Review: Paxful VS. Local Bitcoins

9

Today when it comes to buying Bitcoins you usually go to a Bitcoin broker (e.g. Coinbase and Coinmama) or a Bitcoin trading platform (e.g. Bitstamp and Kraken). However some of these exchanges just don’t cut it – either due to their accepted payment methods or their geo restrictions (for example Coinabse doesn’t accept people from many countries around the world).

In this case you can always use something that can be best described as “the eBay of buying Bitcoin”. Networks of Bitcoin sellers from around the world that allow almost anyone to buy Bitcoins. Today there are two platforms that supply this kind of service – Paxful and Local Bitcoins. I’ve reviewed Local Bitcoins in the past and today I want to take the opportunity and review Paxful as well.

In its core, Paxful is very similar to Local Bitcoins. You choose the amount of Bitcoins you want to buy and your payment method, and then you are presented with available sellers. Each seller has a reputation from past trades and each specifies their Bitcoin exchange rate.

The exchange rate is much higher than what you’ll find at regulated trading platforms like Bitstamp and that’s due to the fact that sellers are taking a much bigger risk when selling Bitcoin to strangers. Since Bitcoin transactions are irreversible, if someone pays the seller and then denies he ever conducted the transaction, the seller may end up with no Bitcoins and no payment.

Also, some sellers allow you to buy Bitcoins with less traditional payment methods (e.g. Amazon gift cards, Skype voucher codes), so they tend to charge more for those.

Finally the seller will also display any specific details he deems relevant for the transaction. You will be able to see if the seller is currently online as well so you can both chat about the transaction once it’s underway.

Paxful seller example

Buying Bitcoins with Paxful

The process is pretty simple.

  1. Choose the amount of Bitcoins you want to buy
  2. Choose the currency you want the exchange rate to be in
  3. Select a payment method (there are dozens)

Then you get the chance to either search through the complete list of sellers or just get shown the best sellers possible based on Paxful’s criteria.

Once you choose a vendor and click “trade”  You will be redirected to the trade page and you can chat directly with the seller via the live chat. Once they answer you then follow their instructions to pay, click mark as paid and wait for them to release the bitcoins directly to your Paxful wallet.

Most trades are instant, but it depends on the payment method and if the seller is online. Paypal and gift cards for example are instant. Bank and CO-OP credit union cash deposits, Western Union, Moneygram take some time as you must leave your home to their branch and deposit cash. Usually they happen in under 1 hour.

When a trade starts, seller bitcoins are transferred automatically to Paxful’s secure escrow and at this point the seller can’t cancel the trade. Only a buyer can cancel a trade at any moment and the bitcoins will be transferred from the escrow back to the seller’s wallet. If the buyer hasn’t delivered the payment and didn’t mark payment as complete within the payment window time frame, a trade will be auto-cancelled and the bitcoins will be moved back to seller’s wallet.

Zero transaction fees

The supposedly cool thing about Paxful is that it doesn’t take any fees from you as the buyer. The site only takes 1% from the total sale amount from the seller. However saying that there are no transaction fees is a bit naive since most sellers just portray these fees inside their exchange rate. This is very similar to what Local Bitcoins offer.

Use caution with Paxful

From reading online reviews about Paxful it’s obvious that some people mistake the platform’s integrity for the seller’s integrity. Meaning, if a seller scammed them or was not trustworthy they assume the platform isn’t legit as well.

That’s why I wanted to point out some resources that may help you solve any issues when buying Bitcoins through Paxful.

  • There’s an active support forum on Paxful were you can ask any question you like regarding the platform.
  • Make sure that the user that you are trading with is online, orders will auto cancel in a short period of time and if the seller isn’t online that may be annoying.
  • Do not release the payment from escrow unless you have full control over the payment you receive.  That means, confirmed, in your account, not pending or anything else.
  • No matter what website, what system, what user, what country, what ANYTHING, If you cannot afford to lose money, DO NOT SEND IT.

There are many debates online whether Paxful is legit or not.  There’s also this site that gives you a breakdown of why (in the author’s opinion) the site isn’t trustworthy.

In my personal opinion Paxful is legit (I even ran the Bitcoin scam test on it). However there may be users on Paxful trying to scam you. But this is true for every other P2P marketplace out there like eBay, LocalBitcoins and OpenBazar.

So who’s the winner?

Both platforms seem to supply similar services, however LocalBitcoins has more experience and reputation in the field. In the end, it all boils down to the sellers. Whatever platform supplies you a seller that suits your needs (i.e. payment methods, exchange rate, reputation) I would use that platform. Functionality-wise they are pretty much the same, so no clear winner at the moment. Just make sure to exercise caution whenever conducting trades with strangers.

