If you are new to the digital world, you might be asking yourself why there is so much talk about cryptocurrencies. There are several reasons for the rising popularity of the online coins. They are decentralized since no one controls them. The currencies are transferred around without traders providing personal details about themselves. Coins fluctuate in value and thus are very lucrative for investors bent on making a profit.
With those factors in mind, peer-to-peer (P2P) marketplaces hold a special place in the industry. Often, their services are completely anonymous, as you do not need to verify your identity to buy and sell bitcoins/altcoins.
Paxful is one of those, a company that grew tremendously in last few years due to simple and cheap products. This review investigates all features and functions of the platform, evaluating the trade attractiveness and safety. Stay tuned as we present you what deposit methods are available, how high are the fees and how safe are your funds when trading coins at Paxful.
Paxful is a bitcoin peer-to-peer (P2P) online marketplace where traders can buy, sell and transfer bitcoins between each other. The entire inventors’ communication as well the transaction processing is done through the platform. The company is the main rival to the LocalBitcoins while services are very similar between the exchanges.
Paxful is globally available, offering a wide range of payment methods and fiat currencies for traders to use on daily basis. It deals exclusively with bitcoins while other altcoins, such as Ethereum, only serve as payment channels to get BTCs.
Paxful does not offer margin-trading services, as buyers and sellers post bitcoin ads to attract offers from the market. It is completely geared towards beginners in our opinion, as experts in the industry would find very little to do.
Account Creation and Verification
You can register an account at Paxful under 5 minutes for free and without any issues. Simply provide your name, username, and password. Verify your email at the next stage and you are set to trade BTC.
Being a P2P platform, the verification of your account depends on you. Traders decide what they wish to verify before they commence the exchange operations. You need to verify your email and phone number only, while ID card and proof of address are not mandatory.
That is not to say that certain sellers might like it. There is a high possibility that certain users wish to work with verified people only.
Paxful deals solely with bitcoins, with other cryptocurrencies available only as a payment method. You cannot buy or sell altcoins such as Ethereum, Litecoin or DASH like in Coinbase, Bitstamp, and Kraken.
There are over 300 payment methods at your disposal at Paxful. The options available include credit or debit cards, different types of bank transfers cash purchase, PayPal & Skrill and gift vouchers. No matter where you live, you can find sellers form your country and deal with them in your own currency and domestic payment option.
That is many choices, especially compared to other non-P2P exchanges like Coinbase, Bitfinex, and Kraken, who offer 1 to 3 channels at most. LocalBitcoins does come closer than others do as the platform offers nearly the same service as Paxful.
Fees and Exchange Rates
The exchange rate depends solely on the bitcoin ads on the platform. The prices are not controlled by the company but by the competitive environment. As such, the spread is thin, where you can buy and sell coins at the very small difference.
As for the trade fees, the only expense that you will incur at Paxful is transaction costs of 1% from the transaction value. Seller pays the said cost while buyers do not pay anything to the company.
Do take into account miner fees when transferring bitcoins to another Paxful account, as it now costs 0.0008 BTC (approximately $6.5).
Paxful operates as a marketplace where traders cooperate with each other. Thus, unlike many other exchanges, Paxful does not hold bitcoins on its own. Company rather rents its online space for investors to work it out between them.
Thus, a number of accounts operating on the platform measure the liquidity rate. Each country has its own liquidity while most of the ads do not hold large coins for sale or purchase.
Paxful started its operations in 2014 by Ray Youssef and Artur Schaback. The platform’s original name was EasyBits, changing its name to Paxful in 2015. The largest mark was Backpage inclusion of Paxful as a method of payment for their online shopping marketplace.
As years passed by, exchange attracted a large number of traders and included numerous payment methods that suit needs of both buyers and sellers. In 2017, the company also introduced virtual kiosk programs, where people would simply post the link to Paxful and earn 2% of each purchase made.
Exchange really lacks safety features, as you only have two-factor authentication (2FA) and usual username and password to protect you. Escrow service can go some way to ensure you get what you bargained for but that is about it. Bitfinex, Coinbase, CEX.io, and Kraken all offer different features such as cold storage of coins, encryption of mail and password managers. None of it is available at Paxful.
Pros and Cons
⬤ large list of available fiat currencies for trade
⬤ ability to purchase and sell bitcoins with an unverified account
⬤ over 300 payment methods available for users
⬤ exchange rate and trade fees very low (1% only)
⬤ Bitcoin is the only available cryptocurrency
⬤ security of the funds and trade itself is very basic
⬤ trade platform geared towards beginners only as there is no margin trading
⬤ scams are a natural part of the marketplace
Paxful, being a P2P platform, offers a wide variety of payment methods and fiat currencies. It is a good starting point for a trader who just introduced to the cryptocurrency world. Expert investors will find the exchange lacking in trade functions as you can only buy and sell instantly. The issue with altcoins should not be ignored, as the only bitcoin is accepted.
Moreover, there are very few safety functions and frauds are frequent in the market. Keep your large volumes of BTC away from this exchange and use it as a learning experience only.