What Is Paxful? How Does It Work?

Peer-to-peer (P2P) cryptocurrency trading has become commonplace as more retail traders enter the crypto space. Although centralized cryptocurrency exchanges offer platforms for this purpose, there are specific autonomous markets for exchanging assets directly between buyers and sellers.

Paxful is one of the best platforms where P2P cryptocurrency trading is done. Are you looking for a place to buy or sell cryptocurrencies without using an exchange? Paxful may be what you are looking for, so read on to find out more.


What is Paxful?

We cannot talk about P2P crypto trading without mentioning Paxful because it is one of the main marketplaces in the space. It is a decentralized platform, which means there is no central control, like with a centralized exchange. However, it is not the same as a decentralized exchange.

Paxful users mainly trade cryptocurrencies for fiat currencies or vice versa. The trade takes place directly between seller and buyer, without any third party participation. In addition, there is a system that ensures that no one commits fraud in the process, as we will discuss shortly.


A distinctive feature of markets like Paxful is that they support payment methods like Payoneer, which traditional centralized cryptocurrency exchanges don’t support. This makes it a preferred destination for cryptocurrency trading with more flexibility.

Although primarily known as a platform for selling Bitcoin, Paxful also supports trading of Tether USDT and Ethereum. Users from any of the supported countries can exchange any of these resources with users from their own countries or other countries.

How does Paxful work?

Paxful users must register and be verified to use the market. Although Paxful is decentralized and there is no central control, the system ensures that no one cheats, making it a reliable place to trade without knowing who you are trading with.

This is made possible through an escrow account that blocks cryptocurrencies to be sold so that the seller does not receive the fiat payment and does not release the digital asset. If you have a dispute during an operation, you can file a claim and provide evidence, such as proof of payment, to support your case. If the Paxful team verifies that your claim is legitimate, they will release the cryptocurrency to you if you are the buyer or keep the cryptocurrency if you are the seller who has not received the fiat payment for the assets.


Once registered and verified, you can go ahead and place an announcement if you want to sell or provide details on which cryptocurrency you want to buy and how much you want to spend, as well as the fiat currency you will pay with, and the payment method you want to use.

With this information, you can search for available offers and select the seller you want to buy from. If you agree with the terms, you can go ahead and pay them and they will release the resource to you.

The time it takes to complete a transaction depends on the trader, the payment method used and other factors, such as the time taken to confirm the transaction.

Which countries does Paxful support?

Paxful is supported in most countries around the world. Based in the United States, it supports users in the country, of course, and those in many other countries globally.

There are currently only 35 countries and regions where Paxful is not available, including the Solomon Islands, Christmas Island, the Cook Islands, Greenland and others.

Is Paxful Safe?

Since Paxful is a decentralized marketplace, it is only natural for a potential user to be concerned about their security. However, Paxful is safer than you might think.

In fact, the decentralized nature is a safety feature in itself, as no member of the Paxful team can take your funds and run away with them.

Second, Paxful operates an escrow which is used to temporarily hold assets marked for sale so that the seller does not betray the buyer. Finally, all users of the platform must be verified before they can participate in any operation to ensure that only legitimate people can buy or sell.

One precaution to take is to never hold funds on the market wallet for long unless they are intended for trading. As the market is online, hackers can attack it and steal funds if stored in your online wallet. Therefore, as soon as you buy a cryptocurrency, it is advisable to immediately transfer it to your personal wallet, preferably in a cold wallet, as they are more secure than hot wallets.

What are Paxful’s fees?

There are several fees on Paxful: cryptocurrency trading fees, escrow fees, sending and receiving fees, Lightning Network fees, and conversion fees.

Cryptocurrency trading

Payment group Sell Buy
Bank Transfer 0.5% Without costs
Other Bank Transfer 1% Without costs
Credit / debit card 1% Without costs
Digital currency 1% Without costs
Online wallet 1% Without costs
Cash 1% Without costs
Goods and services 1% Without costs
Wrapping paper 5% iTunes and Google Play cards 3% for all other types of gift cards Without costs

The escrow fee is charged for the sale of cryptocurrencies only when the transaction is completed and some kiosk operations may require a fee in addition to the Paxful escrow fee.

Sending and receiving Bitcoins

Type of wallet To send To receive
External wallet $ 0 – $ 9.99 = 0.00008 BTC commission $ 10 – $ 19.99 = 0.00016 BTC commission $ 20+ = 0.0004 BTC commission Without costs
Internal wallet Up to USD 1,000 per month for free (across all cryptocurrencies) Upon reaching USD 1,000, a fee of USD 1 or 1% of the amount sent is applied, whichever is greater Without costs

Sending and receiving Tether (USDT)

Type of wallet To send To receive
External wallet Ethereum or Tron dynamic network fee + Paxful Wallet fee Paxful Wallet fee breakdown: $ 0 – $ 9.99 = 1 USDT commission $ 10 – $ 19.99 = 2 USDT $ 20+ commission = 5 USDT commission Without costs
Internal wallet Up to USD 1,000 per month for free (across all cryptocurrencies) Upon reaching USD 1,000, a fee of USD 1 or 1% of the amount sent is applied, whichever is greater Without costs

Please note that Tron does not charge any fees for the transfer using the TRC-20 USDT, but Paxful fees still apply

Sending and receiving Ethereum (ETH)

Type of wallet To send To receive
External wallet Dynamic Ethereum Network Fee + Paxful Wallet Fee Paxful Wallet Fee Breakdown: $ 0 – $ 9.99 = 0.0005 ETH Fee $ 10 – $ 19.99 = 0.001 ETH Fee $ 20+ = 0.002 ETH Fee Without costs
Internal wallet Up to USD 1,000 per month for free (across all cryptocurrencies) Upon reaching USD 1,000, a fee of USD 1 or 1% of the amount sent is applied, whichever is greater Without costs

Lightning network

Type of wallet To send To receive
External wallet 1% of the amount sent Without costs

Cryptocurrency conversion

Conversion type Fee
All cryptocurrency conversions 0.5%

Pros and cons of Paxful

Like any product or service, Paxful has its advantages and disadvantages. Below are the pros and cons of using Paxful for P2P cryptocurrency trading.

Professionals

  • More resources available
  • Decentralized platform without central control
  • Safe for P2P exchanges
  • There are many payment options available

versus

  • The wallet is not safe for long-term storage of crypto assets
  • The fees are relatively high compared to centralized exchanges

Should you use Paxful?

Paxful offers a platform for P2P commerce with payment options that are not available on centralized platforms. This is its main selling point, so it’s a good option to buy and sell cryptocurrencies if you want to explore other means of payment besides those on centralized exchanges like Binance.

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