Paxful is a global, peer-to-peer marketplace used to buy and sell Bitcoin easily, without the use of a third party intermediary, such as an exchange. Think of it as the eBay of Bitcoin as it connects buyers and sellers, and lets them set their own price.
Paxful was started in 2015 by Ray Youssef and Artur Schaback and is incorporated in Wilmington, Delaware, USA. While it is a U.S. corporation, it faciliatates trades on a global basis, and can be used in most any country in the world. The exceptions are those countries that have an outright ban on Bitcoin, and some countries that are under trade embargos by the U.S. These unsupported coutries at the time of writing are: Balkans, Belarus, Burma, Cote D’Ivoire, Cuba, Congo, Iran, Iraq, Lebanon, Liberia, North Korea, Somalia, Sudan, Syria, and Zimbabwe.
As a peer-to-peer marketplace Paxful’s role in any transfers is that of a mediator, providing an online space for private buyers and sellers of Bitcoin to come together.
Paxful continues to gain in popularity as a way to easily and anonymously purchase Bitcoin thanks to the user-friendliness of the site, the wide range of trade options, and the huge number of payment methods. The current payment methods include all the standard options you would expect such as bank transfer, Paypal, Skrill, credit and debit cards. Additionally, payments can be made using a large number of gift cards. In total there are over 300 methods of payment for those using Paxful, including a wide variety of other cryptocurrencies.
Opening a Paxful Account
You can search Paxful to find a suitable person to buy Bitcoins from, but to complete a transfer you will need to create an account. Fortunately the account creation process is quite easy and painless. Creating an account and free Paxful wallet requires nothing more than an email address and your chosen username and password. Once you complete and submit the online form an email will be sent to your with a verification link. Click the verification link and your account is set. You’re ready to buy Bitcoin!
One additional recommended step to take once your account is created is to sign in and setup 2-factor authentication on your account. This will help secure it against hackers and bad actors who may try to compromise your account, and is simply a good practice for any account these days.
Those selling Bitcoin can also do so easily. If you plan on selling large quantities of Bitcoin you may want to consider becoming a verified vendor. This will increase your trust with potential customers, and also gives you other benefits on the Paxful platform, such as immediate disputes, and higher trust on the platform in general. Note that to become a verified vendor you must be a U.S., Canadian, Australian or European Citizen.
Becoming a verified vendor will require you to take the following additional steps:
1. Submit a printed proof of address via regular mail.
2. Submit a high-resolution picture of your ID (drivers license, passport, or government issued ID)
3. Submit a video of yourself holding your ID or passport.
Buying and Selling Bitcoin on Paxful
Even before registering you can head over to Paxful and start browsing the listings. You can see who is selling Bitcoin there, and what payment methods they accept. Once you find a suitable seller, clicking on the “Buy” button to the right of the offer will take you to the registrations screen. Registering takes less than a minute, and to buy Bitcoins there are no onerous identification requirements. Once you verify your email address you’re ready to buy Bitcoins.
When purchasing Bitcoins on Paxful you’ll have your choice of hundreds of vendors selling Bitcoin, and accepting over 300 different payment methods. If you’re logged in the site and click the “Buy” button on any listing you’ll be taken to the escrow service, and a chat window to communicate directly with the seller. This will allow you to discuss the trade in more detail if that’s necessary.
When you place a buy order the sellers Bitcoins are placed in the Paxful escrow service until you’ve made your own payment and clicked the “Mark as Paid” button. Paxful will also hold your payment in escrow and if everything is fine on both sides Paxful releases the payment to the seller and the Bitcoin to you. Note that you have just two hours to complete your payment. If you haven’t completed payment by that time the Bitcoin is returned from the escrow account to the seller.
As you can see above, buying Bitcoin through the Paxful site is a simple process. There are no complicated verification steps, no need to give up personally identifying information, and no long waits. The site offers a wide variety of payment methods, and on top of this there are no fees for Bitcoin buyers. Of course that is offset somewhat by the premium typically charged by the sellers, which can be higher or lower depending on the payment method.
If you’re a seller on Paxful you will be subject to a 1% fee by the Paxful site. That’s how they make their money. In addition, the seller is responsible for the Bitcoin transaction fee, which varies depending on network traffic, but is currently running around 1000 satoshi’s or 0.00001 BTC. This transaction or “miners fee” is taken out of the sellers wallet when they send the Bitcoin, and has nothing to do with Paxful.
The low seller fees and non-existent buyer fees should make Paxful a low cost option for buying Bitcoin, but this isn’t always true. Sellers typically charge a premium on Paxful, and this is for a variety of reasons. One is that the seller simply wants to make a profit, and that’s understandable. Sellers also take a greater risk with some payment methods versus others. Gift cards are always a risky payment for sellers. Sellers have also found that there is a risk of charge-backs from those using Paypal and credit/debit cards, and will inflate their prices accordingly as an insurance against this risk.
Paxful Key Features
Paxful operates a peer-to-peer marketplace, and because of this certain measures have been put in place to avoid fraud on both sides of the transaction. While it would be good to be able to simply trust everyone selling Bitcoin on the platform, history has shown that if there’s a way to scam people, the scammers will soon come out of the woodwork. Because of this Paxful has instituted several key features to help users avoid fraud as much as possible, although good common sense is still the best deterrent, and we’ll talk about that more later in the article.
Below are some of the features that have been implemented on Paxful to help keep trades secure:
Fund Safety – When you register for a Paxful account you are also given a free Paxful wallet. This wallet is meant to offer a safe and secure way to store funds, and make transfers for purchases on the site. Additionally, all of the Paxful servers are secured with banking industry standard security protocols.
