Originally published in June 2015, this blog post has recently been updated for 2020.
The adoption of cryptocurrencies all over the world, particularly Bitcoin (BTC), is growing at a remarkable pace. While there are various ways to utilize these digital assets, a lot of crypto enthusiasts still explore the possibilities and opportunities of Bitcoin through trading.
Currently, there are over 330,000 Bitcoin transactions that are confirmed each day, according to the blockchain charts statistics. Behind this massive number of confirmed transactions daily lies thousands of individuals that trade Bitcoin in different parts of the world. While it can be thrilling to try your hand at BTC trading, there are still people out there who are new and unfamiliar with how it works.
Bitcoin buyers and sellers must-knows
First things first, make sure that you have an account. You can create an account at Paxful if you don’t have one yet. No need to worry about getting yourself a Bitcoin wallet, you get one for free as soon as you sign up on Paxful.
Once you have your Bitcoin wallet, calculate the price of Bitcoin in USD or any currency of your choice to give you an idea of what the ballpark price is. Next, you can proceed to scout offers and engage in some trades. Purchasing Bitcoin, however, might sound overwhelming at first, most notably for those that are new in the business.
To help get you started, here are a few tricks and tips:
- Minimum trade amount. It’s important to note that currently, the minimum amount for buying BTC on Paxful is 10 USD and 0.001 BTC for selling.
- Trading off escrow is not allowed. Sharing contact information or communicating outside the Paxful trade chat is prohibited. On Paxful, we use escrow to keep your Bitcoin safe, so it must be used at all times. Otherwise, your account will be banned.
- Having multiple accounts is not allowed. This is deemed as a system abuse and an unreasonable advantage in the natural market flow.
- Keep a civil tone. Unruly, foul, or abusive language tone is not allowed. Maintaining a polite tone with your trade partners is expected at all times.
- Brokering gift card codes is strictly prohibited. Providing bad gift card codes to trade partners is not allowed as it is also against Paxful’s Terms of Service.
- Stick to the trade rules. No other negotiations or alteration of offer details must happen between the buyer and the vendor. The buyer must pay the exact price of the BTC agreed upon in the trade. In case the vendor has to make adjustments, a trade must be reopened to correct the amount.
Tips for buying Bitcoin
We have also created a list of the most important things you should take note of, specifically when purchasing Bitcoin, so you can do it quickly, safely, and without difficulty.
- Know your vendor. When considering a trade partner, always look for the following:
- Reputation – Go to a vendor’s profile and look for the numbers beside their display photo. The figures displayed in green with a + before it indicates the vendor’s positive feedback from previous trades; the one in grey means neutral feedback, and the one in red with a – before it shows the negative feedback. The ideal vendor is someone with a +200 feedback score or higher.
- Verifications – Aside from the reputation scores, it is also important to confirm if the vendor’s account is verified. You can see this on their profile, right below their display photo. An item that is verified has a green icon. Otherwise, it’ll appear in red. Ideally, you’d want the vendor to be ID-verified.
- Availability – Always check if the vendor you’re eyeing to trade with is online before proceeding. This will help you avoid sending your funds to someone who won’t respond quickly or face the risk of the trade expiring.
- Other details – Next to the vendor’s verification status is the info column. There, you can check the languages they speak, the trade history, and the date they joined Paxful. Checking the number of people who trusted and blocked the vendor will also give you an idea of whether or not to consider their offer.
- Carefully analyze the details of the offer. It is crucial for all buyers to thoroughly read all that is stated in a vendor’s offer.
- Offer terms – Always read all the terms before accepting and buying Bitcoin. This is where the vendor states their requirements and expectations for the offer. Only accept the terms if you can provide all the stated requirements. Be sure to have them all prepared before starting the trade. Otherwise, look for another offer.
- Price – Converting cash or gift cards into Bitcoin comes with a vendor’s fee, and the vendor charges this. This will vary from vendor to vendor, so always scout for the best offers.
- Do not use third parties for payment. You must be the original owner of the payment you submitted to the vendor. These payment documents include gift cards, credit cards, bank account payments, online payment platform accounts, and other personal means. Paxful doesn’t allow the use of middlemen when paying. More often than not, it’s a scam.
- Never ask the seller to release the Bitcoin first. Paxful uses an escrow system to keep your Bitcoin safe. These funds are kept until your payment is complete. Asking the vendor to release Bitcoin can lead to an instant ban as it indicates a scam.
- You have the option to cancel the trade. This is deemed proper etiquette in Paxful. If you are not interested in the trade anymore and have not yet paid the vendor, you can always choose to cancel the trade. This will free up the vendor’s escrow and enable them to continue trading with others.
- Never leave a trade hanging. Since you always have the option of canceling the trade, there’s no reason to leave a trade hanging. Doing this may result in you being reported through a filed dispute or receiving negative feedback.
- Remember to mark the trade as paid. As soon as you send your payment to the vendor, make sure to click on the I have paid button. This will nullify the trade expiration set by the vendor and will protect you from being scammed.
Tips for selling Bitcoin
Now that we’ve learned the essential tips about purchasing Bitcoin, let’s move on to the selling aspect.
- Be accountable. Some possible risks and liabilities come with trading Bitcoin, and as the vendor, you are expected to be responsible and accountable for all the odds that may arise in the trade. It is also essential to know how to protect yourself from these possibilities.
- Provide brief and concise offer terms. Never leave this blank as this will indicate your requirements for your potential buyers. They will review this before the trade begins, so make sure to keep it simple, detailed, and easy to understand.
- Clear and specific trade instructions – Indicate every bit of information you require from the buyer. These should be enumerated in bullets and be as straightforward as possible.
- Provide examples if needed – If you require them to provide photos of ID, cash receipts, physical gift cards, or a selfie with a specific document, then provide a sample photo for their reference.
- Respond to your buyers. Almost 50% of trades are canceled because of unresponsive vendors. If you’ll be away from your computer for a long time, it is better to take down all your offers until you’re available again.
- Do not use third parties for payment. As a seller, accepting and processing payments is your responsibility. Having it handled and controlled by others is not allowed. Paxful does not consider the use of middlemen in paying BTC trades and can consider such as a fraud.