The Story
Hey guys, this will be my first post on Steemit and I'd like to document on what it was like to buy 3k USD worth of Bitcoins through LocalBitcoins.com with cash. I realize that many people aren't comfortable with registering with exchanges like Coinbase for various reasons. For example, most of those exchanges have a KYC (Know Your Customer) protocol/process where businesses wish to identify and verify the identity of their customers. Some people may think it's inconvenient. Another issue with such exchanges is that they often require a bank account or debit card. I know of some young friends who are interested in obtaining Bitcoin, but don't have a convenient method of getting them.
Thus, if you're someone who has some of those issues and doesn't have a BTC ATM lying around them, you can hop on LocalBitcoins.com and register without verifying your identity. It can be a safe way to obtain bitcoins with cash. Also, the transaction will nearly be instant. (Note that the seller sends the BTC onto the website wallet and the BTCs will be sent internally within the system to your LocalBitcoins wallet. Thus, there is no need to wait for confirmation times when you hand the cash over.)
My Experience
Just recently (June 4th, 2017) I wanted to buy some BTC locally. (Note: I do have a Coinbase account and I frequently buy bitcoins on there, but I wanted to test out LocalBitcoins.com). Let's just say I had 3k USD lying around (from working part-time jobs). I wanted to get my BTC quickly and I did not want to wait 5 business days for Coinbase to send me my coins.
I live near Providence, RI, so I looked up In-Person Cash options in the city.
Note that these prices do not accurately reflect the what I bought BTC at. I believe that the rates were ~2750 USD. BTC's price suddenly rose today (June 5th).
At first I messaged USMC1991, but he had stated that he was out of BTC for some reason. Next, I decided to go with snowgreg. For LocalBitcoins, you want to buy from sellers who have a lot of transactions under their belt. snowgreg has done over 1000+ transactions and has a 100% positive rating.
In addition to messaging him through text, I also messaged him through the LocalBitcoins.com chat. If you're really wary about keeping all your information including phone number private, then this will suit you.
snowgreg and I decided to meet in a Starbucks on Thayer St. I got there early and he got there on time. Here are some of our text messages.
I was sitting down with my laptop on a Starbucks chair. He came and shook my hand and told me "I'm Greg, nice to meet you", and I said "I'm Turtle, and the pleasure is mine." Okay I actually just said my real name and "nice to meet you too".
Anyways, we just sat in the Starbucks cafe and I surreptitiously handed him my 3k USD. He told me there was nothing to worry about and I loosened up. I was paying in hundreds and he had a counterfeit money detector pen which he was using to mark the hundreds. I asked him about his life a little while he was doing that and he told me he got into Bitcoin to possibly protect his company from ransomware or something of that sort. Eventually he got on LocalBitcoins and it became his hobby to sell BTC to strangers.
Anyways, he got his 3k and he released the BTC to my LocalBitcoins wallet. The transaction was instant and everyone was happy. Note that the Seller has to fund the wallet on the LocalBitcoins wallet before the meetup. I receive a special code that only LocalBitcoins shows him after he officially sends the BTC After the cash is exchanged, he officially releases the money and reveals the matching code. Everything is instant and satisfying. I still text the guy to this day.
Here's some of our chat log on LocalBitcoins.
As you can tell from the image above, the BTC was first funded with his wallet and then released. LocalBitcoins has a case where you can safely get your BTC in case the Seller runs off with your money.
I payed the current price of BTC * 1.1. For example if the price of BTC on Coinbase/GDAX was 2500, then I payed the guy 2500 * 1.1 or 2750 USD per BTC. I don't consider that a bad deal since the price is now currently $2890 on GDAX as I'm writing this post. The amount of BTC I got was roughly around 3000 USD divided by 2750 USD/BTC or ~1.05 BTC.
I know that a 10% markup is unattractive, but there are some other people who offer a smaller markup rate such as 5% or even less. Other exchanges also have a fee ranging from 1-2.5%. The seller needs some incentive to sell his coins and there is an incentive for the buyer to buy coins on LocalBitcoins.
To clarify, you pay for a certain amount of BTC that you want in USD and whatever the price is at the time, the seller will send you BTC at that rate. There are some sellers with better rates than others and people willing to sell 100-10,000 USD worth of BTC.
Summary
In the end, I got what I wanted and my new friend snowgreg also got what he wanted. LocalBitcoins is definitely one way to obtain BTC if you don't have any other options. Just make sure the sellers have a good reputation on LocalBitcoins. I doubt someone would risk tarnishing their record just to run off with some money. So if you want to avoid going through through an exchange and have some cash lying around, LocalBitcoins is the way to go.
If you have any questions or comments, feel free to post below and I'll be happy to respond to your thoughts.