Paxful Review 2021 – Is it Legit?
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Paxful is an innovative online marketplace where you can ‘buy bitcoins instantly’ in a ‘secure and easy’ process. And according to the company website, this is made possible by the number of services availed by the online trader. These include an escrow account, free wallet, a free client account, and detailed feedback service that helps you build a portfolio and online reputation.
But how efficient is the site and its services? How secure is the trading platform and can you trust the brand and their wallet with your digital coins? More importantly, how reliable are the over 300 payment processing services that they claim you can use to pay for your Bitcoins?
We have reviewed the company and its services and here is a detailed account of everything you need to know about Paxful online marketplace.
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How does it work?
Simply put, Paxful is an online marketplace that brings together bitcoin buyers and sellers. However, unlike most trading platforms and bitcoin exchanges that have either the platform or the market at the center of the transaction dictating the price of the coins, Paxful passes on this freedom to the bitcoin sellers. This makes it more of a peer-to-peer market place than it is an exchange where the seller puts a post defining the price at which they would like to sell their coins.
Buyers can then express interest in the coins and have the transaction executed via Paxful’s secure escrow service. What we like about this approach to selling bitcoins is that it gives sellers the right to set the price for their coins. On the flip side, however, we found most of the coins listed on this P2P marketplace overpriced. And the higher prices are a result of the different transaction fees that most sellers seek to pass on to buyers.
How does the escrow service work?
Paxful’s escrow service is available for all bitcoin transactions. Ideally, a Bitcoin seller on this platform can only post a sale after moving the coins they intend to sell into the Paxful free wallet.
After finding a buyer and agreeing on the terms of the sale, the number of bitcoins to be sold is automatically moved to Paxful’s escrow account.
The most interesting aspect of the escrow account is that the buyer cannot cancel the trade and have the coins revert to them. This feature, therefore, forms the basis for which the company lays its security acclaim.
You will also note that the buyer has a limited time within which they are supposed to fund the transaction. If by the end of thirty minutes the buyer has not funded the escrow account, the trade is canceled automatically and the coins reverted to the seller’s bitcoin wallet.
However, when the buyer and sellers fulfill the transaction by meeting all the terms of trade, the transaction is deemed successful the coins are delivered to the buyer’s Paxful wallet.
There nonetheless are cases of disagreements between the buyer and sellers long after the coins have been moved to the escrow account. At this point, the transaction is escalated to the dispute committee. And here, Paxful moderators investigate all the facts and claims before deciding on the rightful owner of the coins.
Payment methods:
At 300, Paxful presents you with more ways to pay for your bitcoins than any other of the best bitcoin exchanges or trading platform we have come across. Here, you can pay for bitcoins using virtually any conceivable means. Some of the most popular payment methods supported here include bank transfers, Online cash wallets like PayPal or Skrill, Gift cards, cash remittance services like Western Union or world remit, Debit and Credit cards or just exchange them with other digital currencies.
The platform further supports numerous other unconventional methods that you can use to buy bitcoins. For instance, you can pay for bitcoins using the iTunes gift card, settling the seller’s bills, airline and even hotel booking.
Minimum deposit:
Paxful, unlike most trading platforms and exchanges, doesn’t require that you deposit a specified amount to open or activate your buyer or seller account. Note however that the trading minimum is currently set $10 and may vary b=depending on the seller. There isn’t however the minimum amount of bitcoin that you can buy or sell on the p2p marketplace. You will, however, want to first confirm the minimum amount a seller is willing to transfer to you before initiating a trade.
Transaction fees and commissions:
Paxful online marketplace is free for buyers. You don’t have to pay registration fees or the takers fees when you buy bitcoins on the platform.
Sellers are, however, required to pay a transaction fee for using Paxful systems that are currently fixed at 1% of the value of coins traded.
Most sellers on the platform have nonetheless resulted to passing on this transaction fee to buyers by hiking their bitcoin price way above the prevailing market rates. And in addition to the transaction fee, most sellers will charge commissions and premiums depending on the preferred payment method, especially if the method involves the conversion of foreign exchanges.
There also are the normal bitcoin network fees that senders pay if they are looking for faster bitcoin transactions. But these serve as an appreciation to miners and not an additional Paxful charge.
Security of data and trades:
The P2P online marketplace has instituted several security measures. Here are the three that we find most exciting:
☑️Secure wallets: Upon registering with Paxful, as a buyer or seller, you are given a free bitcoin account where you can store your coins. The company claims to maintain a banking institution-grade security system around the servers hosting these coins. And the fact that they haven’t lost customer assets since establishment in 2015 points to the efficiency of this storage system.
