Is Buying Bitcoin Locally Safe?

Bitcoin was originally invented as a way for privacy minded individuals to make online purchases. 

However, it’s difficult to purchase bitcoin without submitting a photo ID, which does make your Bitcoin traceable.

It’s a problem for many people. And the problem does not have many solutions. 

Fortunately, there are a few solutions out there, but you must know about them. You also must know how to use these solutions without getting scammed.

This article will cover all of that.

Is buying bitcoin locally safe?

First things first, buying bitcoin locally is generally safe. However, there are no guarantees. You must use discretion when making bitcoin purchases via local channels. 

The first step in using discretion is knowing where to purchase bitcoin locally. For instance, you shouldn’t meet someone in a dark alley at night to purchase cryptocurrency.

Anyway, the bigger problem is finding people that want to meet in real life to sell any cryptocurrency. The next section will cover some of the places where you can find these people. 

Where to buy bitcoin locally

Finding sellers that want to meet locally is, for lack of a better term, very difficult. Even on sites such as LocalBitcoins many of the sellers don’t meet in person for transactions. Instead, they prefer to conduct all transactions online, which isn’t really a local purchase. 

LocalBitcoins

LocalBitcoins is the most popular website for making cryptocurrency purchases. Buyers and sellers on LocalBitcoins accept a large amount of different currencies as well, which makes it extremely convenient.

Some, of the many, forms of payment accepted include fiat, gift cards, PayPal, and numerous other options.

Most importantly, LocalBitcoins has an escrow service that makes it somewhat safe. You don’t have to worry about someone not fulfilling their end of the deal with the trustworthy LocalBitcoins escrow service. Nor do you have to fill out any identification forms.

The weakness of the escrow service is that it leaves you susceptible to a chargeback scam. All someone would have to do is reverse the transaction (from the non-bitcoin end). 

You can prevent this scam by reading seller and buyer reviews, but that is no guarantee that you will not be scam. It only indicates that no scam has been committed in the past.

With those points in mind, LocalBitcoins is by no means a bad platform and one that we do recommend for local bitcoin transactions. However, it does have a few problems that make it less than ideal. The only exception is if you can find someone that wants to meet up locally to make a bitcoin transaction with cash.

You can’t reverse a cash transaction. Of course, that opens you up to robbery – unlikely, but possible.

Bitcoin ATMs

Have you seen an ATM with the Bitcoin logo on it?

You probably have. Those ATMs are in almost every major city.

And they are a great place to purchase bitcoins. You simply insert cash or credit card into the machine, scan your bitcoin wallet QR code, and the bitcoin will transfer to your account.

It’s fast, easy, and anonymous (if using cash). So, what’s the catch?

Bitcoin ATMs have high fees and terrible exchange rates – safety isn’t cheap.

We only recommend bitcoin ATMs if you have a huge concern about safety or don’t trust the LocalBitcoins sellers in your area. The fees are simply a little too high to make it worthwhile for most buyers.

Craigslist

Yes, you can buy bitcoin on Craigslist.

We know it sounds strange, but it is possible. Just about every major city in the United States has someone that sells and buys Bitcoin.

Is it safe? Trustworth? Reliable?

We can’t say as that depends on each seller.

All we know is that people do sell Bitcoin on Craigslist every single day, so it is an option if you’re desperate.

How to Stay Safe When Buying (or Selling) Bitcoin Locally

Here are some of our tips for staying safe when purchasing Bitcoin locally. As we mentioned earlier, it is generally safe, but scams do exist.

Meet in a Safe Location

If you decide to physically meet someone to purchase bitcoin, then meet them in a safe location. That location should be public – Starbucks, McDonald’s, or other fast food restaurants and cafes are good choices. 

Make sure there are people and cameras around. And try to write down their license plate number if they arrive by car.

Avoid Chargebacks

If you use LocalBitcoins, then you can accept many different forms of payment if you sell Bitcoin.

However, you probably don’t want to use many of these options. PayPal, Venmo, bank transfers, checks, and gift cards can all be reversed due to fraudulent use. 

In fact, a common scam is for a scammer to purchase bitcoin with a stolen PayPal account or gift cards purchased with a stolen credit card. 

The PayPal transaction will be reversed weeks after you have completed the transaction, which leaves you with no money and no bitcoin.

We recommend a wire transfer because wire transfers cannot be reversed.

Don’t Prematurely Release Bitcoin

A surprisingly common scam on LocalBitcoins is for the other party to demand that you release the bitcoin before the payment has cleared. 

This scam sounds simple and easy to avoid, but it works often enough that it’s worth mentioning:

Don’t release bitcoin from escrow until you have received payment. The bitcoin transaction cannot be reversed. 

Final Thoughts

Well, that covers it for purchasing bitcoin locally. 

It’s not a complicated nor difficult process. However, do we recommend it?

No, not really. It’s extremely easy to purchase on Coinbase for a very low fee, so we recommend that. 

If privacy is a concern, then you should seriously consider switching to Monero as it’s a much more secure cryptocurrency. Alternatively, you could send your bitcoin through a tumbler to make them anonymous.