Paxful Review: An Easier Way to Enter the Bitcoin Market
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Paxful provides regular individuals with varying levels of cryptocurrency trading experience the ability to buy and sell bitcoins easily. Thanks to its peer-to-peer structure and secure platform, users can quickly purchase bitcoins with a variety of payment methods or sell their coins through a safe and easy-to-use dashboard. With a strong team of developers behind the service along with an intuitive platform, Paxful represents an excellent gateway to quickly enter the bitcoin market.
|Paxful Key Information|
|Company Location:||United States|
|Transfer Limits:||No limit|
|Supported Fiat:||Any Currency|
|Payment Methods Accepted||Credit card, bank deposit, wire transfer, prepaid cards, etc.|
|Supported Countries:||Any country|
|Fees:||1.00% seller’s fee|
|Website (URL):||Start trading at paxful.com|
Login and Signup
Registering for and obtaining your first Paxful account is straightforward and quick. Creating a free account does not require any personal information aside from a user name and an email, which you’ll need to enter twice. You will also pick a strong password and pass a simple captcha before receiving a confirmation email. When registering, each new user also receives a free wallet.
How Paxful Works
Paxful offers services for both buying and selling bitcoins directly between users. Unlike many brokers and exchanges which set up intermediary services, Paxful only arbitrates transactions and collects a small listing fee from sellers for supplying infrastructure and support. After signing up, users are taken to Paxful’s listing page, which shows the available offers for the amount chosen as well as the preferred payment method.
Based on the offer chosen, buyers may need to show some form of verification, which usually does not extend beyond a simple picture of a photo ID. This may also change depending on the payment method selected, which might impact the fees attached to a transaction as well. Once the best offer is selected, buyers can interact directly with the bitcoin holders in a private chat. When conditions and amounts are agreed upon, sellers’ coins will be put in escrow for a limited time, and buyers will have to complete the payment for their coins, as well as upload confirmation that they have paid the requested amount in the allotted time. When payment is confirmed by the seller, the coins are released to a user’s wallet.
Prospective bitcoin sellers have two alternatives when they want to trade their bitcoins for fiat currency. The first is similar to the buying process. Users list how much they are willing to sell in fiat as well as their preferred payment method before reviewing offers made by potential buyers. This process is faster than creating an offer and letting buyers choose it, but it does sacrifice some security since buyers are not always verified before creating a purchase offer.
The other method for selling bitcoins on Paxful is to create an offer. This method takes three steps and lets sellers ensure they are dealing with verified users. More importantly, it helps sellers gain reputation points, leading to more purchase offers, better deals, and a higher likelihood of successful sales. The first step is to choose the payment method accepted for bitcoins. The company lists over 300 unique payment options.
The second step for sellers is to select the profit margin they want to generate per transaction, the minimum and maximum amount of bitcoin they wish to trade, and the time buyers have available to complete payment before a transaction is canceled. Finally, users can select their specific terms for a trade. This includes any requirements for identification, verification, and any payment restrictions. Once an offer is listed, users should be alert, as the timing on any trade is limited and can be cancelled if either party is non-responsive for an extended period.
As a marketplace platform that supports traders from all countries, anyone can sign up and match with traders from around the world. Payment methods supported by Paxful also make it easy to transact with anyone, regardless of borders, with options such as Western Union available. However, traders who post offers can also limit the users they want to trade with by geography, so this is an important requirement to pay attention to.
Unlike most exchanges where liquidity is a function of finding the right counter-currency at the right price, this idea is too complicated for Paxful. With so many payment options supported and no market-making functionality (Paxful is purely peer-to-peer), getting the right price and currency for you is entirely dependent on what other Paxful users want at any given moment. In terms of the cryptocurrencies supported, Paxful is Bitcoin-exclusive.
One of Paxful’s biggest claims is that they charge no transaction fees for bitcoin trades on their platform. This is true for buyers, who do not have to pay any transaction fees when making a purchase or finalizing an offer. The story is slightly different for sellers, who are charged a 1% fee when they make a sale. The fee does not change regardless of the transaction size, however.
Additionally, the Paxful wallet does include a miner’s fee for senders of 0.0008 BTC, though that amount is transferred directly to the bitcoin network and not to Paxful. This is a standard fee that is included in wallets that send and receive bitcoin as a way to cover the network’s operation. The company does note in their FAQ that fees may be subject to change in the future though they don’t seem to have plans to make any amendments in the near future.
It is important for buyers to keep in mind that while there are no fees placed by Paxful on sales, the prices listed for bitcoin include sellers’ desired margins included, so they do not match bitcoin’s market value at the time of sale.
Paxful doesn’t enforce specific limits and instead leaves it to the traders to pick their own. On the offers page one will see specific limits set by the offering user, and so this becomes another relevant criterion to determine when browsing.
Payment Methods Accepted
While Paxful offers over 300 payment options to its users who wish to buy cryptocurrency, they can be broken down into four major categories:
- Gift/prepaid cards like iTunes store cards, Amazon gift cards, PlayStation Store cards, and more
- Cash deposits which can be made at a variety of banks and other services like Western Union or MoneyGram
- Online transfers through services like Payoneer, PayPal, Walmart2Walmart, OkPay, and more
- Debit and credit cards
Security: is Paxfult Safe to Use?
While Paxful is not directly involved in any of the exchanges listed on its website—aside from offering the listing infrastructure and platform—the company still prioritizes user security as much as it can. This ranges from simple security features such as 2-factor authentication and complex passwords on all user wallets to broader measures.
One of the biggest security features Paxful offers is its escrow system which, while not entirely unique to its service, is a welcome addition for a peer-to-peer platform. When two users open a trade, the seller places the required amount of bitcoin into an escrow account for a limited period. The funds remain in the account for the allotted time and can only be removed once the seller verifies that the payment has been successfully completed.
Additionally, all traders receive a reputation score that is based on their trading history, activity, and feedback from other Paxful users. This helps them complete trades with more confidence as users who break the terms of a trade can be reported and see their reputations fall accordingly. Even so, while the company includes these security measures, there is still a chance that some sellers and buyers may attempt to act dishonestly. The Paxful customer support service lets users report any fraud or potential scams, and they have a strong track record of assisting users who have become the victims of fraud on its platform.
Paxful has nurtured significant loyalty in the cryptocurrency community and has developed a healthy reputation. While it provides a smooth and uninterrupted service for traders, this is expected because it’s the only thing that Paxful is responsible for—company doesn’t have liability for problems that pop up between users. Tools like escrow and reputation are typically strong enough to prevent most problems, but the customer support team catches other issues before they fall through the cracks. For this reason, users are expected to do their own due diligence on other traders based on their profile, chat and mail communications via Paxful and more.
Overall, Paxful presents a viable and straightforward alternative for individuals who want to purchase and trade bitcoin but face geographical restriction or exhibit privacy concerns. The platform’s simple requirements for verification, along with the measures the company takes to ensure that trades are as transparent as possible make it a worthy choice for those looking to buy bitcoin quickly. Moreover, the sheer number of payment alternatives means that users do not have to be restricted by the confusing processes many exchanges and brokers implement for cryptocurrency purchasers.