Ofir Beigel

Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

Paxful

Free
Paxful
8.1

Reputation

8/10

    Fees

    9/10

      Exchange Rate

      7/10

        Availability

        9/10

          Support

          8/10

            Pros

            • Wide variety of payment methods
            • Responsive support forum

            Cons

            • High exchange rates
            • High possibility of scam

            9 Comments

            1. Actually , after using paxful for a while , I can only say they try , I think the platform is just ok , I have not successfully bought bitcoin with iTunes before on there though , it always says my ITunes I have in my hands with recipt has been redeemed ,in one Case lately ,I tried selling 6 iTunes vouchers , the buyer said , they have been redeemed, how that was possible , I am still amazed till this moment ….but non the less , I still think people are quick to calling names , scam and all that , imagine reading the complaints above from SAHER , if any one acted as a scam , it was surely him , in one case , some one dropped a dumb comment saying people exchange their giftcards for bitcoin for lower amounts because it is a scam , how ridiculous a thought, people do to get bitcoin swiftly , rather than waiting 5-7days which might not be successful as it was in the past , most scam alerts are errors from either buyers or sellers ,and spoilers thoug , who just want to critise any thing , even the American justice system we have issue with , talk less a platform trying to satisfy thousand or millions of hungry users , you guys take it easy , so far , paxful is good .

            2. Saher Hegsazy on

              Fees

              9

              Exchange Rate

              9

              Availability

              9

              MODERATORS INVOLVED IN FRAUD, Probably working with scammers.

              Moderator
              @saherhegazy82 Buyer here has reported you for this trade. Explain what exactly what issue have you had with your skrill trades.
              Mar 29th 2017 11:13 AM

              Dear Moderator, I make a living at Paxful nowadays and obviously I can’t work. The idea of using Skrill relied on the following; having 3 Skrill accounts, one is mine [email protected](USD) connected to my bank account at the UAE where I am a resident, a project manager and a business owner who recently got in financial trouble to withdraw money to bank, second one [email protected](EURO) belonging to my wife who’s European and through her account we can buy bitcoins cheap and create margin, and the third one [email protected](USD) belongs to my best friend, we are aging this account to use with the known instant method to buy BTC. After receiving the funds from Mr. Proxy they were moved to the EURO account for us to buy and we instantly tried to circulate it as we needed the coin. Both the Skrill and the BTC merchant accounts were immediately closed after that transaction. I have been communicating with BP CEO and support team since then and they are refusing to give any information, Skrill are also stalling.
              Mar 29th 2017 11:15 AM

              I don’t want to forfeit using your services, I like it here. I will accept your decision. Thank you.
              Mar 29th 2017 11:15 AM

              my coins are on hold for a day vp1yMwP7z1q, I was not able to trade nor earn, and since the buyer paid nothing for that trade, while marking as paid. The buyer had willingly cancelled the other trade and I am doing my best. Buyer can resort to Skrill for reserve. Thank you very much. Please release me my coins if you can, I need to work, but again I will accept your arbitration as I need to get back to work :)
              Mar 29th 2017 11:17 AM

              Moderator
              @saherhegazy82 So basically you are saying that your accounts got shutdown you had no clue, buyers here have been loosing funds because you said them your account Skrill account has been suspended that you neither can withdraw or do refunds. Over it you blocked these buyer so they can not open any new trade with you, but you moved remaining coins out now so even they try with an alternate account they account. Is that all correct?
              Mar 29th 2017 11:23 AM

              Only one account got closed [email protected] which is what we used to buy our coins through BitPanda. The others are working now, I confirm I have not access to that account. The reason why I blocked this buyer is that he consistently refused to send the verification I asked to resolve my issue with Skrill and BP. I moved my coins out as I am worried he may chase me with more fake account like the one he made imriich.
              Mar 29th 2017 11:26 AM

              Once again I will respect your decision, I believe I can do well with Paxful.
              Mar 29th 2017 11:26 AM

              Moderator
              @saherhegazy82 There’s nothing in your Offer/Trade Terms that a buyer will be asked for Identifications. These Buyers aren’t fool for running around you like this, you made them loose money so they have to chase you around & blocking/moving funds out like this made it even clear.
              Mar 29th 2017 11:36 AM

              Moderator
              I have already contacted skrill buyers in past asking them to a chargeback which 99% they can’t neither these buyers. You have to add funds back & refund these buyers who you took funds from, current dispute will be closed for buyer. You have 24 hrs to refunds other skrill buyers, add funds re-open the escrow, if there’s no refund in next 24 hrs your account access be blocked here.
              Mar 29th 2017 11:39 AM

              I have never had an issue in any of my trades, and I didn’t fool anybody. In my terms I stated I will only release after I receive 100% verified funds and not a second before no matter how long that takes. If anything it was me who was chasing him for verification. Again he put my coins on hold for a day with another account that is fake, and stopped my business. I did nothing wrong, who is going to compensate me for that day I was on hold.
              Mar 29th 2017 11:43 AM

              I know that it is against the rules to have multiple accounts, it’s against the rules to hold coins, it’s against the rules to curse. I did none of that, all I asked for was to get my money, nothing else.
              Mar 29th 2017 11:43 AM

            3. saher hegazy on

              Reputation

              8

              Fees

              8

              Exchange Rate

              8

              Availability

              8

              Support

              3

              I am a seller at Paxful. It is a great platform that had actually made me make a lot of money, their support is really bad though. They do not respond most of the time and ignore disputes with obvious scams.

            Leave A Reply