LocalBitcoins Review – A Beginner’s Guide

February 2023 update:
After 10 years of activity, LocalBitcoins has announced it is shutting down its services. According to the company’s statement, the decision had to be made due to harsh market conditions.

The review below is kept for historical purposes only. Read our LocalCoinSwap or Paxful reviews to learn more about active P2P exchange platforms. Below we also take you on a tour of the best alternatives to LocalBitcoins currently available in the market. The one that ticks all the boxes is, without a doubt, Best Wallet, but we’ve also supplied you with another 9 options, just in case this handy non-custodial tool doesn’t serve your specific trading needs.

LocalBitcoins was a peer-to-peer (p2p) marketplace that allowed buyers and sellers to directly communicate and trade Bitcoins. This post looks at its key features and also dispenses some tips about other tools you can use in its stead.

LocalBitcoins Overview

LocalBitcoins was founded in 2012 in Finland by Nikolaus Kangas and grew to become one of the leading marketplaces for Bitcoin in the world without any outside investment.

This brand offered a platform for sellers and buyers from around the world to meet and trade Bitcoins. It was tantamount to the Craigslist for buying and selling Bitcoin.

Secure trading

LocalBitcoins allowed for secure trading through the use of several measures:

• Reputation system – Each trader had a reputation rank and also public history records showing their past activities.
• Escrow – When you requested a trade, the traded Bitcoins were held on LocalBitcoins’ escrow service. The Bitcoins were released only after the seller confirmed the trade was completed.
• 2FA (optional) – Whenever you logged into your account you were required to enter an additional PIN code sent to your mobile phone. This prevented people from hacking into your account. This option was not enabled by default.
• Login guard – LocalBitcoins was also able to verify you are always logging in from the same browser. If a login from a different browser occurred, an email verification was required.
• Support and conflict resolution – LocalBitcoins had a support team ready to answer user questions and also resolve conflicts between buyers and sellers in case it happens.
• Buying Bitcoin anonymously

Until recently, LocalBitcoins acted as one of the main places you could still buy Bitcoins anonymously. However, you can now sign up without the annoyance of KYC – wholly or in part – with some of the brands we recommend further down, such as Best Wallet, MEXC, AlphaX, Changelly and Margex.

Currencies and Payment Methods

LocalBitcoins supported the buying and selling of only Bitcoins, whereas platforms such as Best Wallet, Binance, Kraken and Coinbase offer multiple crypto trading possibilities.

There were no official fiat currencies that LocalBitcoins supported, since the site itself didn’t hold fiat deposits.

Users on the site accepted a wide array of payment options including but not limited to:

• Paypal
• Wire transfer
• SEPA
• Neteller
• MoneyGram
• Skrill
• Cash deposits
• Payoneer
• Payza
• WeChat

The specific available payment methods were determined by the user you would be buying from / selling to. Since you were buying and selling to individuals, you weren’t able to use a credit card. A number of currently operating exchange platforms have addressed this issue, with the result that sites such as Coinbase and Changelly offer this possibility.

Keep in mind that different payment methods will result in different exchange rates, since some methods are riskier than others and the buyer/seller will need an “insurance” against possible fraud.

Because of this, you usually got the best price for buying Bitcoins using an irreversible payment method such as cash deposits or wire transfers. On the other hand, these were – and still are – also the riskiest way of paying.

LocalBitcoins Fees

Registering, buying and selling Bitcoins on LocalBitcoins was completely free. LocalBitcoins users who created advertisements were charged a 1% fee for every completed trade. On the other hand, fees on the sites you can subscribe to instead of LocalBitcoins vary widely according to the kind of service you’re using. BestWallet is the top option to consider here for its lack of trading fees. Similar sites in this regard include OKX, MEXC, and Binance.

It’s important to be aware of the fact that some brands charge fees in specific situations, such as higher costs levelled on the Instant Buy function on Kraken, or the fact that Changelly charges loftier prices for trades in fiat.

