Minimize the risk of trading on Paxful by learning how to filter the profiles.
In Part I the basics of the wallet, loading it with bitcoin, and monitoring transactions was covered.
Now that the account was topped up with bitcoin and reached the “Sell Bitcoin” page, one can start choosing the currency and method of payment that best matches one's criteria. In some cases such as the Amazon gift cards, one may notice that prices offered for bitcoin can reach up to 2 times the current price of Bitcoin. There will be things to note to keep one's Paxful experience safe and secure. In some cases, offers may be too good to be true and if that’s the case, it’s important to take some time to understand the risks that are involved.
Get familarized with the search bar:
The search bar allows one to select:
- The amount one wants to sell
- The desired currency
- The method of payment one prefers
- Give me the best (brings one the best offers based on when the buyer was last online and their rating)
In this example, $20 worth of bitcoin will be sold, selecting USD as the currency with the Amazon Gift Card as a way to receive the money. There are over 300 payment methods on Paxful with each having their own benefits and risks attached, depending on one's personal choice.
Selecting an offer:
This is one of the most important parts of the entire process. As can be seen, there are several things which are highlighted here:
- Last seen online: This shows one the availability of the user. This is important because it shows if they are ready to make a trade or not.
- Positive feedback Shows the number of positive feedback that person has. One can use this to evaluate the risk when making a trade. Note: a higher number does not automatically mean that they are to be trusted. Some people can do insider trading with themselves on different accounts to increase the number. Please check their profile, their trade volume, and a number of ways they have verified themselves.
- Min-Max amount: This is the amount bracket the person is willing to purchase. Perhaps the person has a minimum or maximum limit that is below or beyond what one has in mind. It is also recommended to do the trades in small amounts until one can trust the person.
- Rate per bitcoin: This rate can change depending on the person. One can usually assume that if it is too good to be true, it usually is.
For the sake of this tutorial, Paxful will give an idea of how to make a trade:
So in this instance, Paxful has selected a person who is giving us $1.9 for every $1 which is traded with them in the form of an Amazon Gift Card. It seems like a pretty good way to save on purchases!
Note: Paxful recommends in such cases to ask for a receipt and that the person shows the proof of payment for the gift card – ideally the gift card would have been paid for by cash.
User Profiles (Poor/Unsafe):
It is always a good idea to check the user profile of the person one is making a trade with. Highlighted in this example:
- Verification: This indicates whether the person has gone through all the verifications possible on the site. It is good to make sure they have both options verified!
- Trades: This number indicates the number of trades a person has completed on the website. Ideally, one wants a person that has completed more than 20 trades and has at least 10 trade partners. It would mean that a person is experienced enough on our platform and can guide one through the process.
- BTC Volume: The volume can be used as an indicator to analyze the integrity of the trades the person has committed to.
- Trusted by: This shows how many people have trusted this person. Keep in mind that anyone can trust another user without even having performed a trade with them.
- Blocked by: This shows how many people have blocked the person, indicating not to trade with the person. Sometimes, these might just be trolls or vendors blocking each other. It’s important to look into the profile and feedback further before performing any sort of trades. Keep in mind anyone can block another user without even having performed a trade with them.
- Joined: This refers to the length of time the user has been registered on Paxful. Ideally, one wants a member that has been a member for at least a month. Being a new member does not have to mean something negative, but if one is doing larger trades, Paxful recommends someone that has been around for a longer period. A longer period may not mean a higher trust, but it is a good way to know that at the least the person has been around and not performed any fraud during that time. It wouldn’t make sense for users to stick around that long just to commit fraud.
Overall – For this specific case, this profile would probably be unsafe for large trades based on a few reasons:
- The user is a new member with only a few days passed since registration. For larger trades, one wants someone who has gotten to know the in’s and out’s of how to use Paxful.
- The user has only performed 3 trades with very low volumes.
- The user’s phone number has not been verified. This isn’t something that’s necessarily negative, but having one's phone number verified shows the level of commitment that the user has to the platform.
User Profiles (Good/Safe):
In the previous example, an example was shown of a profile that Paxful deemed unsafe. For this example, one can see what a safe profile looks like.
Verifications: In this example, the person has verified both of their contact details. This is a great starting point.
Trades: In this case, they’ve done so with over 240 trades: a much greater amount than the previous example. This shows that this user has a great deal of experience on Paxful.
BTC Volume: In this example, it can be seen that the user has traded a greater amount of bitcoin, showcasing that he can be trusted with our money.
Trusted by: Shows how many people have trusted this person. In this case, 24 is a good number, though again keep in mind anyone can trust another user without even having performed a trade with them.
Joined: This is an important aspect as users who have joined a long time ago can help guide us through the process and take away our worries. If they were to be unsafe, they would have been banned or reported already. There is the possibility to access a longer history of comments, feedback and reputation points when making a decision.
Overall – This profile would be rated as safe and a worthy vendor willing to purchase for the following reasons:
- Has performed over 20 trades
- Has been a member for longer than 3 months
- Phone number and email have been verified
- Comments left by users seem thorough, not just a simple one-word review
User Reputation (Good/Safe):
This is a good example of a good or safe user because he or she has been registered for more than 7 months, done 242 trades, and a positive reputation. With the exception of one negative review and 3 neutral reviews, the user has a solid positive reputation of 215. If this were a real case, one would be ready to push through with the trade.
Chat Dialogue (Average):
In this trade, a buyer was approached who was assessed and marked to be a safe member based on their many previous trades and other factors listed above. Once a trade is initiated, one can see a more detailed view on their mobile phone – assuming they have verified it. This allows one to see the provider and whether it is a normal network or purchased via a VOIP/Google phone service.
The partner had set their location to the USA, though after a short look, please note that the mobile number was from China.
Please also note that the coupons were for the German Amazon website. This coupled with the location of the mobile phone, raised our concerns and diverted our attention towards needing to address this with the buyer.
When proceeding to question the situation, it was noted that the buyer did not provide a receipt for the gift card. This all pointed to an unsafe sale, though the user cancelled the transaction.
Usually, the timeframe in which one can follow instructions varies from user to user. Ideally, one would want someone that can do this fairly quickly so that one does not have to wait for them to communicate and finalize the process.