2020 has seen a resurgence of interest in Bitcoin and cryptocurrencies in general. Whether it’s because many people are expecting a high inflation period once economies all over the world start reactivating and want to safeguard their money, because they’re expecting Bitcoin’s price to reach a new record high or whatever other reason, a lot of people are looking to buy Bitcoin these days.
And, let’s face it. If you’re browsing this site and reading this article, you’re probably one of them.
So, if you’ve been looking for places to buy Bitcoin, you’ve probably heard about Paxful and are wondering if it’s safe, a scam, or a legitimate option for buying Bitcoin. Read along for a Paxful review that will help you decide if it’s for you.
What is Paxful?
Paxful is an online marketplace where users can buy and sell Bitcoin. It’s not exactly a cryptocurrency exchange but rather a peer-to-peer marketplace.
In other words, what Paxful does is help people that want to buy Bitcoin get in touch with people who want to sell them and help them make the transaction.
Paxful was founded in 2014 as a payment processor called easybitz.com. In 2015 they rebranded into Paxful and launched services aimed at improving Bitcoin’s real-world usability, including a peer-to-peer market that would make buying Bitcoin easy. This is currently Paxful’s main activity.
Paxful’s main advantage over other similar sites is the number of payment options available. While most exchanges have three or four payment methods (credit/debit card, wire transfers, bank transfers, and cryptocurrencies), Paxful has over 330 of them.
Who is Paxful for?
Paxful is a Bitcoin marketplace, so it’s designed for people that want to buy Bitcoin. But there are thousands of places where a person can go to do that.
What sets Paxful apart from all other exchanges and peer-to-peer market places is the number of payment options Paxful offers.
As of writing, there are over 330 payment options, including bank transfers, credit cards, cash (in over 160 fiat currencies), PayPal, and gift cards from several stores, including Walmart and Amazon.
So, let’s say a family member gave you a Walmart gift card, but there’s nothing in Walmart that you want to buy. No problem. You can go over to Paxful and use your gift card to buy Bitcoin.
Paxful Review: Overview of Features
- A secure, peer-to-peer marketplace for buying and selling Bitcoin: Paxful itself has security protocols on par with the top cryptocurrency exchanges, and, for extra security, you can enable 2FA for logging in, buying, selling or even all of them. However, the peer-to-peer nature of Paxful means that you have to keep an eye out for potential scammers.
- Mobile app: Available for both Android and iOS devices, it lets you buy and sell Bitcoin and also functions as a Bitcoin wallet.
- Escrow service: During a transaction, Paxful safely holds the Bitcoins involved until both involved parties confirm that all conditions have been met.
- Many payment options: this is the one feature where Paxful is head and shoulders above all other cryptocurrency exchanges and marketplaces. There are over 330 payment options available: Bank transfers, online wallets, and payment processors, cash, gift cards, debit or credit cards, other cryptocurrencies, goods, assets, and many others.
How to use Paxful
This Paxful review wouldn’t be complete without some basic instructions on how to use it. So here are some general guidelines for buying Bitcoin on Paxful.
Step 1: Create an account
- Head on over to Paxful’s website and click on the “Create Account” button on the top right.
- Enter your email, create a secure password and click the “Create Paxful Account” button
- The next step is to confirm your email address. An email will be sent to the address you provide it. Find it and click on the link to confirm. This will give you a basic level of verification.
- After verifying your email, you will be prompted to verify your ID and address to get the full benefits of your Paxful account.
Step 2: Buying your first Bitcoins
- Your main dashboard will show you the top six payment options currently used in your country or region. On the left, you can see the current price of Bitcoin in the currency you select and how much Bitcoin you would get for a specific amount of currency. Here we can see that 100 USD gets you 0.00850436 BTC. Let’s assume you want to use 100 USD in Amazon gift cards.
- Amazon gift cards are right there in the top six options. But, just for fun, click con the “Show all” button.
- In this box, you could use the search bar and type “Amazon.” But let’s see what happens when you click on “Gift cards.” Notice that there are 120 different gift card options available.
- There are a lot of gift card options, including Walmart, iTunes, T-Mobile refills, Barnes & Noble, Calvin Klein, Victoria’s Secret, and many others. Amazon is right at the top, so go ahead and click it.
