LocalBitcoins is the leading platform for peer-to-peer Bitcoin trading. Traders using LocalBitcoins can exchange their local currencies directly with other users for Bitcoins and vice versa.
While popular, LocalBitcoins is not always the ideal solution for everyone. While offering peer-to-peer trading LocalBitcoins is also centralised. Alternative peer-to-peers sites offer decentralised trading which offers security and privacy benefits. Centralized platforms have also in the past been vulnerable to hacking and create a single point of failure.
Below we’ll look at some of the most popular alternatives to LocalBitcoins.
Paxful works very similarly to LocalBitcoins. To use Paxful simply choose the amount of Bitcoins that you want to purchase and your desired payment method. You will then be shown the available sellers for your trade. As with LocalBitcoins you can see that sellers past transaction. This enables you to measure how reliable a seller the are.
Once you have chosen a vendor you click on the “trade” button. You will then be taken to a trade page where you can use live chat to discuss your trade with the seller. The seller will provide payment instructions. Once you have completed these you simply mark the trade as paid. Once verified by the seller the Bitcoins are released into your Paxful waller.
Paxful doesn’t charge any fees on the buyer. Instead it charges a 1% fee on the total sale to the seller. Keep in mind that these fees are typically worked into the interest rate charged by the seller. Paxful supports are range of different payment methods including bank transfers, cash deposit, debit / red cards, gift cards and e-Wallet balances, Paypal and Western Union / Monogram.
BitSquare (aka Bisq) provides a fully decentralized alternative to LocalBitcoins. Bisq isn’t actually a company but rather an open source project organised as a Decentralised Autonomous Organisation (DAO)
Bisq does not hold any Bitcoins, rather Bitcoins are held in multi signature wallets. Bisq also doesn’t have retain any national currency. All national currencies are transferred directly between traders. In terms of security Bisq uses a peer-to-peer network over Tor.
This means that there are no centralised servers to be hacked. Bisq offers secure privacy as it does not know the identities of the traders and no data is stored about who is trading with whom. In addition in order to use Bisq you do not need to register an account or be approved.
LibertyX provides a network of stores where you can purchase Bitcoins. The process of purchasing Bitcoins using LibertyX is relatively simple. You enter your location using either the LibertyX website or app.
You will then be shown the stores which are located most closely to you. You visit the store and pay the cashier in cash . Bitcoin will then be sent instantly to your desired address. LibertyX charges a flat rate fee for cash to bitcoin transactions. On top of this may be fees charged by the stores. These fees vary depending on the specific store. In the LibertyX network there are two types of stores variable and PINs / Gift Card, With variable stores you can purchase any amount of Bitcoin up to your daily limit.
With PINs / Gift card you buy a PIN card with a fixed dollar amount. Verification of identity is required in order to purchase Bitcoin using LibertyX. I order to purchase up to $200 Bitcoin per day you will need to provide a verified phone number. In order to purchase up to $1000 Bitcoin a day you will need to have a verified identity. Verified identity requires providing documentation such as a driver licence.
BitQuick connects buyers and sellers of Bitcoin. Using the BitQuick platform you can purchase Bitcoin using either cash or SEPA transfer. The basic process involves first buyer depositing the cash into the seller’s account. The buyer then sends an image of the deposit receipt to BitQuick. The Bitcoins are then transferred to the Buyer.
Coinffeine is a decentralised Bitcoin exchange. Confine offers users of the platform the ability to buy and sell Bitcoins anonymously. The developers of Coinffeine describe the platform as being like “BitTorrent for your bitcoins”.
Coinffeine is an open source project meaning that anyone can check the code to verify that it is trustworthy. They also accept patches and bug reports from their community.
Another advantage of Coinffeine is that you can receive Bitcoins directly to your wallet. Local currency can be paid directly into your payment processors account. Payment is made as soon as the exchange is complete.
Remitano is a newer entrant to the P2P Bitcoin exchange field. Operating out of the Seychelles it provides an escrowed P2P Bitcoin marketplace. One nice feature of the Remitano is the live chat feature and a lower fee structure compared to many exchanges.