Two of world’s largest peer-to-peer crypto exchanges LocalBitcoins and Paxful have both made a significant base in India. Which one does better than the other? We are here to find out who will win the Paxful Vs LocalBitcoins battle.
The recent quashing of a Banking Ban by the Supreme Court has provided a new lease of life to the crypto community of India. Within hours since the judgment, inquiries about “How to buy Bitcoin in India” began floating around on personal messages of the entire Coin Crunch team.
While there are several crypto exchanges in India, it is imperative to note that two of the world’s largest Peer-to-Peer Crypto exchanges are also trying to grab pieces of the large pie of potential traders in India. Both LocalBitcoins and Paxful have a large base in the country, with the latter wooing traders with lucrative offers often.
But which one of the two is a better platform to trade on. We will be the judge of that. In the name of Nakamoto, Satoshi; LET THE COMPARISON BEGIN.
Age of the platform and Volume in India
Finland based LocalBitcoins carry a bit of grays in the industry by being here since 2012 while Paxful started in 2015. Nevertheless the latter is catching up. Paxful has also been growing at a rapid pace by running campaigns and partnering with Indian media platforms and influencers such as Crypto Kanoon, Shalini – Indian Crypto Girl, Coin Crunch (yes that’s us), and many more.
A quick look on the data aggregated by Coin.Dance, shows Paxful nearing 100 BTC volume almost every week in 2020, while LBC is pulling 150 BTC volumes in the same time frame. LBC’s volume has dropped this year as Paxful’s volume grows.
Winner: LocalBitcoins. Despite growing volume, Paxful has a lot to catch up to topple the Goliath that LBC is.
The Look and The Feel
Ordinarily, the colour of the portal should not matter. It is the ease of use that makes the customer come back. LocalBitcoin’s front page opens to advertisement from users for buying and selling bitcoins, which makes it clear to the customer what they are going to get. On the other hand Paxful comes with a plethora of information on the homepage and two inputs boxes – How much amount you want to spend and how much Bitcoin do you want to receive.
LBC’s input box for amount, payment method, etc to buy bitcoin is not top of the other advertisement. User can pick an ad and simply interact with it. Paxful on the other hand shows no ads, which means the user has to enter the amount to proceed further.
Paxful looks full of features while LocalBitcoins looks very 2015. But on the first go Localbitcoins definitely sells you what it offers while there is a bit of navigation and looking around needed on Paxful.
There is no clear winner here, it depends on the user’s choice.
KYC and Privacy
Gone are the days when exchanges allowed traders to openly trade without having to provide any identification. With FATF’s travel rule coming soon and all regulator eyes looming over large platforms, most exchanges have adopted a KYC norm.
This is true for both Paxful and LocalBitcoins. But there is a slight advantage for Paxful over LocalBitcoins. LBC offers upto $1000 per year limit of trading without verification, there after there are three more tiers of verification which has different limits. As a user’s transaction levels increase, the requirement for KYC also increases
On the other-hand Paxful offers an overall transaction limit of $1500 for trading without verification, but further diligence is required as user transaction levels increase. Paxful’s KYC process isn’t one-fit-for-all but seems more welcoming to new users and gradually ease them into new levels.
On both exchanges, users can set conditions as to what kind of users they want to trade with – verified or unverified. Users in some jurisdictions or with certain activities may be required to provide verification sooner on Paxful and LBC both.
Both Paxful and LocalBitcoins offer escrow service for trading. Hence a seller’s bitcoins are held in escrow until the transaction is completed by the buyer and confirmed by the seller. That mitigates the risk of scams and frauds.
Doesn’t mean that scams and frauds do not happen on these platforms. Some users are smart enough to take advantage of naive and gullible users, hence it is imperative that users take care on who they are trading with.
Both platforms allow users to rate peers they trade with. Thereby, it creates a reputation network for the users. It is advisable to trade with users who have better ratings over the ones with less or no ratings.
In case of issues, both exchanges have dispute resolution teams that take over a trade and after conversation with both buyers, sellers and verifying the proofs, decide who earns the bitcoins held in escrow.
While there are several ways to pay for bitcoins on both exchanges, we will focus on how many are feasible/available in India.
Both exchanges offer Bank transfer in the form of IMPS, NEFT, UPI, and RTGS. Additionally there is bank deposits, ATM deposits, also available on both. Once again, wallets like PayTM and PhonePe are offered on both the exchanges. Cash-in-person, though, is only offered by Paxful.
Although Paxful has over 300 Payment methods which gives it a huge edge over LocalBitcoins, for India, the only method widely used apart from the ones mentioned above is Skrill. However, if you want to and can find a buyer or seller, any of the 323 methods can be used to create an offer.
Compared to the less than 100 payment methods of LocalBitcoins, Paxful seems to have taken a massive edge on this one.
One other thing to notice is both exchanges offer buying and selling bitcoins for Altcoins. We will talk about it below.
A bit of warning, trading with gift cards is a known technique used by scammers who utilize the gift card balance and do not return the BTC. Be careful and avoid gift cards or only trade with trusted users. Paxful even wrote a guide on how to be safe.
Both exchanges offer altcoin trading in a non-traditional way. User can choose an altcoin as a payment method to transact with the other peer.
26 of the 323 payment methods on Paxful are altcoins like XRP, LTC, ETH, USDT and more. On the other hand, LocalBitcoins offers only three altcoins as of now – XRP, LTC, ETH.
Paxful wins this round with ease. Paxful also has strategically placed banners for Binance under a partnership with the latter, so a user may directly trade on the largest crypto-to-crypto exchange.
LocalBitcoins charge a trading fee of 1% to users who create advertisements, in other words, makers pay 1% trading fee. Takers do not pay any fees.
Paxful charges 0.5-5% trading fee depending on the payment methods (0.5% for Bank transfers) to sellers. There are no fees for Buyers.
However, the withdrawal fee or the fee to send BTC to external wallets is 0.00005 generally on LocalBitcoins while 0.0005 on Paxful.
Winner: Paxful wins in trading fees. LocalBitcoins wins in Sending Bitcoin fees. As a buyer, buying BTC on Paxful is free.
One of the best parts about any exchange is the affiliate program. As an influencer, media portal, some of the earnings for the platform depend on affiliate marketing.
Paxful offers a whopping 50% trading fee affiliate marketing commission and 10% for every user in the secondary network – an affiliate user’s affiliate user. However, Paxful only offers commission for Buy transactions, given that they only charge fees to sellers.
On the other hand, LocalBitcoins offer 20% of the trading fees as commission on both buy and sell transactions
Winner: Paxful wins with a small margin
Final Call – Paxful Vs LocalBitcoins
While there are several options in India to buy and sell Bitcoins, truly Peer to peer exchanges are very few. Both LocalBitcoins and Paxful have a significant market share but it the latter seems to be pulling more volumes week over week.
Paxful has significantly better features while LocalBitcoins seem to have a loyal customer base. All in all, Paxful is definitely worth a try and wins on many levels over the incumbent. It is also worth mentioning that Paxful has an Indian telegram group @Paxful_Indian_Community with over 6500 members.
Have you tried Paxful? What are your views? Let us know in the comments below.
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