The Story
Hey guys, this will be my first post on Steemit and I'd like to document on what it was like to buy 3k USD worth of Bitcoins through LocalBitcoins.com with cash. I realize that many people aren't comfortable with registering with exchanges like Coinbase for various reasons. For example, most of those exchanges have a KYC (Know Your Customer) protocol/process where businesses wish to identify and verify the identity of their customers. Some people may think it's inconvenient. Another issue with such exchanges is that they often require a bank account or debit card. I know of some young friends who are interested in obtaining Bitcoin, but don't have a convenient method of getting them.
Thus, if you're someone who has some of those issues and doesn't have a BTC ATM lying around them, you can hop on LocalBitcoins.com and register without verifying your identity. It can be a safe way to obtain bitcoins with cash. Also, the transaction will nearly be instant. (Note that the seller sends the BTC onto the website wallet and the BTCs will be sent internally within the system to your LocalBitcoins wallet. Thus, there is no need to wait for confirmation times when you hand the cash over.)
My Experience
Just recently (June 4th, 2017) I wanted to buy some BTC locally. (Note: I do have a Coinbase account and I frequently buy bitcoins on there, but I wanted to test out LocalBitcoins.com). Let's just say I had 3k USD lying around (from working part-time jobs). I wanted to get my BTC quickly and I did not want to wait 5 business days for Coinbase to send me my coins.
I live near Providence, RI, so I looked up In-Person Cash options in the city.
Note that these prices do not accurately reflect the what I bought BTC at. I believe that the rates were ~2750 USD. BTC's price suddenly rose today (June 5th).
At first I messaged USMC1991, but he had stated that he was out of BTC for some reason. Next, I decided to go with snowgreg. For LocalBitcoins, you want to buy from sellers who have a lot of transactions under their belt. snowgreg has done over 1000+ transactions and has a 100% positive rating.
In addition to messaging him through text, I also messaged him through the LocalBitcoins.com chat. If you're really wary about keeping all your information including phone number private, then this will suit you.
snowgreg and I decided to meet in a Starbucks on Thayer St. I got there early and he got there on time. Here are some of our text messages.
I was sitting down with my laptop on a Starbucks chair. He came and shook my hand and told me "I'm Greg, nice to meet you", and I said "I'm Turtle, and the pleasure is mine." Okay I actually just said my real name and "nice to meet you too".
Anyways, we just sat in the Starbucks cafe and I surreptitiously handed him my 3k USD. He told me there was nothing to worry about and I loosened up. I was paying in hundreds and he had a counterfeit money detector pen which he was using to mark the hundreds. I asked him about his life a little while he was doing that and he told me he got into Bitcoin to possibly protect his company from ransomware or something of that sort. Eventually he got on LocalBitcoins and it became his hobby to sell BTC to strangers.
Anyways, he got his 3k and he released the BTC to my LocalBitcoins wallet. The transaction was instant and everyone was happy. Note that the Seller has to fund the wallet on the LocalBitcoins wallet before the meetup. I receive a special code that only LocalBitcoins shows him after he officially sends the BTC After the cash is exchanged, he officially releases the money and reveals the matching code. Everything is instant and satisfying. I still text the guy to this day.
Here's some of our chat log on LocalBitcoins.
As you can tell from the image above, the BTC was first funded with his wallet and then released. LocalBitcoins has a case where you can safely get your BTC in case the Seller runs off with your money.
I payed the current price of BTC * 1.1. For example if the price of BTC on Coinbase/GDAX was 2500, then I payed the guy 2500 * 1.1 or 2750 USD per BTC. I don't consider that a bad deal since the price is now currently $2890 on GDAX as I'm writing this post. The amount of BTC I got was roughly around 3000 USD divided by 2750 USD/BTC or ~1.05 BTC.
I know that a 10% markup is unattractive, but there are some other people who offer a smaller markup rate such as 5% or even less. Other exchanges also have a fee ranging from 1-2.5%. The seller needs some incentive to sell his coins and there is an incentive for the buyer to buy coins on LocalBitcoins.