Countries Supported

LocalBitcoins was available worldwide, with seller listings from 248 countries. However, it did not provide services in the states of New York or Washington in the USA. As far as the other brands we’ve reviewed are concerned, the best options for global accessibility are MEXC, AlphaX, Changelly and Margex. 

How to Use Marketplaces Safely

The sites we recommend here are all great tried and tested platforms. However, it doesn’t mean that the traders on these sites are necessarily trustworthy. At the end of the day, you’re trading with strangers, so you have to make sure you’re taking precautions.

Finding a reliable seller

After filtering out your sellers by the preferred location and payment method, you need to choose who you are going to deal with. As a rule of thumb, DO NOT CHOOSE A SELLER BASED ON PRICE.

Sometimes it’s worth paying 5% more in order to conduct a transaction with a more reputable seller. Look at the seller’s transaction history and see how they were rated in past transactions.

Also, don’t post a request to buy Bitcoins; that will just attract a lot of scammers. Instead, look for people who are actively selling Bitcoins, as they are probably more legit.

Go over the seller’s profile and make sure that they qualify as follows:

• They have traded over 100BTC in total with a minimum of 100 trades
• The seller has a feedback score of at least 98%
• The seller’s account is more than 1 year old
• The seller is verified (phone number, email, company account)
• The seller is trusted by at least 10 people

If you follow these strict rules then you’ll probably be fine. If you can’t find a seller that matches all of the above, try to find the next best thing. The idea is to do your homework and see that the seller has actually completed large successful trades in the past.

Afterwards, search the forum of the platform in question for that seller’s username. If any complaint comes up, you’ll probably find it there. If all goes well, you should now have your chosen seller.

Communication with sellers

Send a message to the seller requesting a trade and wait for their response.

DO NOT:

• Send additional information before receiving a response from the seller.
• Agree to trade with the seller outside of the site, since you will not be protected by the platform’s escrow service.
• Send your payment information in any other way other than through the channels as instructed by your chosen platform. No emails, text messages or phone calls. Use the site’s interface only.

Once everything seems in order, you can start the trade and send the payment.

Make sure to mark the payment as made only after you send payment, or else you will probably be denied the trade.

Additional tips

If any issue arises, try solving it with the seller first.

Keep in mind that if you’re totally new to trading sites, “power sellers” may not want to trade with you because you do not have a solid enough rating, or enough feedback, yet. This means you may have to make a few small trades with less trustworthy sellers in order to bump up your feedback so you can deal with the more respected sellers.

Top 10 Alternatives to LocalBitcoins

Since LocalBitcoins ceased its operations in 2023, we’ve been on the lookout for a list of alternative P2P exchange platforms. Our research has uncovered the following top 10 brands.

1. Best Wallet

Best Wallet is a multifunctional cryptocurrency platform with a peer-to-peer (P2P) feature, giving users complete control over their cryptocurrencies. It is the foremost DEX that we recommend as a P2P on this page for the functions outlined below. With Best Wallet, users can trade over 1,000 cryptocurrencies immediately with other clients. In this way, there’s no need to resort to intermediaries. The platform’s design as a non-custodial, mobile-forward tool permits clients to keep track of both their private keys and funds during transactions. 

Best Wallet is rather simple to use. Just follow the steps entered into here, and you’ll be using it in no time at all:

• Step 1: Download the app to your mobile phone
• Step 2: Open the app, sign up with your email and create a secure password
• Step 3: Make sure you back up your private keys or seed phrase
• Step 4: Fund your Best Wallet account by effecting a transfer from another wallet or exchange
• Step 5: Start trading choosing from the best available offer – or come up with your own – to buy or sell crypto
• Step 6: Once you’ve selected your preferred payment method, use the in-app escrow service to secure your transactions
• Step 7: Confirm the payment and release the funds

Best Wallet possesses qualities which give it a definite edge over its competitors. Some of these include users’ ability to exert full authority over their private keys, a strong element of privacy, no trading fees, DeFi integration and the sheer volume of payment methods supported.

