Paxful is a peer to peer exchange that builds on the original decentralised philosophy of blockchain – it claims to be for the “normal” people. The aim is to provide a place where you can trade fairly and with security. Paxful works similarly to Local Bitcoin – being that it allows vendors to list adverts of Bitcoins available for sale. Buyers then click on the advertisement to make contact with the seller and so begins a negotiation.
Paxful was established in 2015 by developers Ray Youssef and Artur Schaback, who are based in Delaware, USA. The site only acts as a mediator between users – providing a space for the Bitcoin community to interact. You can find sellers easily by entering search criteria, including the type of currency you wish to use and method of payment. Open orders will then be listed, and the buyer can choose a suitable vendor by scrolling through and then clicking buy.
This is a simple format for the buying of Bitcoin.
It is user friendly, aimed at making it as easy as possible to buy Bitcoin.
It accepts a range of payment methods including bank transfer, credit and debit card. You can even use gift cards from online stores such as Amazon and iTunes.
Fees can be lower than other sites, though this depends on the payment method.
The seller chooses the fee that the buyer pays for using the service. This tends to vary depending on the payment type and this can end up be relatively expensive.
The trader needs to make use of all the possible resources made available to verify the identity and trustworthiness of the other user.
Live chat customer service responses are reported to be slow.
Payment Methods Accepted
The payment methods accepted is the most attractive feature of the exchange. Paxful offers a lot of flexibility for payment. The means of payment include credit card, debit card, bank transfer and PayPal. Other options include:
- Cash deposits
- Gift cards
- National Bank Transfer
- Western Union
The site can be used anywhere in the world. The only exception to this is the state of New York, where you need a BitLicense for the trading of Bitcoin. Paxful is not limited to a particular region but highlight the US, China, India and Russia on the homepage and in the how to buy sections of the website. Yet, the verification process is only available to Americans, Canadians, Australians and Europeans.
Privacy is difficult on the site. To promote security the site asks users to create profiles that record the reputation of the user. There also needs to be direct communication between seller and buyer, which opens as soon as the buyer clicks buy.
Limits and Liquidity
The minimum amount a vendor can offer is 0.001 BTC no matter what level of verification has been completed. You can become a verified vendor when you have made 50 trades with 20 different partners – but only if the user’s responsiveness is over 33%.
The speed of transaction depends on the negotiation between buyer and seller. In theory, the transaction could be speedy – however – as this is a site for “normal” people who are not used to trading – it may take a little longer. However, as you are trading with a single person it is possible for the transaction to be initiated at a much faster rate compared to other service providers.
Safety is always going to be the biggest concern when using a peer-to-peer trading site. There is the potential for criminals to make use of this trading space and you need to show some caution when selecting the traders that you work with. However, Paxful works hard to make sure that the transaction is as secure as possible – with profiles that communicate the reputation of the traders. There is also an escrow mechanism that allows money to be held by the site until both parties mark the transaction as complete. There is also a two-factor authentication protecting your wallet against hackers.
If you read the forums, then you may be concerned by the large number of mentions of scams and missing money from wallets. The concerns are answered each time by moderators. In other places people celebrate the efforts made by Paxful to verify and secure the marketplace for its users. Using the site is fine it seems, as long as the users take efforts to verify the trader they are partnering with.
The amount the buyer pays is dependent on the choice made by the seller. This can get expensive depending on payment type, with gift cards from digital stores creating on average the highest fees.
The seller pays a set fee of 1%. However, there is also a small mining fee when transferring the Bitcoin from one wallet to another.
Customer support is a particular strength of Paxful. There are many options if you wish to contact the support team. There is the chance to send a direct message, an email, phone or use social media. However, even though the forums are regularly updated, response to the live chat can be slow and intermittent.
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