How To… Sell Bitcoin on LocalBitcoins.com

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People are looking for ways to sell Bitcoin (BTC) without providing all of their personal information.  To sell BTC for fiat currency using government sanctioned exchanges requires you to provide copies of your personal identification and your bank account information. Some exchanges even require you to attend a video conference to prove you are who you say you are.

LocalBitcoins.com is a popular site used to connect Bitcoin sellers with buyers for purchases outside of the system. This guide will walk you through what you can expect from LocalBitcoins.

The video below offers a short summary of the sign-up and transaction process. I go into further explanation down below.

 

Step1. Head to LocalBitcoins.com and sign up for an account. This just requires a valid email address you will need to verify in the next step. Be sure to use a unique password for this account, as you would with any account you make a financial transaction with.

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Step 2. Verify your account through your Email address.

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Step 3. Head into your new LocalBitcoins account and look around. In your wallet under ‘Receive bitcoins’ you can see the Bitcoin address they have created for you to receive your BTC with. This address will be 34 characters. Mine below is:

1B6gKfjg81azumWNWW6PfNekazb2fwoanD

This is the BTC address you need to send the BTC you want to sell to. Once it arrives and receives three confirmations you will be able to sell it. Please note the fees associated with moving BTC to LocalBitcoins.com spelled out in your Receiving wallet.

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Step 4. Open the ‘Sell Bitcoins’ page by clicking the link at the top. The Search button to the right will bring up a list of people buying BTC and show what they are offering to pay. You will want to look for a few important attributes in a buyer to be sure they are right for you…

  • Have they bought before? The buyer on top has 3000+ transactions.
  • Do they have a 100% rating from previous transactions?
  • What is their payment method?

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Step 4.5. It is important to note here there is also a Local Cash option available at the very bottom of the payment type list. This is the most anonymous, and slowest, way to sell Bitcoins. To use this option replace the country (‘United States’ above) with your nearest local large city, and choose ‘cash’ as the payment method. A list of local buyers will pop up and contact information will be made available when you choose one. Be safe. Meet in a public place such as Starbucks, and expect to wait patiently with the buyer while the BTC makes its way to their account.

Step 5. When you select a buyer, your BTC will automatically be removed from your account into escrow, meaning you won’t have access to move it anywhere else until the transaction is complete.

Next you will be communicating with and waiting to receive payment from the seller. For example, if you are going to receive funds via Western Union, it may take a buyer time to get to a local location and send the payment.  The little green / yellow / red dot next to a user’s name indicates their typical response time. A green dot user should reply to you more quickly. When they have sent payment, they will indicate this from their side, and you will receive an Email notification.

Step 6. After you receive your payment, you need to release the BTC from your account.  Never press the ‘Release bitcoins’ button before confirming you have their payment.  This moves the Bitcoin from escrow to the buyer’s LocalBitcoins wallet. Once you click it,  you are confirming you have their payment and you cannot recover your BTC.

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Step 7. It is important to leave feedback about your experience with the buyer after the transaction is complete. This will help others decide whether to trust them in the future.

Warning to sellers accepting PayPal. 

PayPal has a policy stating anyone making a PayPal payment can open a support ticket stating the product they bought did not arrive, and PayPal will reverse the transaction without input from the seller. This means a scammer can claim to have not received their BTC, even if you sent it, and PayPal will take the money back out of your account and give it back to the buyer. This does not happen often because PayPal does not let a buyer use this loophole repeatedly before disabling their account, but it is a possibility you should be aware of.