A trading cryptocurrency guide must provide reviews of all of the top crypto exchanges out there, so that you can find the best cryptocurrency exchange site for you. This review of LocalBitcoins consists of four parts: general information, fees, deposit methods and security.
LocalBitcoins is a Finnish cryptocurrency exchange founded in 2012.
LocalBitcoins does not list US-investors as prohibited from trading, but US-investors should do their own independent assessment of any problems arising from their residency or citizenship.
At LocalBitcoins.com, people from different countries can exchange their local currency to Bitcoins (but the exchange does not support any other cryptocurrency). The site allows users to post advertisements where they state exchange rate and payment methods for buying or selling bitcoins. You reply to these advertisements and agree to meet the person to buy Bitcoins with cash, or trade directly with online banking. Bitcoins are placed in LocalBitcoins.com web wallet from where you can pay your Bitcoin purchases directly.
In many ways, LocalBitcoins is like an online store. Investors at the exchange post different “advertisements”, where they offer a price quote for a specific cryptocurrency. This advertisement can be for both buying or selling or either one of those actions. If you as another buyer/seller thinks the offer is attractive, you can just take it.
LocalBitcoins Trading fees
Considering the above business model, the distinction between parties on the exchange is not taker and maker, it’s rather more like person advertising and person responding to advertisement. The person doing the advertisement is charged 1.00% fee for every completed trade. The person responding to the advertisement is not charged any trading fees.
If comparing 1.00% to normal trading fees, it is very high. 0.00%, however (as it is for the person responding to the advertisement by buying/selling as advertised) is very low. The industry average is arguably around 0.25% both ways. However, there are dissimilarities between LocalBitcoins and other normal exchanges somewhat explaining the higher fee. We recommend investors using LocalBitcoins to consider themselves whether this fee is fair or not.
LocalBitcoins Withdrawal fees
This Finnish peer-to-peer exchange charges a withdrawal fee amounting to only the network fee when you withdraw BTC. This fee is below the industry average and thus constitutes a competitive advantage against the majority of other top crypto exchanges in the market.
At this place, you can purchase advertised cryptocurrencies through both wire transfer and credit cards. This can be helpful especially for newer crypto investors.
One should generally look out for the different deposit fees charged by exchanges for deposit of fiat currencies via wire transfer or credit cards, and whereas it might be indifferent to you whether you should deposit via wire transfer or credit card, it might be very different fees. Some exchanges charge a deposit fee of up to a staggering 11% for credit card deposits.
LocalBitcoins’s security score is C, when performing the test at Observatory by Mozilla (https://observatory.mozilla.org/). This is in line with industry average when it comes to top crypto exchanges.
Low trading fees are indeed very important for any prospective cryptocurrency investor. All of the following exchanges also – like the above exchange – have very low trading fees (some of them don’t even charge trading fees at all):