A Comprehensive Paxful Review – Is it Safe?
One of the fundamental principles behind the creation of Bitcoin is to facilitate a peer-to-peer (P2P) electronic cash system. This way, users can control their finances without intermediaries and their associated costs. Unfortunately, with the proliferation of exchanges that act as intermediaries between Bitcoin buyers and sellers, it’s almost impossible to have control over your finances. Consequently, traders incur expensive transaction costs in addition to losing their privacy. Now, this is where Paxful comes in.
What is Paxful?
Founded in 2015, Paxful is a peer-to-peer Bitcoin marketplace that brings together buyers and sellers, giving them absolute control of the trading process. Unlike exchanges, the platform acts only as a mediator between traders, and as such, offers high resistance to transactional censorship. Most importantly, users can trade Bitcoin anonymously without revealing their identity to the other party.
Similar to LocalBitcoins – which is also a P2P trading platform- Paxful supports numerous payment systems, including; fiat, PayPal, and credit cards, which most exchanges don’t accept. However, what makes Paxful unique is that it offers a payment processing service for websites that allows merchants across the world to accept Bitcoin payments.
That said, let’s delve deeper into Paxful’s features and services:
Account Registration and Verification
Setting up an account on Paxful is relatively easy and straightforward. All you have to do is visit the platform’s official website, click on Get Started, and then Create Account. You’ll then be prompted to enter your email address, create a unique password, and then click on Create Account to set up a trader’s account. Once you’re done, click on the confirmation link sent to your registered email to activate your account. But before you can begin trading on the platform, you have to verify your account ID and address, especially if you intend to trade amounts larger than $50,000.
Payment Methods and Available Cryptocurrencies
Paxful supports over 300 payment options, including cash deposits, gift cards, bank transfers, and online payment systems like ApplePay, CashApp, and Chipper Cash. Note that while the platform accepts a plethora of payment methods, they all have different exchange rates. Non-refundable payment methods, for example, bank and cash deposits, usually have lower exchange rates than refundable payment methods such as credit cards and e-wallets.
Although Bitcoin is the most traded cryptocurrency on Paxful, it’s possible to trade other popular cryptos such as ETH, Litecoin, Dash, Dogecoin, and Cardano, among others.
Bitcoin buyers on Paxful don’t incur any fees for using the platform. On the other hand, sellers are charged just $1 or 1% of the total amount on each sale, which is higher than the 0.25% charge by traditional exchanges. This fee goes to cover Paxful’s operating costs. Additionally, a seller will also incur the normal Bitcoin network fees that go to the miners to facilitate money transfer through the network.
It’s important to note that sellers may charge a premium depending on your payment method as a buyer. They do this to cover part of the 1% fees charged by the platform; otherwise, they’d be selling at a loss.
Besides sellers’ fees, Paxful also charges withdrawal fees depending on how much you want to withdraw. For BTC withdrawals below $9.99, you’ll be charged 0.00008 BTC. For amounts between $10 and $19.99, you’ll be charged 0.00016 BTC, while for amounts exceeding $20, the withdrawal fee is 0.0004 BTC. The good news is that Paxful withdrawal charges are way more affordable than the average 0.00057 BTC withdrawal fees charged by most exchanges.
You need to verify your account if you plan on trading large amounts of crypto-assets. The verification process is divided into four main levels, each with a trading volume limit.
Every new account is categorized as level 1 and has a trading volume limit of up to $1,500. Also, you can only open two trades simultaneously, each with a maximum trading volume of $500. But first, you have to verify your email address and phone number, which helps increase your account’s security and level of trust.
At this level, you have to verify your ID in addition to the previous verification requirements in level 1. Upon meeting these requirements, your trading limit increases to $10,000.
Level 3 requires address verification to increase your trade limit to $50,000. You’re also provided with additional payment methods such as bank transfers.
This level has no trading volume limit. However, to unlock it, you must first successfully satisfy all the previous levels’ verification requirements. Lastly, you have to go through the enhanced due diligence (EDD) to ascertain your identity.
Paxful boasts robust security standards designed to safeguard users’ funds. The platform’s website is Comodo-secured, meaning the data is encrypted using 256-bit SSL. Further, Paxful encourages users to set up a 2-factor authenticator, particularly using Google Authenticator, Authy, or SMS-based 2FA, to secure their wallets.
The escrow system also the marketplace, protecting both the buyer and the seller. As such, funds are held on escrow and released when both parties confirm all parts of the transaction. To further improve security, all traders are ranked and rated based on their trading history and other traders’ feedback. These ratings are publicly displayed to encourage traders to maintain a good reputation.
Frequently Asked Questions
Is Paxful legit and safe?
Paxful is trusted by millions of traders worldwide and has managed to build an excellent reputation for itself. While there have been a few isolated cases of scam accusations against other users, it’s good to keep in mind that a trader’s integrity shouldn’t be confused with that of the platform. So, be sure to check a trader’s profile to ascertain whether they’re trustworthy. Ideally, it would be best to look for traders with an established account and high positive feedback ratings.
Is Paxful regulated?
Even though Paxful head offices are in New York, the platform isn’t regulated by any authority; neither are users’ funds insured. But still, users have to go through KYC compliance processes to curb money laundering.
Overall, Paxful is a reputable Bitcoin trading platform committed to connecting crypto traders. Its intuitive interface and high-security standards make the platform appealing to both novice and experienced traders.