There are multiple ways of acquiring bitcoins these days. One of them is doing so by meeting the seller face-to-face and exchange bitcoins for cash. Though such personal encounters provide the highest level of confidentiality there are some hidden dangers you should be aware of. Unlike traditional goods and services, some nuances of bitcoin trade are still not intuitive for new buyers.
Below you will find recommendations for a safe bitcoin purchase from local traders.
Meet in public places
Buying bitcoins locally for cash carries certain risks – therefore better do it in busy, public places with high level of security, cameras and people around. Large cafes, shopping malls or guarded city parks are some good options. Unless you know and trust the seller from previous interactions never agree to meet them at home or in unknown locations.
Wait For the First Confirmation
Bitcoin transactions are irreversible – once the payment is made, there is no way to cancel the deal. However, during the authentication process which takes about 10-15 minutes, it is still possible to call it off and some dishonest sellers might want to take advantage of the situation. It is, therefore, recommended to ask the other side to wait at least until the first confirmation is completed. This will provide a certain level of credibility and increase the chances that the rest of the confirmations will be approved as well. Obviously, waiting for the entire amount to be transferred would be best; however, this may take way too long. Therefore, it is reasonable for both traders to ensure that the first transaction has been accepted.
Use Localbitcoins.com Escrow Service
The escrow service exists to protect both the buyer and the seller from scams when making a virtual bitcoin trade. Using localbitcoins.com escrow program ensures that once the payment has been accepted, the seller cannot refuse sending the bitcoins to the buyer’s account. For one-on-one trade Localbitcoins.com also offers transaction service – to enhance security and confidence during cash exchange. The BTC/cash trade protection system is based on verification code which is sent to the buyer and the seller. After the buyer requests to purchase a certain amount of bitcoins he receives a secret transaction code. Once the two counterparts meet in person, the seller must demonstrate the same code as a proof that the BTC have been released to the buyer’s digital wallet. When all is settled the buyer is paying the agreed amount in cash.
This simple authentication method is helpful even for experienced users, not to mention first-time traders.
Bitcoin has been on the market for several years now. However, the buying and selling process of this digital currency is still new to many people. There are many over-the-counter marketplaces websites helping buyers and sellers find each other, and it goes without saying that you need to take all the measures of precaution when trading with an unknown individual, just like you would do with any other good or service.