Purchasing Bitcoins Peer-to-Peer

Buying peer-to-peer (P2P) basically means buying directly from someone who owns bitcoins and is interested in selling them. The advantage of this transaction is that it is private, i.e. it takes place between people and you do not need to give your personal data to any intermediary. The disadvantage, however, is that it may not be safe, since you can easily run into a scammer.

Finding someone near you who is selling bitcoins is not easy. If you do not know anyone who wants to sell you bitcoins, try to get to the local Bitcoin community.

Go to a local crypto meetup and get to know people, or visit hackerspace like Progressbar or Paralelna Polis in Bratislava or Prague.

Become a member of bitcoin and crypto communities groups on facebook, reddit and twitter.

Once in the community, find honorable and experienced members who have a good reputation, and they will give you advice. For example, miners are often willing to sell cryptocurrencies for cash in the community. Avoid trading with people nobody knows and who have been in the community for a short time.

Don’t get fooled by fake bitcoins, they do not have physical coins 🙂

How to proceed with a peer-to-peer transaction

Even if you have chosen a counterpart and are convinced that the person is reliable, be cautious. Especially, if we are talking about bigger sums of money. Below we offer some tips that can help minimize the risk of the transaction:

    • Do the transaction in a public place with a lot of people around, in a café, for example.
    • If the trade is made in cash, check the authenticity of the banknotes with UV light or use a money calculator.
    • Do not give your counterparty the chance to escape without paying their end of the deal.
    • Never lose the sight of the money, some scammers are skilled “magicians” and can switch real notes for fake ones without you noticing.
    • For large cash transfers, do not carry money around the city, you can make a bank transaction or use the safe deposit service instead.
    • You sign a simple purchase agreement with the counterpart (who, what, when, how, and for how much).
    • Be careful not to exceed the legal cash limit for one transaction (it can vary from country to country)
    • Ideally, divide the transaction into more parts, so the cash and bitcoins are sent in multiple tranches against each other.
    • If you sell bitcoins, first send a tiny test transaction to the BTC address of the counterparty and wait for the counterparty to acknowledge receipt.
    • Use money counter machine that can detect counterfeit notes.
  • For really big transactions, we recommend using the services of a notary or lawyer, ideally with escrow.
  • If there is anything weird about the transaction, if for example your counterparty is changing terms last minute or putting pressure on you, back off from the deal.

If such trades are too risky for you, but you still want to keep your bitcoins under control, decentralized exchanges that connect individual traders will be the right option for you.