We are at the stage when buying or selling bitcoin is now as common as any other daily business transaction. And there are several methods of going about selling or buying BTC, including via online exchanges. Here you can use your credit card, bank account or PayPal as payment methods. However, buying or selling Bitcoins person-to-person is one of the easiest and fastest ways to complete a bitcoin trade.
You can sell/buy from family and close friends
You can buy or sell bitcoins directly to or from your family and friends. It can be done anywhere and at any time. All you need is to have their public keys to send/ receive the bitcoins. In this case, the transaction will simply involve you transferring the coins to their wallets and them paying you either in cash or mobile money or even through a deposit to your bank account.
Using a peer-to-peer exchange
However, in case the person you are to sell or buy from is not your close family or friend, then the next best place to complete a person-to-person transaction is via a peer-to-peer exchange. There are a number of very popular sites like LocalBitcoins, Paxful, and BitQuick that allow you to connect to buyers or sellers for p2p trades.
Before we go into the nitty-gritty of how this is possible, it is important to note that bitcoin, and indeed all cryptocurrencies, attract a lot of interest due to the value attached to them. As such, we are inclined to ask whether it is really safe to buy/sell Bitcoins to or from individuals without an intermediary like a trading exchange like Coinbase.
So, is it safe to buy/sell bitcoins to or from individuals?
The short of this is that it is safe or should be most of the time. The long of it is what I know you are thinking of: sometimes things go wrong, and thus what looked to be safe actually turns out to be very unsafe. It all boils down to what happens and sometimes “how” it happens. The best thing to remember is that trading bitcoin needs a little bit more caution due to two things.
First, Bitcoin transactions are irreversible. Once the transaction has been “logged” onto the blockchain, it’s final. You cannot reverse it. so, in case of a deal gone south, you may have no other way of retracting it, say like what a bank could do.
Secondly, Bitcoin is unregulated. Nobody controls bitcoin and to simplify this, there is very little you can do in case of losing your bitcoin or cash. Of course, you can seek help from the local police if you happen to know the individual you transacted with. But if it isn’t possible to locate the individual, very little legal recourse will come your way.
Should we still say that buying or selling bitcoin to individuals is safe? I’d say 95 percent of the time you’ll be safe. It’s that five percent grey area that you need to have covered as you transact face-to-face or over p2p sites. In short, the first line of defense against the possibility of being conned is you. What should you do? Be cautious and know that trust isn’t written on the face or in the words of that prospective buyer or seller.
Why is buying/selling bitcoin to individuals via an exchange safe?
Sites that provide avenues for sellers and buyers to connect and transact bitcoin are pretty much safe for you. On a site like Localbitcoins, you will get a chance to identify and select a buyer or seller before initiating a sell/buy order.
Once you create an account on the site, you will access several potential buyers/sellers. You can look at their history or transaction feedback to ascertain their credibility. A poor history or claims of insincerity should tell you that the individual is probably a con.
The site will also provide escrow services that help to ensure you get your bitcoin once the seller confirms that they have received money in their account. In the event a dispute arises, the Localbitcoins support staff should be able to assist you follow up the matter, especially if the transaction isn’t completed on either side.
Can you be scammed on Localbitcoins?
You bet it can happen, as it has happened before. There have been cases where sellers or buyers have fallen prey to a localbitcoins scam. Most of the cases involve sellers releasing bitcoins to buyers before confirming that funds have been sent to their accounts. A few cases involve accounts being suspended by the LocalBitcoins staff. The latter has made some people refer to the site as a scam. However, despite the fact that these cases put into question the reputation of the site, it is still one of the popular platforms to safely sell/buy bitcoin from individuals.
How to ensure you stay safe when buying/selling bitcoin to people
Make sure you use the site to complete the deal due to its escrow services and possible help when disputes arise. Again, do not agree to meet offline for the deal to be completed. If you must, be sure to know the location and let it be an open space.
Most of the threats you face when using LocalBitcoins originate from phishing attacks. You’d, therefore, need to be careful with your account to stay safe. Do the following to keep attackers who may prey on your personal information.
- Always ensure your account settings have the Login Guard enabled. Turn it on from your account’s security settings.
- Enable 2Factor Authentication for your account. The second layer provides additional security in case your email/passwords are compromised. It’s also good to have unique passwords for every online account you visit.
- Do not use one email address for all your online activity. It’s best for the LocalBitcoins account to have its own email.
Do not fall for files, images or links sent to your inbox- they may be infected with identity-stealing malware.
It is a question many people ask and will continue to ask, and that is whether it is safe to buy/sell bitcoins to individuals. While it may not be conclusive, the answer is that is that it is safe most of the time. But before you initiate that transaction, do your due diligence and gather as much as you can about the buyer or seller. Furthermore, read about cyber security and how to keep your accounts secure. Also, ensure you keep your bitcoin in an offline wallet for additional safety.