Buying Bitcoin can be a difficult experience. If you’re not careful, you can overpay or lose your money in the process. While there are many good ways to buy Bitcoin, most of them require a long process of signing up for the exchange and waiting for bank transfers to clear.
Centralised services like Coinbase work well, but they have limits on the amount one can purchase.
People coming into Bitcoin may wonder if there is an easier way to buy Bitcoin, one that doesn’t involve long sign-up processes and strict limits on trades.
The answer is that there is a peer-to-peer marketplace, in the spirit of Bitcoin, which allows for any payment methods to be used, including Paypal, which this guide will focus on.
Sign Up and Start Trading
Obviously, the first thing you need to start buying Bitcoin with Paypal is a Paypal account. You also need a LocalBitcoins account. You may at some point have to verify your personal information with the exchange, but the process is much less invasive than other online exchanges, and no bank account is required.
Find The Right Price
The next thing you’ll want to do is filter the advertisements to find one that is selling Bitcoin for Paypal. You can use the filtering tool in the upper portion of the website to do this.
Now you’ll want to have a look at advertisements in your price range. You’ll notice many of them have minimum purchases. The higher the minimum purchase that you can afford to satisfy, the better the prices you will find.
People buying and selling small amounts of Bitcoin tend to do it at a higher price. To get an idea of what you should be paying versus what people are charging on LocalBitcoins, you can go to Preev.com and see the current average across exchanges.
Make the First Move
When buying Bitcoin with Paypal, you will have to send your payment before you can expect your currency to be released by the seller. There is a dispute process that can be used with the LocalBitcoins support staff if you have a problem, but ordinarily, it’s in the best interest of both parties to carry a trade through to its faithful completion.
As such, all you need to do is send payment to the correct Paypal address and then inform the seller that you’ve done so. They should release it within 15 or 20 minutes after that.
Tips of the Trade
Get Good Feedback
LocalBitcoins works like eBay or any other peer-to-peer marketplace – the feedback system is everything. Creating a new account and trading on LocalBitcoins means that you will be an unknown quantity and will need to put some time in before you can expect traders to automatically trust you. The seller, after all, is the one taking all the risk.
If you happen to be using a hacked Paypal account or have some other means to scam the system, then it is the seller who will lose their money, not you. That is why it is advisable to do several smaller trades at first.
You can’t expect to get the best rates when first starting out, but by doing small trades and showing multiple people that you are serious about your trading, you’ll build up a positive feedback profile faster.
Answer any special questions the seller might have for you, and be forthcoming in all interactions. Follow directions – if they say you need to scan and send a copy of your identification, then that’s what you need to do.
Going the extra mile and helping your sellers check whatever boxes they need for their process is a path to getting good reviews and thereby increasing your trade volume.
Use Good English
Although LocalBitcoins is growing around the globe, English-speaking locations still seem to dominate trading, especially in Paypal and other Western-style second-level payment solutions. Therefore, it is helpful in peer-to-peer Bitcoin trading to use good language skills.
If you don’t understand what someone is saying, ask them to clarify or use a translation tool. Avoiding misunderstandings is the best way to avoid problems and bad feedback.