LocalBitcoins is one of the most popular P2P exchanges in the crypto industry.
This platform offers trading services almost anywhere in the world, and has long been the go-to platform for traders looking to exchange Bitcoin directly with each other.
However, LocalBitcoins has recently made it mandatory for users to complete KYC documents in order to trade on the platform. While this is not such a big deal, P2P users are not keen on the idea and have started looking for alternative platforms.
INTRODUCTION
Launched in 2012 in Helsinki, LocalBitcoins has long held the position of being one of the most recognised peer-to-peer (P2P) platforms in the world.
Even in the beginning, LocalBitcoins had no trouble gathering new users on the platform. Considering the unique features it offered, it was clear that the platform was going to revolutionise the cryptocurrency market.
The platform offers more than 200 payment options, including bank transfers, cash deposits, PayPal, cash on hand and many more.
While Bitcoin has long been the platform’s primary focus, it also supports more than twenty other currencies.
But, as we said, with the mandatory KYC update, users have started to look for other P2P platforms to use.
In this guide, we will review some of the most popular alternatives.
P2P TRADING AND LOCALBITCOINS
If you have been a loyal user of LocalBitcoins for some time now, you may be a little out of the loop when it comes to other P2P platforms and their features.
The most important factors to consider when choosing a platform include price and security, but there are many more that should not be overlooked.
Researching each platform individually can be quite time consuming.
But don’t worry, we’ve done the heavy lifting for you.
Let’s take a look at some of the best alternatives on LocalBitcoins and help you choose the ideal one.
Paxful
Paxful is a reliable alternative to LocalBitcoins, and supports users from all over the world to trade on the platform.
It was launched in the United States in 2015, and what may come as a surprise is that this P2P exchange service is actually much bigger than LocalBitcoins.
In terms of payment options, it is also much more comprehensive compared to LCB. Currently, there are over 300 payment methods you can use to buy/sell BTC.
There is a 0.5% fee for cryptocurrency conversions, but there are no fees for buying cryptocurrencies. Although, there is an exchange fee that is set by the customer offering BTC purchases.
Transfer fees only apply to the sale of cryptocurrencies, and the exact amount depends on the payment method you use. Bank transfers are set at 0.5%, while alternative methods (debit cards, digital currencies, etc.) are set at 1%.
The main drawback of Paxful is that it also integrates a mandatory KYC verification. Without it, users will not be able to deposit or withdraw funds.
LocalCoinSwap
LocalCoinSwap is a P2P cryptocurrency exchange service that was established in Hong Kong in 2017.
In addition to buying/selling BTC, you can also use it to exchange more than 20 other cryptocurrencies, including some of the most popular ones such as ETH, XRP, LTC and others.
The platform has optional KYC verification, which is also one of the main reasons why it has attracted such a strong following.
Over 200 payment methods are available, including PayPal, bank transfer, credit/debit card, BTC and more.
LocalCoinSwap operates on a taker-manufacturer fee system. Takers, people who respond to existing offers, are charged nothing, while manufacturers pay 1% in merchant fees. Compared to other P2P platforms, the 1% trading fee is a bit high.
The withdrawal fee is 0.00025 BTC per BTC withdrawal (applies to the standard BTC wallet). However, this fee may vary for non-custodial wallets.
Currently, there are still no limits regarding the withdrawal or deposit amount.
HodlHodl
HodlHodl is a P2P trading platform that was established in 2018 by two Fintech and software development experts.
The most unique feature of HodlHodl is that it provides escrow through multisig addresses, which means there is no manual escrow service.
You can connect to anyone in the world at any time to trade BTC, and there is no mandatory KYC verification. All you need is a valid email address to register on the platform.
HodlHodl probably has the widest variety of methods compared to other P2P platforms in terms of payment. Although, it is up to the sellers to decide whether or not they will accept a specific payment option.
Some of the payment methods included are SWIFT, SEPA, regular bank transfers, credit cards, PayPal, Venmo, Western Union and many more.
When it comes to fees, merchant fees vary between 0.5% and 0.6% (depending on the users’ referral and verification status). Those who registered through a referral code receive a 0.55% fee, and verified users get a 0.5% merchant fee rate.
This fee is split between buyers and sellers, and in situations where the two have different fees, the lower fee will apply.
The minimum BTC you can buy or sell is 0.001 BTC.
Considering the various payment options and fairly low fees, HodlHodl is a decent replacement for those looking to exchange LocalBitcoins.
BisQ
BisQ is an open source P2P platform that was established in 2014, making it one of the pioneers in the peer-to-peer platform community.
The platform offers users the ability to buy and sell cryptocurrencies in exchange for their national currencies. Since its launch, BisQ has evolved tremendously, but has always focused on offering fiat to BTC and BTC to fiat transactions in a decentralised manner.
BisQ does not require any KYC information, and verification is not mandatory. Users can trade directly with each other without having to involve a third party.
Compared to other P2P platforms, BisQ does not offer as many payment options as others, but includes some of the most popular ones, such as bank transfers, credit/debit cards and PayPal.
For this platform, fees work a little differently.
There is no clear categorisation between takers and makers, as both pay the same trading fee: 0.001 BTC. In addition, there is a mining fee that stands at 0.0003 BTC, and is charged three times (deposit, actual trade and withdrawal), making it a total of 0.0009 BTC.
To keep the platform safe from scheming traders, there is a security deposit which stands at 0.1 BTC.
Withdrawal fees are one third of the mining fee, which means they stand at 0.0003 BTC. This withdrawal fee is much lower than the industry average, which stands at 0.0005 BTC – 0.0008 BTC.
If you are looking for an alternative platform with competitive fees to LocalBitcoin, BisQ could be the right choice.
Bitquick
Users who prefer to trade in cash and wish to avoid revealing private details about their identity may find BItQuick the ideal alternative to LocalBitcoins.
Based in the United States, BitQuick is a P2P platform that focuses primarily on allowing users to exchange cash for BTC. This means that users can only buy or sell BTC through cash, cheques or bank transfers.
The platform even allows users to register with an alias if they wish to keep their identity revealed. Once you register and find an offer you like, you can go to your nearest bank and deposit money according to the trading terms you agreed upon.
When you upload your deposit receipts to BitQuick, your wallet will be funded with the coins you purchased.
KYC verification is not mandatory, and the platform developers have stated that this is not going to change in the foreseeable future.
As mentioned, the only payment method available on BitQuick is cash. This has been the main focus of the platform since it was launched, and other options such as online payments are not presented.
The fee system at BitQuick consists of mining fees and service fees. The concept is fairly easy to understand: buyers pay 2.00% of the TOV (Total Order Value) as a flat fee to the platform. Sellers are not charged anything. This gives new sellers the opportunity to divest BTC for free.
Mining fees stand at 0.0001 BTC for Bitcoin transactions, which is very low compared to the industry average.
Trading fees are not included as the platform does not work like the average crypto exchange. There is only a 2% service fee for buyers and a 0.0001 BTC fee for mining.
Withdrawal fees are also irrelevant due to the nature of the platform. However, the BTC mining fee can be seen as a withdrawal fee in some ways.
FREQUENTLY ASKED QUESTIONS
Is Paxful or LocalBitcoins better?
When comparing P2P exchanges, there are many things to consider (from payment methods and fees to features and overall security).
Both LocalBitcoins and Paxful have a huge market share, even though Paxful seems to be capturing more volume on a weekly basis.
When it comes to features, Paxful has slightly better offerings, but is less secure compared to LocalBitcoins.
Overall, both are reliable P2P platforms that have a lot to offer. Therefore, choosing either of these platforms will not make you regret your decision.