Negative points include a lack of fiat support, access which is only attainable via mobile phone and a number of functions which have yet to be released.

Visit Best Wallet

2. OKX

One of the major cryptocurrency exchanges, OKX also doubles up as a Peer-to-Peer (P2P) marketplace, allowing investors to directly buy and sell digital assets such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and others. The site performs transactions between users without intermediaries, carrying out crypto trading in a decentralized environment.​ 

You can get started on OKX P2P by following the instructions below:

• Step 1: Using your email or phone number and the link above, create an OKX account
• Step 2: Complete the KYC process to start trading
• Step 3: Choose the P2P trading subsection under the Buy Crypto option
• Step 4: After determining your chosen cryptocurrency, check the available offers
• Step 5: Settle on the best one for your needs together with your preferred payment method
• Step 6: Follow the payment instructions and complete the transaction
• Step 7: Click “payment completed” to have the crypto moved from escrow to your account

Like Binance P2P, users can enjoy trading without any added costs, as well as an escrow system for security and broad payment support. In addition, they get to benefit from affordable prices, efficient transactions, an easy-to-use interface and no withdrawal limits.

On the downside, there are the KYC requirements to contend with, not to mention inconstant market liquidity and limited availability in certain regions. Moreover, potential price fluctuations may affect the flexibility of rates.

Visit OKX

3. MEXC

​MEXC is a notable centralized cryptocurrency exchange, or CEX, which comes with an extensive range of services. One of these is its Peer-to-Peer (P2P) trading platform. With this function, users can trade cryptocurrencies directly with one another, making for seamless transactions in local fiat currencies. What’s more, processes take place without recourse to intermediaries.

It couldn’t be easier to register your account on MEXC. Just take a look at the instructions below:

• Step 1: Choose the “sign up” button on the MEXC website
• Step 2: Using your email address or phone number, proceed to create your account, using a strong password
• Step 3: Fulfil the KYC requirements
• Step 4: Choose the option “buy crypto” and “P2P trading”, in that order
• Step 5: Choose your desired crypto and fiat payment option
• Step 6: Once you’ve reviewed the available listings, click “buy” or “sell” and confirm the trade
• Step 7: Effect the transfer according to instructions  and choose “I have paid”, upon which the crypto will be released from escrow

MEXC has earned its positive reputation for a number of reasons. Among these, we find its disparate payment options, global reach, high security standards and lack of trading fees. Other than these elements, its user interface is also very accessible.

Unfortunately, however, there is no support for DeFi or NFT services. The platform also does not cater for fiat users, and is not available in certain regions and countries.

Visit MEXC

4. AlphaX

​If you’re looking for a platform that consists of a versatile decentralized exchange (DEX), AlphaX certainly fits the bill. The site offers a number of specific services, including on-chain spot and futures trading. It especially concentrates on meme coins. A relatively new platform that has been in operation for 2 years, it is one of the go-to crypto destinations where trading centers on the blockchain. Thanks to this function, which gives clients self-custody wallets, investors can enjoy complete power over their holdings. You can find over 200 trading pairs on the platform, including prominent cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), aside from a number of meme coins.

If this exchange is the right one for your trading needs, simply follow these instructions to start buying and selling crypto:

• Step 1: Visit the AlphaX site using the above link and select “Get started”
• Step 2: If using a crypto wallet, connect it to the exchange; otherwise, just login using your email
• Step 3: Verify your email address or your wallet connection link
• Step 4: Deposit and start trading

AlphaX comes with a good number of benefits, including not having to satisfy KYC requirements, 125X leverage on futures contracts, swift alerts to the release of new meme coins and a great user interface.

Still, AlphaX doesn’t offer any staking possibilities despite its multifunctionality. Additionally, clients cannot deposit in any currency other than USDT and USDC.

5. Pionex

​The next P2P on our list is the CEX cryptocurrency exchange Pionex. The platform can trace the start of its operations to 2019. Pionex is well-known for its automated trading bots, which can be accessed directly via its platform. The site is suitable for both beginners as well as veteran traders, since its user interface facilitates automated trading strategies without the need for external tools or deep technical knowledge.

