When Bitcoin’s software was released back in 2009, it would cause a big shift in the digital world, and bring on a new form of money, and currencies.
Since then, there have been hundreds of different cryptocurrencies, and platforms all dedicated to the world of virtual currencies. With cryptocurrencies on the rise, there have been further advancements to simplifying the path to entering into the world of cryptocurrencies.
Jumping into the buying and trading cryptocurrencies is becoming easier and simpler by the day with the growth and rise of exchanges.
A variety of exchanges have popped up over the years that serve a variety of customers in different ways, addressing needs in an unique manner.
Today, we’ll be briefly covering what an exchange is and then we’re going to be doing an in-depth dive into an exchange based in the state of New York, an exchange called Paxful.
What is a Cryptocurrency Exchange?
So maybe you’re interested in buying cryptocurrencies like Bitcoin, or maybe you’re just trying to learn everything about the cryptocurrency world and you’ve wound up looking at exchanges.
Before jumping too deep right away, you need to know exactly what a Cryptocurrency Exchange is.
A cryptocurrency exchange is a platform (typically) held online, where you can exchange one type of cryptocurrency, for a different cryptocurrency.
Or you can choose to exchange fiat money (currency backed and controlled by the respective government) like U.S. Dollars, or British Pounds for cryptocurrencies like Bitcoin and Ethereum.
Some exchanges are more like a brokerage, where people can buy and sell their currencies at a fixed price that’s set by the brokers.
These are usually always set to a market price, and usually with some type of small premium. Some examples of brokerage like websites for cryptocurrencies are Coinbase and Shapeshift. Or, you can find a direct trading platform.
A direct trading platform is a peer-to-peer system where individuals set their own rates for what they’re willing to buy or sell for cryptocurrencies.
This is often not a great option for a lot of people, but due to region limitations, it’s sometimes the only choice some individuals have.
However, both of these types can pose some problems. Many of these places are region restricted, meaning many users from different countries can’t use the platform. If you’re from a country that doesn’t support it, you don’t have that option.
Another big problem that can come up is a limited amount of accepted payment methods. Not everyone uses the same payment methods, but some work better for others, but it means nothing if it’s not accepted by the platform you’re trying to use.
So if these obstacles get in your way, what are some other things you can try?
Paxful is another type of peer-to-peer marketplace for buying and selling Bitcoin. As noted earlier, Paxful is an exchange that is based in the state of New York, in the United States of America.
Paxful is also described as a “universal online wallet.” Paxful is a massive network of these buyers and sellers, many of which will have reputations to check for trustworthiness, and you can view their exchange rates easily.
One really great thing about Paxful, is that there are over 300 accepted payment methods for their platform. Some of these accepted payment methods are :
- Amazon Gift Cards
- Any type of Credit of Debit Card
- Cash Deposits
- Western Union
These are only a tiny amount of all of their accepted methods. This is a great benefit if your preferred payment method isn’t something widely used like Paypal.
At its simplest, Paxful works like this. The user would pick out how much Bitcoin that they would like to purchase, then choose the currency that they are exchanging it for, and then proceed to pick out their payment method from the large list of choices that Paxful provides!
To Sum Up:
Paxful is a peer to peer marketplace that helps people buy and sell Bitcoin.
Paxful is unique because it provides a variety of methods for people to transact, allowing for more people to get involved and have larger choices to exchange Bitcoin.
If you find yourself primarily dealing with Bitcoin, you will find that Paxful might be highly relevant because of its variety of options for transaction purposes.
Buying with Paxful
Now that we know what Paxful and how it uniquely serves its users, let’s dig a little deeper into how Paxful works.
Let’s say you’re someone who’s planning to buy some Bitcoin, and you’re about to go through the process of using Paxful to do this, let’s run through what the process of buying bitcoins on paxful looks like, step by step.
As I mentioned earlier, the first thing you’ll do is select your desired payment method. These payment methods can vary from Paypal, Debit Cards, Western Union, Amazon Gift Cards and much more.
These variety of options allow for either privacy, speed or more choices. What we mean by more choices is that, depending on the payment method that you choose there might be more or less offers of sellers of Bitcoin.
Once you’ve chosen your payment method, you’ll enter in the amount Bitcoin.
After choosing the amount of Bitcoin that you want to purchase, you will quickly choose which fiat currency you want to purchase it with, this can be Euros, Dollars, or others.
Then you will go on to the next part of the process, you’ll see a variety offers at different rates.
