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Frequently Asked Questions
Please read the guides -- they will answer most of your questions
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Common problems & solutions
Creating advertisements and trading Bitcoin
A Bitcoin address looks like a long string of random letters and numbers. Addresses are used when you want to send or receive Bitcoins. Each wallet has at least one receiving and one sending address. When you want to receive Bitcoins to your wallet you need to give the sender your receiving wallet address.
AML and KYC
Anti Money Laundering and Know Your Customer is a group of laws in the United States that require Bitcoin sellers to know who their customers are. Certain sellers will ask for your identification to comply with these laws. Other countries around the world may have similar laws and requirements.
Bitcoin network fee
Since the Bitcoin miners work to confirm your transactions, they won’t do this for free. Rather you pay a tiny amount of Bitcoin to them to help them continue to confirm. This is why each time you move Bitcoin, it costs a tiny bit.
The Blockchain is the technology behind Bitcoins. It’s what makes it work. Bitcoin transactions are sent to the blockchain so that miners can put them into the blocks that they mine. Once a block containing your transaction is mined it has been added to the blockchain and your transaction receives one confirmation.
Not to be confused with the blockchain, blockchain.info is one of many websites that work as blockchain explorers. These websites allow you to ‘see’ the blockchain and what’s going on in it. In practical terms this lets you view your transactions and see if they are confirmed or not. You can also check to see how many unconfirmed transactions there are, the more the longer it will take for your transaction to become confirmed.
A Bitcoin block is one “link” in the blockchain. One block contains a group of Bitcoin transactions that have been confirmed. When Bitcoin miners ‘mine’ these blocks they calculate through computer algorithms which when put in the blockchain, confirms transactions. In turn miners receive transaction fees and newly created Bitcoins for confirming transactions.
BTC is the acronym for Bitcoin. Coin, coins et. al. are also slang terms for Bitcoin.
Two Bitcoin exchanges based in the U.S. that require you to verify your identity before being allowed to trade, along with other limitations.
Cold storage/Cold wallet
This refers to a way of storing Bitcoins in a safe and secure way, offline. This is also how the vast majority of Bitcoins LocalBitcoins hold on to are stored.
For a Bitcoin transaction to be completed it needs to be confirmed. Good habits are to wait for at least 3-6 confirmations before you can consider a transaction good. A confirmation happens when a transaction has been added to a block that Bitcoin miners successfully mine.
An exchange is a platform/service where users can change one type of currency for another.
Fiat comes from Latin and means “let it be done” or “it shall be”. It’s used as a term to mean all currencies that derive their value from governmental regulation or other central authorities.
The opposite of a cold wallet / cold storage. A hot wallet is located on a computer connected to the internet. At LocalBitcoins the hot wallet is where we store a small amount of Bitcoins at a time. It’s from here where your transactions are sent. We only keep a very small amount of Bitcoin here to protect ourselves from hackers.
LBC is where you are, it’s the acronym for LocalBitcoins :)
This is what Bitcoin Miners do in order to confirm transactions and add them to the blockchain. When a Bitcoin miner mines, he uses computers to do difficult calculations which answers are easily proven to be correct. This way, when a miner completes a calculation anyone can easily see that the miner has actually done work. This work can then be used to create a Bitcoin block. What miners get in return from mining is new Bitcoins and transaction fees.
Multisignature, often heard in combination with wallet. A multisignature wallet is one that has several cryptographic keys concerned with it. This way if you have two of three keys, say, you can move money out of it. But with only one you cannot do anything.
Peer-to-Peer. It’s a form of network structure. Rather than having everything go via a centralized node, in a peer-to-peer structure everything goes from user to user. There’s no centralized part to rely on.
A satoshi is the smallest amount of Bitcoin that can be sent, or 0.00000001 BTC.
The pseudonym of the person who invented Bitcoin. No one knows who he is, but he does own quite a nice amount of BTC.
Single Euro Payment Area, SEPA transfers are a special kind of bank transfers within the EU.
A Bitcoin transaction, the actual act of moving Bitcoin from one wallet to another.
Transaction Id. This is a long string of numbers and letters that is the ID of a single transaction. It’s handy to know as you can paste this into a blockchain explorer and see what’s up with your transaction. It’s mainly used to see how many confirmations a transaction has.
The place where you store your Bitcoins. This can be quite confusing to new users, but a wallet is essentially just a Bitcoin address. A Bitcoin wallet can exist on a service such as LocalBitcoins, in an app on your phone or computer, or even on a piece of paper! As it’s just a series of numbers and letters it does not matter where it’s stored. It’s completely OK to use your LocalBitcoins account as your wallet when you’re still new. But when you start to accumulate more and more Bitcoin you way want to think of different ways to store them.
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