For easy access to Pionex’s features, follow the steps outlined below:

• Step 1: Visit the Pionex website using the link above, choose the “sign up” button and enter both your email address and a secure password
• Step 2: Verify your email address and enable 2FA
• Step 3: Transfer crypto from another wallet or exchange to your Pionex
• Step 4: Explore the available trading bots and begin your trading journey

Pionex is truly noteworthy for its automated trading facilities, including the grid, leveraged grid and spot-futures arbitrage bots. It also boasts dollar-cost averaging and infinity grid trading features. Despite its tech-forward approach, the platform is easy to use, even for clients who don’t possess any programming skills. Users can also benefit from the low trading fees, broad cryptocurrency support and rapid processing of trades. Added to this, the site operates with strict security elements, such as offering clients the possibility to enable 2FA.

Areas for improvement include the extension to fiat support and enhancement of customer support.

​Visit Pionex

6. Changelly

Changelly is a beginner-friendly decentralized cryptocurrency exchange platform which has been around since 2015. The site’s design aims to allow efficient exchanges between a wide spectrum of digital assets. Functioning as a non-custodial tool, Changelly focuses on swapping cryptocurrencies without keeping funds on the platform. In this way, the site prioritizes both security and user control.

It’s easy to get started on Changelly; just follow the instructions below:

• Step 1: Visit the Changelly website via the link seen above
• Step 2: Settle on the desired cryptocurrencies for exchange; crypto-to-crypto transactions don’t need registration
• Step 3: For added functions or to manage transactions, sign up by providing an email address and creating a password
• Step 4: Verify your email address if you carry out the above step
• Step 5: Enable 2FA
• Step 6: Carry out the desired exchange; for crypto-to-crypto swaps, there’s no need for KYC, whereas it’s required for fiat-to-cryptos swaps

Users have championed Changelly for a number of qualities, including its diversity of crypto support, user-friendliness, dispensation with KYC requirements for simple swaps and worldwide accessibility.

On the flip side, though, fees including fiat usage may be more steep, trading features may be too basic for professional traders and fiat users may experience geographical restrictions.

7. Margex

Margex is one of the more recently established cryptocurrency trading platforms that is known for its derivatives trading, with leverage options up to 100x. Appealing to the needs of both newcomers to the crypto space as well as experienced traders, Margex boasts an interface that is simple to navigate, solid security measures, and plenty of trading features.

You can sign up to this tool in the 5 easy steps outlined below:

• Step 1: Enter the official Margex website via the link provided above
• Step 2: Using your email address and a secure password, create your account
• Step 3: Verify your email address and set up 2FA
• Step 4: Deposit funds in the site’s wallet section
• Step 5: Navigate to the “trade” section, choose your preferred trading pair, set your leverage and trade!

Margex is highly touted for its great leverage options, convenient and user-friendly tools that are also appropriate for beginners and reasonable fees. Moreover, clients are satisfied by the seamless registration process that doesn’t require KYC.

Complaints about this platform tend to center around the withdrawing process, which takes a little longer than ideal, as it is manually entered. Aside from this, the site services a limited selection of cryptocurrencies compared to others. There are also no options available for spot trading.

Visit Margex

8. Binance

Binance P2P is a peer-to-peer marketplace that is part and parcel of the Binance universe. On this platform, users can trade cryptocurrencies directly with one another. Instead of traditional spot or futures trading on Binance, P2P transactions comprise direct exchanges between users, with Binance acting as an escrow service to ensure transaction security.

Users can register on Binance P2P by following the steps outlined here:

• Step 1: Sign up and complete KYC using the above link
• Step 2: Choose a trade offer from existing ones or create a custom order
• Step 3: Select your preferred payment method and proceed
• Step 4: Your crypto will be held in escrow
• Step 5: The seller will confirm the payment
• Step 6: You receive the crypto in your wallet

Some of the plus points of Binance P2P include the lack of trading fees, wide variety of payment methods, escrow protection and bespoke trading options. You also get high liquidity.