- You will now be taken back to your main dashboard. But the “Amazon Gift Card” is now the selected payment option. Click on “Search for offers.”
- Now you’ll see a list of sellers that are willing to send you Bitcoin in exchange for your 100 USD Amazon gift card. The main things you have to check here are the number of “thumbs-up” the seller has (a high number makes it far less likely to run into a scammer), whether they are online now or recently (makes transactions faster) if they have any conditions and the price. Look for the best deal for you and click on “Buy.”
- This final screen lets you confirm that you want to start this transaction and gives you instructions on how to complete it using Paxful’s escrow service. Follow all steps, and you will soon have your Bitcoins in your Paxful wallet.
Alternatives to Paxful
Among peer-to-peer marketplaces, Paxful’s main competition is LocalBitcoins. Until recently, the latter had the advantage of offering the possibility of anonymous trading.
However, LocalBitcoins has recently started requiring KYC, so that advantage has disappeared. If you need to buy anonymously, you might consider Coinswitch, but they have far fewer payment options.
Another downside to Paxful is that it’s not a crypto exchange. It’s useful if you want to buy Bitcoin with some other cryptocurrencies (there are 26 of them listed) or sell Bitcoin to one of those tokens.
But you can’t, for example, buy Litecoin with Ripple, even though both of them are listed. If you want to get into crypto trading, you’ll need a proper exchange, like Binance, Kraken, or Coinbase Pro.
Paxful Review: FAQs
Is Paxful legit and safe?
Paxful itself is entirely legit. They are a vast marketplace where over 20.000 transactions are performed every single day. Their escrow feature also helps protect users from scammers.
However, there have been reports of users getting scammed. This doesn’t mean Paxful itself is to blame or not legit. Think of it like eBay. eBay is legit, but there are users there who are not trustworthy.
Is Paxful a Bitcoin wallet?
Yes and no. Paxful is an online marketplace for buying Bitcoin. But they do provide their users with a free wallet address.
Also, the Paxful mobile app is a fully functional Bitcoin wallet that also lets you buy and sell Bitcoin through the Paxful marketplace.
How does Paxful make money?
Maybe you’re asking yourself how Paxful makes money if transactions are all peer-to-peer. The answer is that they charge fees for some operations. There are no fees for people buying Bitcoins.
Still, users selling Bitcoins do pay a fee. The fee for selling Bitcoin will depend on the payment method, from 0.5% for bank transfers all the way to 5% for Google Play and iTunes gift cards.
There are also Paxful withdrawal fees. Sending Bitcoin to an external wallet has a fee that ranges from 0.001 to 0.0005 BTC depending on how much you’re withdrawing.
Do you need ID for Paxful?
Yes. To access all features Paxful offers and be able to meet all conditions for buying or selling Bitcoin, you will need email, ID, and address verification.
There are a lot of ways you can buy Bitcoin these days. You can choose from hundreds of different cryptocurrency exchanges, many peer-to-peer marketplaces, and in some cities across the world, there are even Bitcoin ATMs and over-the-counter desks where you can make your purchase.
Peer-to-peer marketplaces offer simplicity: they help people who want to sell, get in touch with people who want to buy. In many cases, they also provide escrow services to minimize the risk of users getting scammed.
What this Paxful review should have made very clear is that the main advantage Paxful has over all other exchanges and peer-to-peer marketplaces are the number of payment options available to you.
So whether you have extra cash lying around or have a gift card and don’t know what to do with it, Paxful will let you use it to get your hands on some Bitcoin.
So what do you think? Are you tempted to use that Hotels.com gift card you have lying around to get into cryptocurrency? If so, head over to Paxful and get started.
- Ease of Use
- Cryptocurrencies Available
- Easy and quick registration
- Available in most countries and regions
- Reasonable fees
- Many payment options available
- Not anonymous. Some KYC required
- Not a cryptocurrency exchange. Only for buying/selling Bitcoin
- Reports of scamming by some users
Jesus Cedeño is a certified doctor turned cryptocurrency expert, writer, and investor who lives in New York City. Jesús specializes in cryptocurrency product reviews, tutorials & technical analysis. Follow him on LinkedIn to stay up to date on his latest work on blockchain, decentralization and crypto investments.