2-Factor Authentication – The Paxful wallet requires a complex password, but that isn’t always enough to guarantee security. To make the wallets even more secure you will be required to enable 2-factor authentication on your wallet. This provides a more secure layer of protection in the event that hackers try to access your wallet and funds.
Escrow Service – In the past there were instances of sellers simply disappearing with payments and not delivering the Bitcoin. To prevent against this type of fraud Paxful has instituted an escrow service. This service holds both the sellers Bitcoin and the buyer’s funds in a separate account until all parts of the transaction have been approved and confirmed. This makes for safer and smoother trading.
Reputation Ratings – Each trader on Paxful is given a reputation score based on their previous dealings and feedback from others. In addition, all of the feedback activity is publically visible. This is a very helpful metric in determining if a trader’s history is positive or negative and can help guide you to good sellers, while helping you to avoid poor sellers.
Customer Support – If you are used to the lack of customer support at most cryptocurrency exchanges, be prepared to be surprised by Paxful. The site operates a well staffed customer support center, and you are able to contact the support team in a variety of ways, not only by email, but also via online chat, phone, and on their social media channels.
Some Cautions for Paxful Buyers
Because Paxful is a decentralized peer-to-peer marketplace it’s necessary to have some safety measures in place to ensure trading remains safe and secure. Paxful has put some of that in place with their escrow system, strong passwords and 2-factor authentication, as well as the reputation system, but some of the responsibility for remaining secure on the platform when buying and selling remains with the users.
In general the site has developed a reputation as a safe place to buy and sell Bitcoin, but wherever there is money to be made (or stolen) you can bet there will be scammers and bad actors. One of the reasons for this comes down to the wide array of payment options when using Paxful. With this being the case there are a few things you can do to keep your money safe on the platform.
- Always do a deep dive into the seller’s profile before transacting with them. You should be looking for established accounts with a positive feedback rating. Your safest course is only to buy from accounts that are at least a year old, and have a feedback score of +500 or higher. Dig deeper and see what negative feedback there is, and when it occurred, and try to see if it’s valid. In some cases high positive feedback accounts will have some strange negative feedback, which really shouldn’t be counted.
- While you’re at it take a look at the number of people who trust the seller. This should be far greater than the number that have blocked the seller. Look also to see if the seller has both verified email and phone numbers. If both aren’t verified it could be a red flag. Finally, you want to see a large number of transactions, preferably more than 1,000.
- Your first step should always be to get in touch with the seller and ask for an echange on the paxful platform. If they try to get you to trade outside Paxful, block them immediately. You should never trade outside the platform for any reason as you’re giving away all the protections that have been put in place on Paxful to keep you from getting ripped off. You should also contain all communications with the seller to the Paxful platform and avoid communicating via SMS, email or any other form of direct messaging.
- Let the seller know exactly what your needs are and be sure that they understand fully. If you have any concerns or issues, explain those as well. The clearer everything is upfront, the more likely you’ll have a successful experience. Understand too that prices will depend greatly on your payment method, and in some cases you’ll be able to get a far better price with a different payment method, so don’t forget to explore this option with the seller.
- With the above in mind, you do want to avoid some payment methods as a general rule. Gift cards paid for with cash are a favorite way for scammers to steal your money as they are untrackable. Paypal, bank transfers, and credit/debit cards are considered safest because you have the added security of being able to dispute transactions. That said, sellers will often charge more when you use these payment methods, because they can also be the victim of scammers who accept the Bitcoins and then dispute the transaction.
- If you run into any problems whatsoever, or have any doubts about the trustworthiness of the seller, don’t be afraid to make use of the Paxful forums or to contact customer support. The process is pretty straightforward, but there are always problems that can crop up, and customer support is there to help you when something goes wrong. If you need them please use them.
Is Paxful for You?
You won’t find many ways to buy and sell Bitcoin that are as easy to use as Paxful. Pretty much anyone with a computer or mobile device connected to the internet can make a purchase or sale through Paxful. And there’s no limit to the amount you can buy or sell. The users themselves decide how much personally identifiable information iks needed for any transaction, so you can remain anonymous if that’s your wish. And on top of all that, Paxful allows you to use over 300 different payment methods.
In fact, two of the greatest strengths of the platform are the anonymity and the payment flexibility it grants users. That flexibility and anonymity comes at a cost however as it makes it possible for scammers to steal from legitimate traders. It’s the main downside of Paxful, although the site goes through a lot of effort to locate and shut down scammers as much as possible. In addition to the escrow protection, there’s an extensive team of customer support personnel who work tirelessly to secure the platform to the best of their ability. And they are always available when you have questions or concerns.
If you’re looking to purchase Bitcoin using Paypal, Skrill and MoneyGram you probably already know that many of the established exchanges simply won’t let you purchase with these online payment methods. And they typically won’t let you buy anonymously. Paxful is the perfect solution for those looking to use an online payment service. You do have to be prepared to pay a bit more for your Bitcoin to take advantage of this benefit.
Paxful has grown greatly in the few years it has been in existence and it remains a very valuable option for those looking to purchase Bitcoin easily or anonymously. In some cases it allows individuals who might otherwise be unable to purchase Bitcoin to get involved with cryptocurrencies. This makes it very useful, whether you’re new to Bitcoin or an experienced Bitcoin hodler. Just make sure to use the resources offered by Paxful, and to conduct your due diligence before transacting with other users on Paxful and your almost certain to have a good experience.
As a result, it is a good choice for both new and more experienced traders. However, Paxful users should make sure to use all the resources necessary to verify sellers and transact in ways that keep them protected at all times.