Many people use peer-to-peer crypto marketplaces rather than centralized crypto exchanges. This is because P2P crypto exchanges support payment methods that traditional crypto exchanges do not.
However, it can be confusing to decide which P2P marketplace is best for your needs at any given time.
Sitting at the top of the P2P crypto marketplace pile are Paxful and LocalBitcoins, and this is how you choose between them.
Paxful is one of the world’s top marketplaces for P2P crypto trading, allowing you to buy or sell cryptocurrencies using different payment methods compared to a regular crypto exchange. Paxful is available worldwide, bar in a few countries and regions where residents cannot use it for regulatory reasons.
LocalBitcoins is a leading P2P marketplace for trading Bitcoin. It is a global marketplace for anyone to buy or sell Bitcoin using various payment methods. Unlike Paxful, though, LocalBitcoins only supports the trading of Bitcoin and not any other crypto asset.
LocalBitcoins is globally available and can be accessed from any part of the world where its use is supported.
Paxful vs. LocalBitcoins: Supported Countries
Paxful is available in most countries of the world, including the US. The countries where it is unavailable are very small, some of which are just regions in other major countries.
Therefore, if you live in any recognized country, chances are you can use Paxful to buy and sell cryptocurrencies.
Like Paxful, LocalBitcoins is also available in most countries of the world. However, it isn’t available in the US, China, Indonesia, Syria, and North Korea for regulatory reasons.
Overall though, Paxful has more coverage than LocalBitcoins, so it is better in this regard.
Paxful vs. LocalBitcoins: Supported Assets
It is important to consider the available assets on a marketplace before choosing which to use.
- On Paxful, you can buy and sell three cryptocurrencies: Bitcoin, Ethereum, and Tether (USDT).
- LocalBitcoins only supports the buying and selling of Bitcoin.
In terms of supported assets, Paxful wins because it offers more variety, making it easier to use and even convert from one cryptocurrency to another. That said, neither Paxful nor LocalBitcoins offers the same volume of currency pairings you’ll find on a regular crypto exchange.
Paxful vs. Localbitcoins: Fees
Fees are a very important factor when choosing the platform to use for your P2P crypto trading. For both Paxful and LocalBitcoins, registering, buying, and selling assets is completely free of charge.
However, the sellers decide the rates, which are usually higher than the market rate of the assets. Note that the rates for buying Bitcoin are generally lower on Paxful than on LocalBitcoins.
For both marketplaces, on-platform transactions are free. However, Paxful charges a 1% fee or $1 (whichever is more) for such transactions after the cumulative monthly transaction exceeds $1,000.
For transactions to external wallets, a flat fee is charged on LocalBitcoins, but on Paxful, that fee depends on the amount sent. You can see the sender’s fee on the wallet page in both cases.
Paxful Sending and Receiving Bitcoin
|External Wallet||$0 – $9.99 = 0.00008 BTC fee $10 – $19.99 = 0.00016 BTC fee $20+ = 0.0004 BTC fee||no fee|
|Internal Wallet||Up to 1,000 USD per month for free (between all cryptocurrencies) After 1,000 USD is reached, a fee of 1 USD or 1% of the amount being sent, whichever is greater, is applied||no fee|
As Paxful also supports Bitcoin, Ethereum, and USDT, a 0.5% conversion fee also applies for converting from one crypto asset to another.
Therefore, LocalBitcoins has fewer and lower fees and is more affordable to use than Paxful, so it wins in this regard.
Paxful vs. LocalBitcoins: Security
Security is another critical factor to consider in choosing which marketplace to use. You wouldn’t want to risk buying Bitcoin and losing it to a fraudulent seller or dealing with people of questionable character, right?
Before we go into the security of the two platforms, please note that your assets aren’t secured on any of them for long. We advise moving your assets to a secure cold wallet as soon as you acquire them to avoid possible losses.
Having said that, both Paxful and LocalBitcoins use an escrow account to ensure there is no fraudulent trading and also have a system in place to resolve fraudulent cases. Both platforms also deal with verified users only.
You need to be verified to access any service, and how much you can trade depends on your verification level. In addition, your trading rates depend on how trustworthy you are in terms of verification and trading record. If you have a poor rating, those offering the best fees may choose to refuse your trade offers.
In addition, Paxful introduced a security deposit feature in 2021, which requires any intending Bitcoin seller to deposit an amount as security. This makes them commit to the trade and reduces the chance of fraud.
LocalBitcoins, apart from two-factor authentication (2FA) and other measures, also has a security bounty in which it rewards white-hat hackers for uncovering security vulnerabilities in its system. All this helps to secure the marketplace.
Historically, Paxful has never been hacked, while LocalBitcoins suffered a hack that led to the loss of user funds in 2019.
Paxful vs. LocalBitcoins: Customer Support
Although it’s rare, there is a chance that disputes will arise in the course of using a P2P marketplace. If this happens, you need responsive customer support to resolve an issue.
Paxful has many methods of reaching its support team, including email and social media handles. However, the most effective and fastest way is by using the 24/7 Paxbot chat on the website, which is very responsive.
You can get in touch with a human agent within seconds if you wish to, which is remarkable.
For LocalBitcoins, you can fill out a form with details of your issue, and you will get a response between one and three business days. Although it may take a similar amount of time or even longer for Paxful to resolve issues, the fact that you can have a live chat always feels better.
Therefore, in terms of customer support, Paxful wins.
Paxful vs. LocalBitcoins: Verdict
Considering all the critical features of these two P2P marketplaces, it is clear that Paxful is a better choice if you don’t mind the slightly more expensive crypto trading fees.
It has more assets and is available in the US and other major countries where LocalBitcoins isn’t available. You can also trade Ethereum and USDT in addition to Bitcoin, making it more flexible.