Review: Paxful VS. Local Bitcoins

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.

Paxful

Free
Paxful
8.1

Reputation

7.5 /10

Fees

9.0 /10

Exchange Rate

6.5 /10

Availability

9.3 /10

Support

8.2 /10

Pros

  • Wide variety of payment methods
  • Responsive support forum

Cons

  • High exchange rates
  • High possibility of scam

Bitcoin Video Crash Course 

Dummy-proof explainer videos enjoyed by over 100,000 students. One email a day for 7 days, short and educational, guaranteed.

We hate spam as much as you do. You can unsubscribe with one click.

34
Leave a Reply

avatar
20 Comment threads
14 Thread replies
5 Followers
 
Most reacted comment
Hottest comment thread
28 Comment authors
Asher SkylarkBrickRyanclearly001Veronica Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Asher Skylark
Guest
Asher Skylark

this site is composed of buyers whom i would say the worst negotiators of all time. i see some buyers whos trying to buy your gift card immediately strikes you for the first 2 minutes. people in paxful.com are stupid who doesnt have the proper manners to interact with there customer.

Brick
Guest
Brick

Paxful Is a scam on itself. It is no wonder that there are so many scammers there. I got my account banned after 200 transactions and no issues. I tried many times to contact them but they are unreachable. They just kept the bitcoins I had there for almost 300$. If you think that you will have an issue and someone will assist you, don’t believe that for a second. I know a few other people in the same situation and they also never got their money back.

Ryan
Guest
Ryan

My account got hacked from a Korean IP address and ALL of my bitcoins were sent out. I hadn’t logged into my account in over a year when I got the email saying someone logged into it. Paxful says there is nothing they can do. In other words, if you’re hacked, no matter how much money you had in the account, you’re out of luck. This also means that Paxful can steal your money and shrug there shoulders. Proceed with caution.

clearly001
Guest
clearly001

I have tried Paxful for a very long time, I created a new account because I lot the one I was using before. Paxful is very good site to trade, buy and sell bitcoin very fast and easy, just be wary of scammers and follow rules everything will be fine. Their customer service also improved. I love paxful so much, I’m a fan of paxful

Emack
Guest
Emack

MOVING ON FROM PAXFUL ” SCAMMED/HACKED FOR $200.00 LESS THAN A MINUTE “. HAD BEEN USING SITE FOR ALMOST A YEAR. HAD ALMOST 10 SUCCESSFUL TRANSACTIONS UNTIL YESTERDAY. SET UP A TRANSACTION WITH SOMEONE BY THE NAME SUPERLUMINAL TO PURCHASE $215.25 WHICH WAS TO NET ME $190 ODD DOLLARS OF BITCOINS. THIS WAS A BANK DEPOSIT WHICH APPEARED TO GO WELL. I COMPLETED THE DEPOSIT FOLLOWED SELLERS INSTRUCTIONS GOT NOTIFICATION OF FUND BEING RELEASED BY SELLER TO MY WALLET. HOWEVER I WAS OUT TAKING CARE OF SOME OTHER ERRANDS AND ARRIVED HOME AN HOUR LATER TO TRANSFER FUNDS TO MY… Read more »

Saher
Guest
Saher

Why you should never use Paxful. I’ve been a vendor on Paxful for 8 months and today I decided never to use them again. I have always had issues with them that I tried to ignore believing that things will improve with time, but they just keep getting worse. In summary Paxful made 3 things mistakes that makes me believe anyone in their right minds should avoid them. 1. Paxful never paid me or any of its’ users their BCH, BTG or any of the forked coins, in fact I have proof Paxful claimed all of these coins for themselves… Read more »

Fort
Guest
Fort

I have been using Paxful for a while now and i will say before trading do try to check on the seller profile , Check rating and do start buying with just $50 , if he release your bitcoin then you are good to go for more deal with the seller , do not trade with someone who got up to 20 negative reputation, check that , very important , if his Negative is high that means that person is a ripper , I like bitcoin from paxful , Great site and i got good sellers that i trade with… Read more »

Steve Joseph
Guest
Steve Joseph

I used Paxful to get started and haven’t had any hitches with 2 sellers, multiple orders. I do agree that the exchange rates are grossly off-putting. It’s payment source is perfect for the way I’d like to move some money around for a larger investment but the high exchange rates don’t make sense and looking at the sheets for Ether and Lite the absurd differences are better invested in those currencies now, since I remember very well when BTC was under $300/BTC, now it’ver over $10K/BTC. Those two sellers were a mixed experience. First seemed more like a bot and… Read more »

FUCK PAXFUL
Guest
FUCK PAXFUL

DO NOT go ON PAXFUL FUCKING STUPID JERKS SCAMMED ME DISPUTE ALSO TAKING 2 FUCKING WEEKS FUCKING BULLSHIT SITE

lonesbeats
Guest
lonesbeats

DO NOT USE PAXFUL.COM! I just purchased a small amount of bitcoin to test and after following all instructions. the seller went AFK and completely ignored me after i sent my payment. the sellers name was FIRMINO. do not use this service. the support system is automated. there is no real person there to help you. i basically got burned and paypal will not refund since it was not a physical item. they have no way of proving whether or not you received your goods.