One thing to keep in mind as you progress on your Paxful journey is that typically when you’re buying Bitcoins on Paxful, these prices are going to (usually) be higher than if you were to buy them from say, a brokerage like website.
This happens because selling on websites like this can be a bit more dangerous for sellers.
In some cases, a buyer may not mark the transaction complete, and will not pay, causing the seller to not only lose money they were owed but also their bitcoins as well.
By charging higher prices, they have a bit more of a safety cushion in case a transaction goes bad.
Now, after searching around for a seller that you feel is offering the best price, and seems trustworthy enough, you can look into their terms about trading and transactions. You should always read their terms so you know exactly what they’re asking for, and get a better idea of what you can expect from the transaction.
A few things that you want to watch for range from the duration period and other aspects respective to the seller (such as how long you may need to wait, or special instructions, etc.).
When you’re ready to buy, you’ll click the “buy” button and then the sellers’ bitcoins are moved to the Paxful “escrow.”
An escrow is a service that stores your funds into a safe deposit account. This keeps the money under the control of an independent third party to protect the buyer, and seller of the transaction by making sure the money is safe until all of the requirements for the transactions have been met.
It’s a sort of safety net. However, not all systems are perfect, which is why some sellers and buyers can run into problems leading to higher prices from sellers.
After finding your seller, and choosing to buy from them, eventually, they’ll get back to you with further instructions or other information you need to continue with the transaction.
When you’ve placed your payment, you can click on an “I have paid.” button, and after the seller has verified that they’ve gotten the payment, the bitcoins from the escrow will be sent to your Paxful Bitcoin wallet.
Selling with Paxful
Now, it is very possible that you’d much rather sell your bitcoins, and so are not interested in being a buyer. So how do you get started with selling bitcoins through Paxful?
For starters, you’ll need to make sure that you’ve actually got the necessary amount of Bitcoins in your Paxful wallet to start selling. Assuming you already have an account, you’ll want to click into your wallet. Here you’ll see your wallets balance, which might be zero if you’re just getting started.
Somewhere on this page, you’ll also see your wallet address. Kind of like the address for a bank account, but it’s for your Paxful wallet! However, you can generate new wallet addresses, some people choose to do for better privacy or security reasons.
After you’ve added some Bitcoins into your wallet, you can get ready to sell them! Just like when you go to buy bitcoins, you can choose what type of payment methods work for you in selling them too.
When you go to sell them, you’ll be able to be more specific about how you want your transactions to go. You will have the options to do the following things:
- Choose your currency.
- Select your payment method.
- Choose your country. (This is important if you’re doing bank-like transfers.)
- Choosing your Price Margin.
- The length of the Payment Window.
- Your terms for your offers. (For special instructions, like requiring an ID for example.)
- Requiring Verification, and/or Minimum Trades by another party.
After this part of the process, you’ll be able to check out the potential list of buyers and some of their statistics.
Things like whether or not they have positive reviews, their rate per Bitcoin, and the last time they were online.
If a buyer hasn’t been online in nearly a month, chances are you’re not going to hear back from them for a transaction, so make sure you check out who you’re going to try to sell to!
On top of this, you’ll want to check out their other stats like if they’ve got a verified phone or e-mail, how many trades they’ve done, how many people trust them, and whether or not they’ve been blocked by any users.
All of these checks help to works a screening process that can help you find out if the individual on the other side is safe to trade with or not.
After you’ve looked at your options, contacted these buyers, and checked them out to make sure you can trust them, you can go ahead and start the transaction.
The transactions take place through the chat system so that you can both discuss your trade, send files or documents to one another, and then finalize the trade with the other party.
To Sum Up: In much simpler terms, you make sure you have some bitcoins to sell. Then, set up things like your preferred currency, payment method, etc. After you’ve done that, you can scope out some buyers, and once you’ve chosen the one you like, you’ll need to contact them.
You’ll discuss the trade with them, and by using the chat system, you’ll finish up the transaction. You will have your money, and the buyer will have their Bitcoins!
What makes Paxful Good?
So what is the great thing about Paxful? Well, Paxful can be a great alternative to a Bitcoin exchange. It’s a pretty simple system once you get started, and as long as you have either the money to buy Bitcoins, or if you have Bitcoins to sell, you can get started with Paxful relatively easily.
One of the reasons that Paxful can be really good, is that it’s pretty widely available to a lot of different regions and countries.
Many exchanges tend to be region locked, and so your options for buying and selling are a lot less than what you’ll find with Paxful. While the company is from the United States, it has reached many places like the United Kingdom and its reach extends to places as far as China or Japan.
