The third method of exercising online trading of Bitcoins is by making use of ‘peer-to-peer trading places and venues.’ These are basically websites that bring together groups of traders with similar and opposite needs. One group comprises of those individuals who are interested in using Bitcoins for buying goods from websites that don’t accept any digital currency directly. The second group consists of people who want to purchase Bitcoins using a debit or credit card. Trading marketplaces give these people a platform where they can sell Bitcoins offer discounted goods to each other, respectively.
Such marketplaces are basically working as intermediaries providing users with a proper platform to execute the trade, escrow for carrying out the transactions and Bitcoin wallets.
Look at an example to understand how this method works. Amy posts her Amazon wish list on a peer-to-peer trading marketplace and states that she would prefer discounts up to 25 percent. Ben owns a debit/ credit card and is interested in purchasing Bitcoins that match the exact value of Amy’s purchases. He agrees to that trade via the marketplace and purchases the respective goods Amy is interested in and requests Amazon that those goods be delivered on the address given by Amy. As soon as the order is delivered, Amy notifies that marketplace and Ben’s Bitcoins get released from the escrow. They are then transferred to Ben’s wallet minus the agreed discount by Amy as well as a fee charged by the marketplace.
There are certain concerns pertinent to withdrawing funds using online methods. You can move your money around using the international method of wire transfers. The majority of the Bitcoin markets working online support this procedure.
You can also make use of the SEPA system which stands for Single European Payments Area. It was created to execute transfers internationally between the member states and countries of the EU (European Union). Exchanges such as BTC-e and Kraken recognize this method. However, transfers tend to take quite a long time that can extend up to four to five days. They can also incur huge charges that make the trading extremely costly. HSBC charges around 4 on every SEPA payment that is executed using online banking. Barclays charges around 15 on every SEPA payment.
If you want to open a bank account solely for receiving funds while practicing Bitcoin trading, a large number of banks would reject your application. This makes it quite difficult for Bitcoin traders to trade at times. You can take the help of third-party payment workstations for receiving and withdrawing funds, but this method isn’t as efficient as the ones discussed earlier on.
Direct selling or selling Bitcoins in person to a buyer is another way you can sell and buy Bitcoins. This is quite an easy method of passing on the digital currency you own. You need to scan the QR code using the other person’s mobile phone for accepting the cash-in-hand. If there are family members, friends or colleagues who are interested in purchasing Bitcoins then you can easily practice this method. Set the concerned buyers with any Bitcoin wallet, transfer Bitcoins to their account and collect the cash amount.
However, you need to take care of a few things when practicing direct Bitcoin trading.
Settle on a Suitable Rate: You need to decide a certain rate that would work well for you. Most of the sellers take a price using well known Bitcoin exchanges such as Bitcoin Price Index or CoinDesk. Some sellers may apply a certain percentage on these rates for covering costs or as anonymity premium. You can take the assistance of mobile application for calculating the prices. Popular and workable apps include BTCreport and Zeroblock. It is important that you are aware of the local fluctuations occurring in the price. Price tends to vary from one country to another, mainly due to problems in acquiring Bitcoins using the national currency of that country. Various Bitcoin meet-ups take place across the globe where people interested in trading cyrptocurrencies and Bitcoins meet with concerned people and execute different trades.
Safety Issues: You need to be careful when carrying enormous amounts of money with you to meet a prospective buyer in any public place. It is best to tag a friend along to enhance the security of your cash and to decrease your likelihood of experiencing any unfortunate incident.
LocalBitcoins is a website where you can broadcast your identity as a seller of Bitcoin to a large audience. This is another method to exercise Bitcoin trading. The website allows all the users to rate one another so that people can assess the honestly, reliability and trustworthiness of different trade partners to choose a dependable one. Once you are successful in establishing a reliable reputation on the site, you can sell Bitcoins with a certain premium. It is a convenient mode of practicing Bitcoin trading as you aren’t demanded to prove your identity like you had to do on the other websites discussed above. If you plan on setting a direct meeting with a buyer you identified on LocalBitcoins, you need to observe safety precautionary measures so that you aren’t scammed. LocalBitcoins does support and recognize escrow transactions, but these are limited to be used for the online transactions and not the direct dealings. Hence, you must not comply with any requests from a person who asks you for a direct escrow transaction.