Paxful Exchange Review
Ray Youssef and Artur Schaback founded Paxful in 2015. Since then, it has enjoyed the moniker of being the “Uber of Bitcoin,” at least according to the company’s loyal following.
Based in Delaware, USA, the outfit is possibly most famous for assisting sex workers in accepting Bitcoin payments after MasterCard and Visa clipped services to Backpage. At one stage second only to Craigslist, the classified advertising site was seized by authorities in 2018 due to its lax policies that authorities felt enabled prostitution and even human trafficking.
Somewhat reminiscent of LocalBitcoins, Paxful is a P2P Bitcoin buy-and-sell platform, where global users can trade Bitcoin for fiat currency or vice-versa. For Americans, only New Yorkers are prohibited from using the exchange as it currently lacks the city’s specific BitLicense.
Why Is Paxful Better?
Fast becoming a global and sleek platform that is ironing out minor wrinkles as it progresses, Paxful home pages in various countries like the U.S., India, China, Russia and Nigeria sometimes have localized instructions for users.
Traders can purchase Bitcoin using any debit or credit card, an Amazon Gift Card, funds transfer via Paypal, Western Union money transfer or any one of around 300 protocols that enables the purchase of Bitcoin.
This extensive offer alone makes Paxful a welcome exchange and many get onto the exchange by swapping out gift cards and other payments. Onsite, users can employ a handy onscreen calculator to determine what to expect in exchange in any currency trade.
As a peer-to-peer exchange, buyers pay sellers through whichever means is mutually acceptable, from their personal account. Buyers are protected by Paxful that verifies a seller’s eligibility to transact, as well as by a two-step authentication process, military-grade security that is externally audited, and escrow.
In establishing a marketplace that connects buyers with sellers, the company skims off trades to generate income. With over 40,000 Bitcoins traded to date and some 55,000 users, Paxful is different to and smaller than other Bitcoin exchanges like bitFlyer, but fast catching up in volume.
Paxful Into The Future
Growth of the exchange is expected to remain buoyant, especially on the back of its smart accommodation of so many payment methods alongside its P2P approach. For users who don’t wish to leave their homes, most traditional as well as crypto wallets can be employed to settle trades on the platform.
Skrill, Payoneer, PayPal, Serve to Serve transfer, OKPay, PerfectMoney, NetSpend and Paxum are all major online wallets typically employed by buyers and sellers to transact and settle trades on Paxful [paxful.com].
However, it must be noted that for such a dynamic site, “Instant Live Chat” seems anything but, and there have been moans about the time taken to glean a response from Support – even under situations of extreme duress.
Although there is a good hand-holding experience for newbies where a team member will guide new users through various protocols and transactions, general inquiries via live chat tend to drag. Chat room responses usually take a few minutes between responses, and this is an arena that could be better equipped by the company.
The UI of the exchange’s sites is elegant and uncluttered and moves easily between devices. Showing the thought given to UX, an intuitive depiction and distribution of options greets users and a minimalist menu bar helps keep things simple. The user forum and comprehensive FAQs are also valuable and succinct, and most new users are trading as they wish within minutes.
Paxful Partnership Program and Other Benefits
The exchange has introduced The Paxful Partner Program as an easy way for users to earn snippets of Bitcoin while promoting the exchange to friends. It allows users to earn Bitcoin “passively” and can monetize blogs and other sites while also simply fattening wallets over time.
By sharing their partner link on any social network or by offering a “Buy Bitcoin” facility on their site, users score two percent of every affiliate trade that takes place from their marketing. This aspect is clearly a major marketing and growth drive by the company, as users are immediately equipped with already-prepared buttons, banners and customized links.
The exchange also offers a free wallet facility to users alongside an escrow facility to ensure the legitimacy and success of trades. Only once payment has been confirmed by the seller will the Bitcoin be allocated to the buyer, and the company also acts as adjudicator in disputes.
The Paxful exchange is a great place for new users to dip their feet in and also begin building a reputation as a trusted trader in the cryptosphere, where setting up a new account on the company site is easy.
An automatic setup ensues after a new user identifies themselves via their email address in a purchase. Alternatively, users can fill out a form on the homepage that also registers an account. The option also exists to verify oneself via phone SMS protocols as well as enable subsequent SMS messaging. Most site communication is still sent via email, but a high level of prioritized text messaging can be employed, based on personal preferences.
Buying And Selling On Paxful
There is a minimum amount that any trader can offer on Paxful – 0.001 BTC – regardless of their level of verification. Paxful charges a one percent fee on all sales and this is collected automatically and placed in escrow with the needed funds for a transaction. A useful feature that provides additional reassurance is the exchange’s internal reputation system where users can rate their experience of one another after effecting a trade.
Any vendor that reaches 50 successful trades with at least 20 different peers can apply to be awarded “verified vendor” status. Responsiveness and an overall success score of at least 33 percent are also factored into this title. Buyers avail themselves of the vast number of options on payment when purchasing. Practically, while some preferred combinations go unmet, most users can either sell Bitcoin for a currency they seek or buy with a currency they have on hand.
Although there are no fees accrued by a buyer, payments via less conventional routes attract less favorable conversion rates.
Paxful’s Scam Rumors
A unique yet unwelcome attribute of the site forum is the predilection for users to allege scam attempts against one another. Although it presents as mostly sour grapes, this can be off-putting for new users. Reddit and Bitcointalk are two platforms that have seen threads that warn of the potential for being scammed on the exchange.
That said, while it is most likely that cybercriminals will hover about exchanges like Paxful, security so far has been tight and the company also cannot be held responsible for user errors or misjudgment.
Far more alarmingly, some of the threads contain accusations against Paxful, where funds are alleged to have disappeared without explanation. New users may want to interrogate the company on this issue in order to satisfy themselves of the security measures at play or the successful resolution of these disputes.
Final Thoughts on Paxful Exchange
Paxful does protect its users and the company is adamant that users set up the two-step authentication protocol as well as recommending Google Authenticator. SMS and Authy verification comes as a second-level protection of users accounts. Paxful has partnered with BitGo to secure its hot wallet with multi-sig.
As a P2P exchange, Paxful can seem “messier” than other exchanges rolling on a different model, but the facts remain that with cautious and correct participation, it is entirely possible to buy and sell Bitcoin securely.
To date, there have never been any reports of the site being hacked. Unfortunately, however, chief company officers including the founder were recently arrested in Miami for weapons and drugs offenses, a happenstance that any company can do without.
Nonetheless, Paxful remains a good place for the average Bitcoin holder to add to their collection or dispense with their altcoins. Having embraced the cowboy arena of P2P exchanges and having also stayed the course, the exchange is starting to gain traction as the preferred P2P trading place for Bitcoin. New users will want to watch the surcharges some sellers ask for accepting unusual payment methods, but it remains a quick and user-friendly platform for Bitcoin traders.