed by us. Please be patient if you are a first timer. There is lots of fraudulent behaviour in the bitcoin trading community, and therefore traders have to be extra cautious. Also note that our current policy is that escrows are never reversed automatically. Each case is researched manually. Happy trading!