To clarify, you pay for a certain amount of BTC that you want in USD and whatever the price is at the time, the seller will send you BTC at that rate. There are some sellers with better rates than others and people willing to sell 100-10,000 USD worth of BTC.
Summary
In the end, I got what I wanted and my new friend snowgreg also got what he wanted. LocalBitcoins is definitely one way to obtain BTC if you don't have any other options. Just make sure the sellers have a good reputation on LocalBitcoins. I doubt someone would risk tarnishing their record just to run off with some money. So if you want to avoid going through through an exchange and have some cash lying around, LocalBitcoins is the way to go.
If you have any questions or comments, feel free to post below and I'll be happy to respond to your thoughts.
I know about it, it is really a good site.
I have a nice experience in that page, and of course I would recommend that page to everyone who lives in any part of the world!
BUT if there's an advice I would give to the ones who enter in this page is CHECK THE REPUTATION OF THE BUYER / SELLER. It's important that the person you're going about to buy or sell BTC have a solid reputation and REAL reviews that back him/her as an honest buyer/seller. If you go to the first one of the list and that person didn't have a good reputation, then you are at the risk of loosing you money and being scammed.
Solid experience review. This is some good advice on how to handle using LocalBitcoin, and in the future LocalEthereum
Its a very good option for fast Bitcoin too. With Gemini and Coinbase taking 5 days to a week to move money, sometimes getting in on those unicorn ICOs needs a faster transaction, and LocalBitcoin can achieve that.
Thank you for a candid reply! I did need that extra money for ICOs immediately! I'll be sure to check out LocalEthereum and post more about cryptocurrencies
awesome! Welcome to Steemit ! As promised in Steemit chat , upped , followed and resteemed !! Heres a link to my post , if you would like to up vote and res teem me back ! Thanks !
https://steemit.com/steem/@karenmckersie/hello-power-shack-i-turned-1300-steem-on-poloniex-into-usd2573-00-canadian-plus-i-hit-900-followers-yippee-lets-celebrate
Great article! I saw your post on the DCR Slack channel and thought I'd check it out. I've always been curious about using this site. Haven't had the guts to try it myself. Thanks for the walkthrough! Hope to interact with you more here and on the DCR Slack.
Glad to have you join us! Cryptocurrencies are really booming right now and I think we should all work together.
Welcome to the wonderful world of Steemit my PIVX loving fellow :P
A few tips: make some friends on steemit.chat and ping them with your blog post links from time to time, also post your post to reddit.com/r/steemit, also post your link in the steemit discord channel as well as in steemit.chat within the postpromotion channels and so on that way people get a better chance to see it.
Ps; followed and upvoted! Welcome!
Thanks this means a lot to me. I'll be sure to learn as I go.
I'm on steemit.chat as 'tdg' by the way. Or just ping me in PIVX slack with links you got my votes!
Haha! I'm kyungjae.choo on the steemit.chat! Sure you got my votes. Seems like you're doing EXTREMELY well though!
https://steemit.com/@thedashguy is my old account ;]
Oh and its alot more profitable to post about 9 hours or so from right now, like 8am-11am PST btw
I figured that, but I worked long and hard and decided to post it when everyone was sleeping :(
Hi @kyungjaechoo ! This post was really interesting it took me a little but to go through it but i will definitly check out localbitcoin thx for that. P.S. Followed =D
Hey thanks! I'll be sure to improve my writing skills and give people bite-sized pieces of thoughts. Thanks for the comment!
nice post thanks for sharing
Nice Article and Thanks for sharing your experience. Over the last few years I have been very luck to connect with people that actually pay me 5% when i give cash for Bitcoins. If you are in California or the Midwest let me know and I can hook give some more info.
Its a win win for both of us and a pure cash -> Bitcoin transaction can happen withing minutes in person. We usually agree on 3-5 confirmations before handing the cash, but after a few deals you can build up a trust and streamline the process.
Cheers Yahl
Thanks for walking me through that process. I'm just about to start selling here in Halifax, Nova Scotia.