Acquiring Bitcoin: Do’s and Don’t’s of Peer-to-Peer Trading
This writer has been trading Bitcoin, mostly on the selling side, for over three years. Almost 100% of the trades conducted were done on a peer-to-peer basis, using the LocalBitcoins.com exchange. The following article is intended to pass on wisdom.
Don’t Leave Your Trades Open When You Cannot Attend to Them
Several times, this writer has opened trades with people only to have them expire as a result of no response from the buyer. In general, such people were never attempted to trade with again. It’s like walking into a store and no one is there. If you can’t be there to conduct the trade or discuss the terms of an in-person trade, it’s a click of a button to hide your trade while offline.
Do Answer Questions
Some buyers can scare off sellers by not answering questions the sellers have, or inadequately answering them. Sometimes this is a result of bad English skills (see next point), but often enough it’s more of a tactic to make the seller to succumb to whatever trade terms they didn’t quite understand. Answering any and all questions before actually sending payment is a better way of doing business, and will get you higher and/or trusted feedback ratings from sellers.
Do Use Good English
If you are not a native English speaker, it can be worth it to either use a good translation program in order to understand what is being said to you or pay someone a little money to help you communicate more clearly. Many of your buyers and sellers will be fluent, native English speakers, and poor English skills can scare someone into thinking they are being scammed. Remember, as a seller, once they release the Bitcoin, it’s very hard to get back, as the buyer can immediately withdraw it. Thus, using good English in both the advertisement itself and any communication related builds trust with English speaking sellers. You, of course, also have the option of only trading with people in your native tongue.
Don’t Try To Cheat
If someone opens a trade and suddenly the price of Bitcoin has dropped, it is inadvisable to cancel the trade for this reason. This is exactly what people are coming to peer-to-peer sites to avoid. Your better bet is to try and negotiate the amount, if you believe the price is going to continue going down. Remember, especially when starting out on peer-to-peer sites, that feedback is everything. Every canceled trade is a potential seller that will never come back and complete a trade, which means you’re on a downward spiral as far as earning good feedback early. “Trades with significant volume” are also especially important in this regard, as feedback related to them is shown first.
Don’t Go In With the Expectation of Quick Riches
Your initial buys will likely be small. People need to confirm for themselves that you are a good, reliable buyer. Prices will change, sometimes drastically, in between trades. The buy and hold strategy has worked well for anyone who has bought in the past couple of years. Even when the price was “high” at $600, people today have doubled their money. Set a goal of Bitcoin to acquire, acquire it, and then wait for prices to be more favorable to you. Panic selling is unlikely to ever help you on your way.
Hopefully, if you follow the above advice, you will have more success at LocalBitcoins. Our next installment will cover other ways to trade for Bitcoin peer-to-peer.