I’ve been trading Bitcoin for a while now and believe that traders should be as reliable and trustworthy as possible. It’s a big ask to send money to unseen and unknown people and I’ve resolved to make it as painless as possible.
I do all my trading through localbitcoins.com as they provide an escrow service. This means that as soon as you start a trade, the bitcoins involved are locked until the deal’s done.
Localbitcoins is the only site I’ve found that allow you to buy and sell bitcoin as a normal consumer. All the other sites require you to jump through hoops to become an established seller, which isn’t ideal if all you need to do is dispose of a small amount.
Here’s the procedure :-
- Get yourself a wallet at localbitcoins.com, register an account, then verify your email and mobile number.
You’ll need both of those, as notifications come via email and text message (free). Make sure you enable two factor authentication on your account. I use printed codes but you can use Google Authenticator if you’re running an android phone.Tip – if you have trouble authenticating with the google app, go into the settings, click “Time correction for codes” then click “Sync now“. All should be well and authentication should now proceed correctly.
- Find a suitable “Buy” advert, there are many to choose from. Most people go by price
Tip – the numbers by each traders name represent number of trades and level of positive reputation, i.e. 100+, 100%. Be aware that anything less than 100% reputation is potentially a warning sign. You may be lucky, but then again … Stick to 100% and you shouldn’t go wrong.
- After clicking on the desired advert, enter your required amount in bitcoin (btc) or GBP (£). Either will do, it will automatically populate the other box. Enter a message if you would like to be polite to the trader, then click “Send trade request“.
Sending an initial message helps to ensure they are ready to trade. You don’t want to send money to somebody who won’t be back for a few hours. If they message back promptly, then you are good to go. If not, then you can always cancel the trade before sending any money.
- Using the payment method and details now displayed on the page, make your payment.
When you’ve finished, click the “Mark payment complete” button on the trade page. Only do this if you really have paid !
- The trader will check to see if the funds have arrived, with the correct reference number, and if so, they will release the bitcoins from the escrow, which puts them directly into your wallet. If there is a delay, then don’t worry about keeping the web page open. You can see all your current trading activity displayed on your Localbitcoins Dashboard. From there you can go directly back to a trade in progress.
- When the bitcoins have been released from escrow, you can leave feedback about your experience with this trader. Don’t be shy, they are doing the same about you !
- Now the bitcoins are in your wallet, you can do whatever you like with them. Using your Wallet link, you can send them to your own wallet on your mobile or PC, or directly to an address of a third party who you wish to pay in bitcoin. Simply enter the destination address, the amount and click “Send from wallet“. If you have two factor authentication enabled, you’ll need to enter the relevant number there too.After a little while, the bitcoin will show up at the destination. Usually there is a small fee involved when sending, but rarely more than about 3 pence.Most people regard 6 confirmations as final when transferring bitcoin, which means that everything is good.
The confirmations are needed to ensure that the bitcoins aren’t being spent twice. The blockchain keeps a record of all transactions, and this takes time to be examined.Confirmations occur when the particular bitcoin miner checking the transactions agrees with the figures. So 6 confirmations means six separate computers have calculated the blockchain and all have agreed it’s correct. It takes about 20 to 30 minutes which is not a problem if you are buying something for delivery in a few days, or just sending cash to someone across the world.
And that’s it. You’re done
Most of my trades are completed within 4 or 5 minutes, and some only take 1 or 2. Because the bitcoin don’t leave the localbitcoins site during the trade, they are moved instantly from the traders wallet into yours.
Enjoy your bitcoin, and welcome to digital currency