What is Paxful?
Paxful is a peer-to-peer Bitcoin marketplace and money translator.
It is a platform that allows anybody with an account to buy and sell Bitcoin (BTC) globally.
However, it’s not like a traditional Bitcoin exchange in which you buy from an orderbook.
With Paxful, people buy Bitcoin directly from peers looking to sell, and Paxful acts as a mediator between the buyer and seller.
Launched in 2015 by co-founders, CEO Ray Youssef, and COO, Artur Schaback, Paxful employs over 280 people in its headquarters in New York City, and established offices in Johannesburg, Estonia, Hong Kong, and Manila.
Paxful’s mission is ‘social justice through financial freedom worldwide,’ and its platform offers over 300 financial networks, empowering both merchants and buyers alike.
Paxful claims to have created opportunities for millions of people who are disconnected from the legacy banking system.
The platform has millions of users worldwide, and the marketplace offers more accepted currencies of any other Bitcoin market.
Paxful is open for trading in pretty much every country, and traders on the platform can pay by cash (if they live locally and can meet the seller), by bank transfer, wire transfers, credit and debit cards.
As well as paying with money, you can even buy Bitcoin with gift cards, air miles, or whatever the seller is willing to accept.
As long as you both come to an agreement, you can pay for Bitcoin with whatever they are willing to accept.
Opening a Paxful Account
Opening a Paxful account really easy and takes less than a minute.
Just, go to the website, click on ‘Create Account’, fill the form with your email, choose an account name and password, agree to the terms and conditions and you’re done.
As soon as you sign up, you will automatically have a wallet where you can store your Bitcoin.
To start trading you will be asked to verify your account. For this you will need a phone number, which Paxful will send you a confirmation code.
Once this is done, you’ll be directed to answer three security questions about yourself, such as: ‘What was the name of your first pet?’ This is in case of losing access to your account.
You will then be asked to submit a photo ID, and proof of address. Government ID is usually necessary for this.
You don’t have to verify your account, but it is usually in your favour if you do, because you will be able to purchase more Bitcoin, and you will easily find sellers.
If you don’t want to verify your account, you will be limited to buying $1500 worth of Bitcoin, and also limited to sellers, as most sellers prefer not to sell to non-verified accounts.
Although, you will find sellers willing to accept non-verified accounts, but again the cost for the Bitcoin will likely be higher than if you verify your account.
Paxful has a four step verification process, which staggers the amount of Bitcoin you can trade:
- Level 1: Email address and phone number verification, $1,500 limit
- Level 2: Government-issued ID verification, $10,000 limit
- Level 3: Address verification, $10,000 limit
- Level 4: Further due diligence and manual KYC check, unlimited
The level of verification is obviously your choice, but once you’ve verified your account to the level you feel comfortable with you’re good to go.
How The Paxful Marketplace Works
Buying Bitcoin on Paxful
If you’re looking to buy Bitcoin, click on the ‘Buy Bitcoin’ tab, and it will automatically search for the best deals nearest to you, and in the currency of your location.
If you prefer not to buy in your local currency, simply click the ‘Currency’ tab and choose from the multitude of options.
Once you choose your currency, click ‘Search For Offers’ and it will look for the best deals in your chosen currency.
Once you find a price you’re willing to pay, click the ‘Buy’ tab, and it will take you to the seller’s page.
In the seller’s page it will have a bio of their standards and ways of payment. You must reach the requirements set by the vendor to trade with them.
If everything is ok, you simply fill out the amount of Bitcoin you wish to buy, and click ‘Buy’. The amount of Bitcoin you want to buy will automatically be sent to an escrow where it will be kept until you confirm payment.
You will then be directed to the next page, which you will need to follow a few simple instructions, and complete the method of payment.
Once you agree, a live chat will open with the seller and once you both complete your side of the deal.
Once both parties are happy that payment has been sent, the escrow will deposit your BTC into your Paxful wallet, and Paxful will release the funds you sent to the seller.
If he chose a bank transfer, it will immediately be sent to his bank. If he chose a wire transfer, he will be given the code to go and pick up the funds from the wire transmitting company of choice.
If you want to buy Bitcoin with anything other than money, you follow the same instructions, but instead of putting a currency in, you look for sellers willing to accept your gift card, or air miles.
It’s all pretty much the same process as buying with money, but obviously they will be paid in whatever funds they agree to accept.
You can also ‘Create an Offer’ by clicking the tab at the top, and fill out the form with your offer. If you choose to do so, fill out your terms and then simply wait for a seller willing to accept your offer.
If there are any problems during a trade, Paxful is there to help with its one-on-one live chat customer service. The live chat expert will guide you through any trouble and explain everything in as much detail as you need.
Selling Bitcoin on Paxful
If you’re looking to sell Bitcoin, you click on the ‘Sell Bitcoin’ tab in the header. You will then be directed to the selling page in which you can set your rates and funds that you’re willing to accept.
If you’re wanting a quicker sale, there’s a list of buyers with their terms, who have created an offer.
This list of offers is a bit lower on the page. Simply scroll down and find an offer you’re willing to accept, and follow the instructions.
It’s the same process as buying Bitcoin, but this time you’re obviously the one sending Bitcoin to the escrow.
How Much Does Paxful Charge?
Paxful charges sellers a 1% fee, but doesn’t charge any fees for buyers. The charge for buyers actually comes from sellers who set the rate they’re willing to sell their Bitcoin for.
Sellers do set different rates, so it’s best to search the marketplace for the best deals to suit you.
What Are The Risks of Buying Bitcoin on Paxful?
Any peer-to-peer marketplace creates obvious security issues, and there are stories of people being scammed on Paxful.
That said, Paxful is constantly upping its security system and there are fewer scams today than what there were in the early days.
For its part, Paxful verifies and checks all sellers wanting to use its platform, and buyers are fully protected by the platform’s escrow service.
After you make a payment, Paxful holds your funds and the Bitcoin in escrow and verifies it. And it’s not until both parties are in agreement that both sides of the deal are released.
The marketplace has a voting reputation system, where buyers and sellers build or lose a reputation for their actions.
Upvoting and downvoting people is important not just for you and your peer, but for the whole marketplace.
Whoever you trade with, it’s a good idea to leave feedback, to help weed out the scammers.
People build reputations with up and downvotes, so it’s highly recommended that you trade with peers with a good reputation.
If things do go wrong, Paxful has a reporting and investigation disputing system. If a dispute does arise, Paxful investigates and sorts out the problem in a fairest way for both parties.
Security-wise the Paxful marketplace is solid. The platform has never suffered any major security breaches, user information leaks, or any other attacks, and Paxful’s Bitcoin wallet is regarded to be as safe as an online wallet can be.
That said, it’s never advisable to leave your Bitcoin in an exchange or marketplace wallet, and is highly recommended to keep in a secure hardware wallet.
Why Buy Bitcoin on Paxful
Paxful is a trusted marketplace that makes it easy to interact with Bitcoin buyers or sellers in a secure environment from all corners of the world.
It’s very easy to use, and has a web interface and an app, which can be found on both the App Store and Google Play Store.
You can purchase Bitcoin anonymously if you wish, but with a few minutes of more verification you will be exposed to a global marketplace offering over 300 different ways of buying Bitcoin.
Paxful is a truly global Bitcoin marketplace. It can be used in almost every country, and has sellers willing to accept more currencies and different methods of payment than any other exchange or marketplace
As soon as you sign up you will be connected to the Bitcoin network, and will be part of the most exciting financial system.