Four Different Platforms To LocalBitcoins For Bitcoin Exchange Pairs

Days ago criptonoticias published a very important subject about the big alternatives that exist in the cryptocurrency market around LocalBitcoins. We found that information very important to share with you, and we have translated it in order to give continuity to some important issues for those who are entering this new world.

Key facts: (a) among the options available are platforms with and without custody; (b) a disadvantage of these alternatives, compared to LocalBitcoins, is low liquidity.

One of the most popular peer exchange sites in the bitcoin ecosystem is currently LocalBitcoins. But this platform, based in Finland, has been the epicenter of multiple controversies.

LocalBitcoins has made quite questioned decisions in recent months, such as the withdrawal of the option of personal exchanges for cash, without prior notice; or the constant increase in the requirements of personal information to its users in order to satisfy the regulatory requirements in the Finnish jurisdiction.

Particularly, the controversy became stronger weeks ago, when the platform froze the accounts of its customers without prior warning and providing little or no response. The event covered more than a dozen countries, including two Latinos: Panama and Puerto Rico.

LocalBitcoins is one of the most popular sites for the exchange of bitcoin between peers, although it is not the only option to perform this type of operations. The activity on the site has recently declined and its exchange volumes have been reduced considerably.

Particularly, it is presumed that the extension of the demand for personal data through its Meet Your Customer (KYC) policy, coupled with the freezing of accounts, has meant that part of its users have chosen to operate on other platforms.

If you are among those affected in Panama, Puerto Rico or any of the other 20 countries in which LocalBitcoins froze accounts, this list can help you continue trading with bitcoin and national currencies, negotiating directly with other users.

Paxful

One of the main competitors that LocalBitcoins has is Paxful. This platform has been gaining ground recently. UsefulTulips data show a constant growth in exchange volumes, approaching USD 30 million per week in recent months.

This situation contrasts precisely with the behavior of the market in LocalBitcoins, which in the last months has fallen significantly. Even in November last year, it was reported that localBitcoins trade volumes fell to levels that had not been seen since August 2017.

Now, updating UsefulTulips data, we can see that the first week of January the global trade of the platform barely exceeded USD 28,000,000. The difference with Paxful that week was just over USD 5,000,000. At the beginning of 2019, Paxful did not even trade half the volume of LocalBitcoins.

But, let’s talk particularly about Paxful, beyond its growth. This platform is characterized by peer exchange, such as LocalBitcoins. However, one of its peculiarities is that the exchange market of the platform is full of options with gift cards or balance in payment gateways, such as PayPal and other similar.

In fact, a report presented in November by the creator of UsefulTulips.org, Matt Ahlborg, explained how gift cards and remittances were a fundamental part of the commercial movement in Paxful. In that sense, countries such as Nigeria stand out, where the exchange site is used to send remittances using gift cards purchased with BTC.

When reviewing the offers, at the time of this writing, a great variety of possibilities is observed. In addition to the most recognized, such as Amazon, Steam, Google Play or Walmart, there are exchange offers with gift cards from Best Buy, Starbucks, eBay or iTunes, to name a few.

It is worth noting that the offers to sell BTC in exchange for gift cards have rates considerably above the bitcoin market price.

The platform also offers the possibility of exchanging BTC for cash or bank transfers. The drawback, and this is something that Paxful shares with other alternatives, is the low liquidity. When looking for bank transfer options in Panama or Puerto Rico, offers do not reach ten in each country.

Additionally, if you want to know in depth the mechanisms to operate in Paxful, you can take advantage of this tutorial to use this platform.

Hodl Hodl

Another option to exchange bitcoins with other users is Hodl Hodl. This platform has just turned two since its launch, and has been gaining popularity within the ecosystem.

Among the main features of Hodl Hodl, the fact that no funds are stored in any portfolio of the platform stands out. In LocalBitcoins, each user must deposit on the site in order to sell BTC.

When buying, the funds are also received within the platform. While in Hodl Hodl the funds received will go directly to the address defined by the user.

This is done directly. At the time of opening an exchange, the platform creates a contract with a multi-signature portfolio as a mechanism to ensure the sending of funds in BTC to those who acquire them in the exchange.

This feature, together with the anonymity that allows its users, have been generating greater popularity for Hodl Hodl, especially when contrasting this possibility with the continuous increases in the KYC policy of LocalBitcoins.

Hodl Hodl has also been gaining ground due to the alliance with the Bluewallet wallet for the exchange of bitcoins via Lightning Network. However, as of the writing of this article, the platform still does not allow exchanges with lightning network.

As in the case of Paxful, the biggest disadvantage of Hodl Hodl is its current lack of liquidity. However, it is an option to trade with BTC, especially in countries blocked in LocalBitcoins. Liquidity could increase as more users start operating on the site.

To learn how to use the Hodl Hodl platform, here is a guide published earlier in Crypto News.

Bisq

The next platform we will review has much lower exchange volumes than LocalBitcoins or Paxful, if we review the tracking data available in Coin Dance.

To get an idea, according to Coin Dance the best week recorded to date in Bisq was the last one in June 2019, with a total trade equivalent to less than USD 11,000,000. Last week, the total figure did not even reach USD 1,000,000.

However, there are several highlights of Bisq. Among them, we can mention that, as in Hodl Hodl, on this platform users maintain their anonymity. The funds are also deposited as collateral in a multi-signature portfolio.

Unlike other platforms, Bisq users do not log in through their website’s browser. On the contrary, they must download and install the application on their computer and connect to the network.

This is another of the most outstanding features of this exchange platform, since the connection through the Tor browser guarantees greater privacy in operations.

LocalCryptos

Finally, we will talk about the LocalCryptos platform. This P2P exchange site was originally called LocalEthereum. There could be operations only with the native cryptocurrency of the Ethereum blockchain, ether (ETH).

In November 2019, the LocalEthereum team announced that it would include support for exchange of other cryptocurrencies and would be renamed LocalCryptos.

To date, the platform only allows operations with ETH and BTC only, although the plans include the future inclusion of other assets. Particularly, the LocalCryptos team referred to the most popular Ethereum-based tokens.

A particularity of LocalCryptos in its system is that the user controls the private keys of his web wallet. In addition, interactions between users are encrypted from end to end, ensuring greater privacy.

As for liquidity, there are various exchange offers in Panama. However, when filtering the search for another of the affected jurisdictions with accounts frozen in LocalBitcoins, Puerto Rico does not yield any results.

Conclusion

Yes, LocalBitcoins is not the only option for peer exchanges in the bitcoin ecosystem. Even some of the alternatives have clear advantages over this platform.

Despite this, volumes and, consequently, liquidity, continue to benefit LocalBitcoins compared to the competition.

But, if your account at LocalBitcoins was frozen or the restrictions on that platform keep you from operating on it, some of the options we have reviewed could be interesting.

See you in the next review! With love 💛 Rubika Ventures Team!

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