On the other hand, buyers should watch out for chargeback scams, and false proof of transactions. There’s also the risk of buyers having their account frozen.

Visit Binance

9. Kraken

Undoubtedly the best-known brand on this list other than Binance, Kraken has been one of the go-to cryptocurrency exchanges for a wide variety of services related to trading digital assets. Established in 2011, this CEX boasts an extensive platform for diverse trading activities, including buying and selling. Reputed for its stringent security elements and wide range of supported cryptocurrencies, Kraken is amenable to all sorts of traders, whether they’ve recently entered the crypto sphere or have years of investing under their belts. 

The platform’s well-established status continues to attract new crypto buyers. If you’re keen on joining the fold, take a look at the steps below:

• Step 1: Visit the Kraken website using the link above
• Step 2: Enter your email address, secure password and country of residence
• Step 3: Activate your account after registration and enable 2FA
• Step 4:  Fulfill verification requirements using some personal documents
• Step 5: Deposit funds into your account
• Step 6: Choose your desired cryptocurrencies and start trading

Despite its status as a renowned exchange platform, Kraken distinguishes itself from a number of competitors by its reasonable fees. The site presents numerous advanced trading options to its users, and operates with the advantage of high liquidity. It also comes with a store of educational material on the various topics surrounding trading, equipping first-time buyers and sellers with knowledge of the market.

That said, drawbacks include restrictions in place for certain countries or territories and steeper fees for the Instant Buy option. Also, although the platform is also suitable for beginners, it might take less experienced traders a while to become familiar with all the site’s available features.

Visit Kraken

10. Coinbase

Coinbase is a comprehensive centralized cryptocurrency exchange endowing both individual and institutional traders with the possibility to deal in a broad range of cryptocurrencies efficiently. Thanks to the exchange’s impressive storage facilities and compatibility with other wallets, users can find support for over 200 cryptocurrencies, allowing them to diversify their portfolios.

Sign up to Coinbase by following these steps:

• Step 1: Set up your account on Coinbase using your email, password, and residence
• Step 2: Verify both your email address and phone number
• Step 3: Provide any further required details
• Step 4: Go through the KYC verification process by providing proof of identity, and make sure this is confirmed
•  Step 5: Link a payment method to your account
• Step 6: You can now start trading

Coinbase stands out among the plethora of exchange brands in the market for its excellent security, low starting funds, extensive cryptocurrency support and rapid withdrawals. The trading platform possesses a host of elements, such as real-time charting tools and order books. The fees are also very manageable, especially considering Coinbase’s stellar reputation.

What’s not to love about Coinbase, you may be asking? Well, even though prices are reasonable, they are still a little higher than those quoted by other exchanges, which is a distinct downer for frequent traders. Also, even though many cryptocurrencies are supported, staking is not possible with all of these. Finally, some clients have indicated customer service as an area which could do with a boost.

Visit Coinbase

Conclusion – Are the Alternatives to LocalBitcoins Legit?

In this article, we reviewed a variety of payment methods for buying Bitcoin. These are all perfectly viable alternatives to LocalBitcoins, the most promising one being BestWallet. Still, despite the security offered by these sites, they are not completely impervious to scammers. This means that you should always carry out due diligence before entering into a trade.

You are sure to find a regulated exchange that supports your country or requested payment method from the above list. Simply make sure not to invest more than you can afford to lose, aside from following the safety tips I’ve detailed in this post.

Frequently Asked Questions

Local Bitcoins

8.4

Ease of use

8.5/10

Fees

9.0/10

Security

7.5/10

Reputation

8.8/10

Stability

8.1/10

Pros

• Wide variety of payment options
• Available worldwide
• Reasonable platform fees
• Quick transactions

Cons

• Dealing with strangers opens the option for scam
• Usually higher exchange rates