☑️Escrow services: We consider Paxful escrow service the greatest security measure implemented by the P2P marketplace. It eliminates cases of fraudulent trades by ensuring that buyers only pay for coins held by a third party, and that sellers only release the coins in escrow if satisfied with the payments.
☑️Two-factor authentication: Paxful allows you to add two-factor authentication on your device to effectively secure your Paxful account. You can also opt to use the email address or phone number for the 2FA in place of the device. You will nonetheless have to verify the email and address first.
Customer support:
Paxful has a dedicated FAQ page where you can get answers to some of the most common queries you might have about their operations and services. However, clients in need of further assistance can always reach to the Paxful customer team through the interactive chat option on the platform, as well. The support team is available 24/7 and typically responds to customer queries immediately or within a few minutes.
Alternatively, reach out to them via email with equally fast response times between a few minutes and less than an hour. One of the most interesting things about Paxful’s customer support team, apart from the fast response time, is their familiarity with most common customer challenges within the platform. This can be evidenced by the fact that most of the queries we raised here were promptly handled without the need for further escalation.
How Does Paxful Compare To Other Trading Platforms?
☑️Paxful Vs other platforms
Paxful, when compared to all other trading platforms, stands out for the fact that it does not charge anything for withdrawals if you are a buyer. This allows you to cut down on what it would cost you to buy Bitcoins. Additionally, Paxful protects your identity with the ability to trade anonymously. This is unlike most other platforms that will charge you multiple fees for the buyer as well as the seller.
☑️Paxful Vs Local Bitcoins
Compared to Local Bitcoins, which is its biggest competitor, Paxful wins on several levels. The first one is that Paxful does not have a fixed amount that it charges sellers for making withdrawals. On Local Bitcoins, this value is set at 0.0005 BTC. If you happen to be operating small trades, this can be costly, especially with the Bitcoin exchange rates in play. On Paxful, the amount is set at 1% of the value of the transaction, which is slightly fair whether you are transacting big or small trades. Paxful also has more payment options compared to Local Bitcoins.
What we like and don’t like about Paxful?
What we like about Paxful:
- Available in over 100 countries:
Started in 2014 as EasyBits, this online marketplace changed its name to Paxful in 2015. It is registered in the United States but has since expanded its operation to over 100 countries across the world. Where it also supports all the currencies from these countries.
- Interactive user interface:
Paxful has a relatively simple and highly interactive user interface. We found placing sales posts as well as finding coins listed for sale quite straightforward.
- The elaborate user profile:
Like most other peer-to-peer marketplaces, Paxful maintains a publicly visible user profile. Key features making up the trader profile include min/max trade, the rate per bitcoin and trading costs, and the current rate. But most importantly, this profile also points out the seller’s reputation. This is the trust score awarded by their past clients and pays a key role in helping the buyer determine whether to trust the seller or not.
- Supports anonymous trading:
We also liked Paxful’s relatively straightforward registration. Here, you are not required to go through the different know your customer process during sign up. Interestingly, your trading activity and amounts held in your Paxful wallet ultimately determine the level of verification needed. You, for instance, will need to verify your email and phone number if you wish to transact amounts above $1,500. To transact $10,000 and above you will need to confirm your ID and physical address. Paxful moderators will also conduct due diligence on the use of the coins bought and sold here to ensure that you are not engaged in money laundering or other illegal online activities.
What Paxful need to improve on:
- High fees and commissions:
We feel that while the level of transparency the company adopts in handling fees and commission on the platform is commendable, they need to shield buyers from exploitative sellers.
- More cryptocurrencies on the marketplace:
Today you can only sell Bitcoins digital currency on the platform. The rest of the equally popular cryptocurrencies can only be used to pay for bitcoins bought on the platform.
Bottom line
Paxful is a reputable Bitcoin trading platform. This platform ensures that it delivers excellent customer service through its standby live chat feature and a dedicated FAQ page. The security and privacy of each transaction are made possible by the escrow service. And this makes it appealing to new users as it helps protect them from fraudsters.
Similarly, the fact that top tier clients don’t have minimum bitcoin operating balances makes it appealing to anyone looking to exchange or buy large bitcoin deposits at prices dictated by them and not the market or the trading platform. And all that is needed to get here is proper verification and due diligence from the Paxful support team and you will be well on your way to operating an account without a coin-exchange limit. Further, note that the 1% commission on successful sales is among the lowest and most affordable trading fees imposed by any exchange we have come across.
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- Highly regulated BTC wallet
- #1 cryptocurrency platform
- Accepts Paypal
FAQs
What digital currencies can you trade on Paxful?