There is a small list of banned countries, so you won’t be able to use Paxful if you’re from one of these places or trade with anyone that’s from there either, but despite this fact, their reach is still very massive.
The other major selling point of Paxful is its huge list of accepted payment methods. You can use well-known methods like Paypal, but you can also use cash deposits or gift cards.
While only a few payment methods were mentioned earlier, they accept all kinds of gift cards and other options.
A few of these accepted gift cards are AMC Theaters gift cards, Apple gift cards, Bath & Body Works gift cards, Gamestop gift cards, and Target gift cards.
They even accept things like Skype credits and phone refill cards. As noted earlier, even other online transfer methods like Paypal are accepted, like Payoneer and Skrill.
Paxful states that their list has over 300 accepted methods, and is still growing in numbers. The full list of currently accepted payment methods can be found online, the list is indeed, massive.
With so many accepted payment methods, users have a great selection of being able to buy and sell currencies no matter how they like to manage and use their money.
With the ability to see things from other users like verified phone or e-mails, how many users trust them, the number of trades they’ve actually done, and whether or not they were blocked by anyone, it’s easier to find out who you should trade with, and who you shouldn’t trade with too. It helps everyone stay safer and more secure for trading.
Paxful even has the chat system that can be quite helpful in spotting shady users at the early stages of the transaction. By asking for certain documents or information that’s normally needed for these transactions, it can help you identify people who are scammers.
Many times scammers will try to make excuses for why they can’t do those things for you, which means you should take your business elsewhere!
What makes Paxful Bad?
While Paxful has a lot of nice features and bonuses, it’s not without its own problems either. One of the major downsides of using Paxful is that it’s still really easy to get scammed and lose money and Bitcoins on the platform.
Even though Paxful tries to make it easier to see who’s trustworthy, and who’s not, it doesn’t mean scams can’t happen.
You can do a lot of checking up on users and while you can probably trust users with a high amount of people having trusted them, and a large amount of trades with little to no blocks, it’s possible that the payment method you chose isn’t used a whole lot, keeping your choices a lot smaller too.
Not only can you run into scammers, but if you’re just starting out selling, buyers will have a hard time trusting you too! Sure, it’s understandable of why they’d be wary about trusting you.
You’d be worried about trusting a new user with no real stats to look at too. Unfortunately, this means that you’ll just have to sit around and wait for someone to decide to give you a chance so you can start building up those numbers, and gain a good reputation.
Paxful has a decent system in some ways, but in others, it’s very faulty and can lead to scams, and difficulty in getting started.
Is Paxful Worth it?
Paxful has a lot of pros and cons things, but the key question boils down to, is Paxful a good choice for you? Paxful excels in giving users a tremendous list of available payment methods, and it’s probably the best feature that Paxful provides.
From Paypal like services, and gift cards, to cash deposits and phone refill cards, Paxful really does offer an amazing selection of different payment methods. Plus, being available in so many countries makes it a great way to find plenty of people to buy your bitcoins, or to sell bitcoins to you!
However, users tend to charge a lot more for their bitcoins, and there’s also a much higher risk of running into scammers and losing money and bitcoins. You can do as much research on the other party as much as you want, but there will always be a chance that they aren’t legit.
If you use a really obscure payment method for transfers, you could really benefit from using Paxful. Not every place is going to accept things like Payoneer or gift cards, but you will probably always be able to find someone who can work with you on your payment method.
Or, if you’re someone who lives in a country where there aren’t a lot of options for buying and selling bitcoin, Paxful could be your friend there too, since they’re available in so many regions.
However, if you live in a place like the United States, and your payment method tends to be widely accepted, like Paypal, you’re probably better off using a different exchange platform. The risks and rise in bitcoin prices make this choice better for those who really don’t have a lot of exchange options.
Paxful has a lot of nice features, but these features aren’t that important for someone who lives in an area like the United States, and uses things like Paypal.
There are probably much safer platforms to work with, but if your payment methods aren’t common, and you live in a country that doesn’t have many exchange options, if any, then Paxful might actually be a great option for you to get started with!
Another note is that the variety of options Paxful provides allows for an enhancement of privacy, depending on what method of payment the user chooses, they may be able to have different levels of privacy associated with their transaction.
Paxful, like any other exchange site, has its ups and downs, and it’ll work for some people, and it won’t for others. It all depends on what you need as an individual, and whether or not Paxful is needed to meet those specific needs.