In the world of traditional money, millions of people have been victims of scams by strangers whom they have trusted for a variety of factors. In the world of cryptocurrencies, this is no different. Thousands of people fall victim to scammers who pose as trustworthy people in order to take your money and disappear.
How can this be avoided? Here we explain how the escrow system works for bitcoin and other cryptocurrencies on a P2P platform such as LocalCoinSwap.
What is a cryptocurrency escrow system?
The escrow system is the key mechanism typical of a P2P cryptocurrency exchange that helps you carry out transactions with strangers without needing to trust them. The P2P platform protects you and makes it possible for you to buy and sell bitcoin and other cryptocurrencies safely.
Importance of using an escrow system.
Buying bitcoin and other cryptocurrencies from people you do not know can be very dangerous since, as in any transaction, someone will have to take the first step. Who sends the bitcoin or money to the other person first? If you are buying bitcoin from a stranger, they will surely ask you to deposit the money first so that after receipt they send you the amount of bitcoin or cryptocurrency, but why would you trust him or her?
What guarantees that once you send the money, the bitcoin or cryptocurrency “seller” or “buyer” will not disappear? Surely this "seller" will tell you that he has been doing this for many years, that he or she is trustworthy, that they would not tarnish their reputation for earning a few dollars. And in most cases of scams, they try to rush you and get annoyed if you delay in making or ask for additional proof of legitimacy.
If this sounds familiar to you, please think twice before sending money to a stranger or company that doesn't even exist. This is like playing Russian roulette! You are risking that the bitcoin or cryptocurrency "seller" does not send you anything and disappears. This type of scam is very common when you try to trade with people you met on social media channels such as Facebook, Telegram, WhatsApp, and other social networks. However, it also can occur when meeting someone on a P2P platform but then trading outside of the escrow system.
How does a cryptocurrency escrow system work?
Trading on the LocalCoinSwap platform works on the basis of an escrow service. When you register on the platform, you gain access to a large number of offers for both the purchase and sale of bitcoin and other cryptocurrencies such as ethereum, Dai, Tether, Dash, USDCoin and more.
After a trade request is accepted, the seller then locks the cryptocurrency being sold into escrow. This means that the buyer of bitcoin no longer has to trust a stranger.
Once the seller confirms to LocalCoinSwap that the money was received, LocalCoinSwap releases the bitcoin that it had in escrow to the buyer and with this process, the escrow service ends.
LocalCoinSwap escrow service helps you buy and sell bitcoin and other cryptocurrencies in an easy, fast, and secure way.
While the cryptocurrency is held in escrow, it is not possible for the seller to withdraw it so you can be sure that if you send the payment, you will receive the crypto!
Wrapped up
As it has been explained, buying and selling bitcoin and other cryptocurrencies from strangers can result in total loss of your money or your cryptocurrency. Thanks to P2P platforms such as LocalCoinSwap you can buy and sell cryptocurrencies with strangers safely.
LocalCoinSwap connects people who want to buy and sell bitcoin, Ethereum, and other cryptocurrencies in one place and additionally gives them the best support on the market thanks to its escrow system and fast customer service.
We hope this article is helpful. We want to make your experience with buying and selling bitcoin and cryptocurrency the best. If you have questions or would like to learn more about bitcoin and other cryptocurrencies, join our Telegram community https://t.me/localcoinswap and follow us on twitter: https://twitter.com/LocalCoinSwap_
Until next time,
Happy trading!